Significant Recent Trends in Exclusion Case Settlements

By Catalina Jandorf

Catalina photo

The Office of the Inspector General (OIG) has recently entered into a number of exclusion case settlements tied to skilled nursing facilities and hospitals.  Additionally, there have been several recent investigations targeted towards physician practices.  A rising number of these cases with sizable settlement recoveries highlight an emerging trend to be on the lookout for.


Recent Exclusion Case Settlements

OIG photo 1There appears to be a growing number of skilled nursing facilities and hospitals being implicated in connection with employing excluded individuals.  In November 2016, a New York rehabilitation center entered into a $205,089 settlement agreement with OIG.  It was alleged that the facility employed an individual who was excluded from participating in any Federal health care program. OIG’s investigation revealed that the excluded individual was a licensed practical nurse, who provided items or services to the center’s patients that were billed to Federal health care programs.

Similarly in the same month, another New York rehabilitation center entered into a $110,223 settlement agreement with OIG.  The investigation revealed that one excluded individual was a registered nurse supervisor and another was a licensed practical nurse, both having provided items or services to the facility’s patients that were billed to Federal health care programs.

Also in November 2016, a California hospital agreed to pay $190,087 for allegedly violating the Civil Monetary Penalties Law following a Self-Disclosure Protocol (SDP) settlement.  In July 2016, a North Carolina and a California hospital agreed to pay $475,220 and $207,698 respectively for allegedly violating the Civil Monetary Penalties Law.  In each of these cases, OIG alleged that the hospitals employed an individual that they knew or should have known was excluded from participation in Federal health care programs.

Another trend in exclusion liability involves targeting physician practices and individual physicians.  A recent case implicated a medical group practice and a physician in Texas that agreed to pay $435,481 in Civil Monetary Penalties (CMPs) after they self-disclosed conduct to OIG.  OIG alleged that the practice employed an individual that they knew or should have known was excluded from participation in Federal health care programs.

False Claims Act Liability

In addition to facing exclusion sanctions and CMPs, an individual or entity may also be found to be liable under the False Claims Act (FCA).  Another physician exclusion case settlement from September 2016 involved a Puerto Rican physician who agreed to be banned from participation in all Federal health care programs for a period of five years in connection with the resolution of FCA liability.  OIG alleged that the physician submitted or caused to be submitted false claims under Medicare when he furnished health care services to Medicare beneficiaries in a hospital emergency department while he was excluded from participating in Federal health care programs.

In another recent case, a Pennsylvania chiropractor agreed to be excluded from participating in Federal health care programs for a period of twenty-five years in connection with FCA liability.  OIG alleged that the chiropractor knowingly submitted or caused to be submitted false or fraudulent claims to Medicare for services rendered as a de facto executive and administrator of a chiropractic center even though he was excluded from participating in Federal health care programs.


If this steady trend of skilled nursing facilities and hospitals facing exclusion liability is any indication, the OIG will continue to aggressively enforce screening requirements and impose strict sanctions.  In addition to the being found liable for CMPs, False Claims Act liability may come into play if an excluded individual submits false claims under Medicare.  If found to be in violation of the FCA, the individual or entity will be required to pay a mandatory penalty, which is currently in the range of $5,500 and $11,000 for each false claim submitted, and be liable for treble damages.

With the increase of OIG exclusion case settlements and larger settlement amounts, screening employees, vendors and contractors against the OIG’s List of Excluded Individuals and Entities (LEIE), the GSA’s System for Award Management (SAM), and all 38 state lists every month is critical.  


To eliminate the risk of having to self-disclose a possible exclusion violation or undergo an OIG investigation, contact the Exclusion Experts at 1-800-294-0952 or fill out the form below for a free consultation.


DOJ Announces $4.7B in FCA Recoveries: What Does It Mean?

DOJ Announces $4.7 billion in FCA Recoveries

FCA RecoveriesBy Paul Weidenfeld
December 16, 2016

The “Third Best Year” in False Claims Act History?

The Department of Justice announced earlier this week that FY 2016 was its third best year in “False Claims Act History” with recoveries of more than $4.7 billion in settlements and judgments. Though it as been trumpeted as DOJ’s return to its record setting years, an examination of the numbers reveal that healthcare FCA recoveries have actually been remarkably consistent over the past seven years, and that they say more about the emphasis DOJ places on resolving “big” cases than they do about overall fraud enforcement.

A Dependence on Large Casesdoj

Big settlements make for impressive press releases and are good for overall numbers, and FY 2016 was no exception.   The “Top 5” settlements accounted for over 52% of all federal recoveries at 2.5 billion, and total announced recoveries for these cases was a staggering $3.55 billion! Following the playbook, the “Top 5” healthcare settlements accounted for a whopping 60% of all federal healthcare FCA recoveries at just a  tick over $1.5 billion. The dependency on large settlements is not new. Indeed, according to research that we have conducted, the five largest settlements consistently accounted for over 50% of recoveries in every calendar year fro 201-2014 just as it did in FY 2016.

