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Project on Government Oversight




ADDICTED TO FRAUD?: Health Care Industry Forced to Return Nearly $2 Billion to Taxpayers Under the False Claims Act

April 27, 1998 


WASHINGTON, DC--As POGO releases its third report on False Claims Act (FCA) settlements and recoveries since 1994, the defense and health care industries' attacks on the law have reached unprecedented levels. POGO will join Senator Charles Grassley (R-IA), and other groups to demonstrate the diverse and widespread opposition to HR 3523,the health care and defense industries' well-funded and unscrupulous attack on the FCA.

The conference will occur one day prior to the House Judiciary Subcommittee on Immigration and Claims hearing on HR 3523, which would seriously damage the FCA and, not surprisingly, grant the health care industry the freedom from accountability that it has so doggedly pursued.

POGO's report, released at the conference, analyzes almost $2 billion in FCA actions from corporations and individuals in the health care industry who have either settled lawsuits, settled allegations independent of a lawsuit or charges beingfiled, or have been found liable under the FCA. POGO's report can include only a partial listing of settlements and judgements since many FCA settlements are not made public, and there are many cases still pending resolution. POGO's report serves as the only source of information on FCA cases since there is no official database that compiles information on those FCA cases that are made public.

Danielle Brian, Executive Director of POGO, said, "Let's face it -- these industries have drafted legislation decimating the FCA because it has successfully forced those who defraud the government to pay for their illegal activities." The FCA forces corporations, institutions and individuals to be held accountable when they receive taxpayer money for their goods and services.

POGO's report includes findings that stress the importance of maintaining the integrity of the FCA:

  • The total amount paid to the government in FCA settlements and penalties for health care fraud since January of 1994 in excess of $1.89 billion.
  • Contrary to the industry claim that the law is used to target smaller defendants for minor sums of money, two-thirds of the cases surveyed settled for more than $1 million. Only 6.1% were less than $100,000.
  • The average settlement amount was nearly $17 million.
  • Over one third of the cases involved poor quality care, care not provided or unnecessary services performed.
  • Despite claims that the law focus' on billing "errors," in fact, the majority of the cases involved FCA violations other than false billing or over billing. 

Founded in 1981, the Project On Government Oversight (POGO) is a nonpartisan independent watchdog that champions good government reforms. POGO's investigations into corruption, misconduct, and conflicts of interest achieve a more effective, accountable, open, and ethical federal government.

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