Healthcare Recoveries Remarkably Stable

Despite the dependence on obtaining a few large settlements each year, DOJ’s $2.6 billion in healthcare FCA recoveries for FY 2016 continued a trend of surprising stability in recoveries attributable to healthcare.  Beginning in FY 2010 with the recovery of $2.5 billion, over the seven year period including this year, recoveries attributed to healthcare enforcement have averaged $2.5 with a consistency that belies the suggestion that enforcement has been “up and down” or inconsistent.  The recoveries over that period of time are as follows: FY 2010 – $2.5B, FY 2011 – $2.4B, FY 2012 – $3.1B, FY 2013 – $2.7B, FY 2014 – $2.4B, FY 2015 – $2.1B, and FY 2016 – $2.6B!

Fluctuations are Directly Tied to Housing and Financial Fraud Settlements

Although the fluctuations in FCA recoveries from year to year are often related to how “good” a year DOJ has had, the reality is that with healthcare relatively stable, the differences in recoveries over the last seven years have been directly tied to the Housing and Financial Fraud Settlements. In 2012, DOJ’s reported “record recoveries” were attributable to the $1.7 billion in recoveries it received as part of the landmark housing settlement; in the new record of $6 billion recovered in 2014, 3.3 billion came from banking and housing recoveries; and 2016’s “third best” year was tied to the $2 billion in housing and banking settlements.

Recovery Numbers Do Not Necessarily Equate to Enforcement Efficiency

If enforcement is the process of ensuring compliance with the applicable laws and regulations, it is reasonable to question whether it is fair to equate larger FCA recoveries with greater or more effective enforcement in general — or more particularly, with last year’s major settlements as four of the top five cases were by repeat defendants.  This was the second time Pfizer paid a large sum for Wyeth’s alleged misconduct ($784.6 million in 2016 and $413.2 in 2013); Novartis paid $410 million in 2016 and $495 million in 2010 in settlements; Tenet’s $513 million settlement in 2016 was preceded by a $900 million settlement in 2006 that was a “record settlement” at the time, and Wells Fargo participated in the landmark $25 billion dollar in 2012 before entering into the 1.2 billion it paid this year. 

Could Effective Enforcement Result in Lesser instead of Greater Recoveries?

At some point, one might expect greater or more effective enforcement to result in less fraud and, therefore, lower recoveries.  After all, even though enforcement efforts recovered almost $9 billion in Housing and Financial Fraud Settlements, aren’t those losses attributable in some measure (perhaps in large measure) to a lack of enforcement in the first place?  One would also expect that it might detect situations before they turned into “top heavy” billion dollar losses that drive enforcement recoveries so high.

Congratulations are Still in Order

I may wonder about the “meaning” of the recovery of $4.76 billion dollars in FY 2106, but I certainly don’t question its value or importance — or the work and efforts that went into obtaining them. It is an accomplishment and congratulations are in order.

Providers should take notice and do all that they can to stay out of harms way!


This article was written by Paul Weidenfeld, Co-Founder of Exclusion Screening, LLC.

A frequent speaker and writer on issues related to the Fraud and Abuse Issues, the False Claims Act and Issues related to Exclusions and Exclusion Screening, feel free to reach out to Paul at or to call him at 202-754-8001.


DOJ Doubles Down on False Claims Act Penalties!

DOJ Doubles False Claims Act Penalties  By Robert W. Liles.  August 3, 2016.  The False Claims Act is the primary civil enforcement tool utilized by the federal government in its fight against fraud generally, and, in particular, Medicare and Medicaid Fraud.[1]  Already an extraordinarily useful statute for government prosecutors both in terms of ease of use and in terms of the penalties and damages that may be recovered, the Department of Justice has further raised the stakes by virtually doubling the civil monetary penalties that may be assessed.  The action, which was effective August 1, 2016, was taken in accordance with the provisions of the Bipartisan Budget Act of 2015, and this article provides an overview of the False Claims Act and discusses the scope of the increases in penalties that are being implemented.

I.  Background of the Federal False Claims Act

Sometimes referred to as “Lincoln’s Law,” the False Claims Act was first passed in 1863 in response to war profiteering. Among its provisions were measures intended to encourage the disclosure of fraud by private persons through the filing of a qui tam suit. The term qui tam is taken from a Latin phrase meaning “he who brings a case on behalf of our lord the King, as well as for himself[2] Under the qui tam (also commonly referred to as “whistleblower”) provisions of the statute, a private person (often referred to as a “relator”) may bring a False Claims Act lawsuit on behalf of, and in the name of, the United States, and possibly share in any recovery made by the government.

II.  How Are False Claims Act Cases Brought Against Health Care Providers?

Cases brought by whistleblowers make up the vast majority of False Claims Act cases filed against health care providers. Between government-initiated cases and qui tam cases brought by whistleblowers, most Compliance Officers have become well acquainted with the statute and its provisions. As set out in a December 2015 DOJ Press Release, during the previous fiscal year, DOJ secured $3.5 billion in civil settlements and judgments in connection with cases involving fraud against the government.[3] Notably, $1.9 billion of these recoveries were health care related. [4] Since early 2009, approximately $17 billion has been recovered under the False Claims Act.[5] This amounts to almost one-half of the total recoveries made under the False Claims Act since the statute was amended in 1986.  For a copy of the Civil Division Fraud Statistics, click here.

III. Provisions of the False Claims Act.

 The False Claims Act [6] imposes civil monetary penalties and exposes any person to civil liability under the circumstances below:

Sec. 3729. False claims: (a) Liability for Certain Acts—any person who:

(1) Knowingly presents, or causes to be presented, to an officer or employee of the United States Government or a member of the Armed Forces of the United States a false or fraudulent claim for payment or approval;

(2) Knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government;

(3) Conspires to defraud the Government by getting a false or fraudulent claim allowed or paid;

(4) Has possession, custody, or control of property or money used, or to be used, by the Government and, intending to defraud the Government or willfully to conceal the property, delivers, or causes to be delivered, less property than the amount for which the person receives a certificate or receipt;

(5) Authorized to make or deliver a document certifying receipt of property used, or to be used, by the Government and, intending to defraud the Government, makes or delivers the receipt without completely knowing that the information on the receipt is true;

(6) Knowingly buys, or receives as a pledge of an obligation or debt, public property from an officer or employee of the Government, or a member of the Armed Forces, who lawfully may not sell or pledge the property; or

(7) Knowingly makes, uses, or causes to be made or used, a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the Government, is liable to the United States Government

IV.  False Claims Act Penalties.

A person found to have violated this statute may be liable for both civil penalties and treble damages. [7] The amount of civil penalties that may be imposed for each false claim depends on when each was made. For claims or statements made after October 23, 1996, but before August 1, 2016, the minimum penalty which may be assessed under 31 U.S.C. 3729 is $5,500 and the maximum penalty is $11,000.

On June 30, 2016, DOJ published an Interim Final Rule in the Federal Register announcing that it intended to increase the minimum per-claim penalty under Section 3730(a)(1) of the FCA. As the Interim Final Rule reflects, claims made on or after August 1, 2016, the minimum penalty which may be assessed under 31 U.S.C. 3729 is $10,781 and the maximum penalty is $21,563. While DOJ has provided a 60-day period for the filing of public comments, as of August 1st, the government had not reconsidered  implementation of these significantly higher penalties.

V.  Conclusion.

From a practical standpoint, the existing applicable penalties have proven more than adequate to potentially force a health care provider into bankruptcy if an acceptable settlement is not reached in a False Claims Act that is on track to be litigated. Nevertheless, the imposition of these higher penalties may very well impact the negotiating position taken by DOJ and its client agencies when a health care provider seeks to resolve a case, rather than litigate the claims.

Now, more than ever, compliance is critical and it is essential that organizations have effective Compliance Plans in place.   Established efforts to comply with the provisions of an effective Compliance Plan can better ensure an organization’s adherence with applicable statutory and regulatory requirements.

Are you taking the necessary precautions to ensure you are not working with an excluded entity? We know it can be difficult to screen every Federal and State exclusion list. Call Exclusion Screening at 1-800-294-0952 or fill out the form below to hear about our cost-effective solution and for a free quote and assessment of your needs.


False Claims Act

Robert W. Liles, Managing Partner of Liles Parker, LLP and Co-Founder of Exclusion Screening is the author of this article.  Contact Robert through this link to the Liles Parker website  or by phone to (202) 298-8750 if you have any questions or require assistance with drafting and implementing a effective Compliance Plan.




[1] Criminal False Claims may be pursued under 18 U.S.C. § 287.

[2] False Claims Act Cases: Government Intervention in Qui Tam (Whistleblower) Suits, U.S. Department of Justice, available at (last accessed May 2016).

[3] Press Release, Department of Justice, Office of Public Affairs, Department Recovers Over $3.5 Billion from False Claims Act Cases in Fiscal Year 2015 (Dec. 3, 2015), available at

[4] See id.

[5] See id.

[6] Notably, approximately 37 states, along with the District of Columbia and some municipalities, also have their own False Claims Acts that are similar to the federal .

[7] For example, if a physician improperly submits a false claim to Medicare for payment in the amount of $100 and is subsequently paid $100, the physician would be liable under the False Claims Act for both damages and penalties. Under the False Claims Act, the government may recover up to three times the amount of damages it suffers, which in this example would be $300, plus penalties of between $5,500 and $11,000 per false claim. Collectively, the physician’s liability would range from $5,800 to $11,300 for a $100 claim.