Medicaid programs, and $185 million in
criminal fines and forfeitures. The second
settlement, for $72.5 million, involved
a cystic fibrosis drug which Novartis
allegedly marketed for off-label use. The
settlement included $43.5 million recovered for federal programs and $29 million
recovered for state Medicaid programs.
Novartis paid another $410 million global
settlement in 2016 involving alleged
kickbacks the company paid to specialty
pharmacies to promote two drugs. The
settlement included $306.9 million for the
federal government, $83.1 million for state
Medicaid programs, and $20 million in
civil forfeitures. 10
It is surprising that Novartis paid multimillion dollar settlements a few years apart
for similar violations of marketing off-label
drug use in addition to alleged kickbacks
to promote Novartis pharmaceuticals. This
demonstrates the importance of a compliance
program that ensures adherence to the law,
because most healthcare organizations could
not sustain that kind of loss to the bottom line
once in a decade, much less twice in six years.
Tenet Healthcare Corporation
In 2016, under allegations that four Tenet
hospitals engaged in paying kickbacks in
return for patient referrals, Tenet Healthcare
Corp. paid $513 million in a global settlement,
including $244.2 million in federal recoveries
under the False Claims Act, $123.8 million in
recoveries to state Medicaid programs, and
$145 million by two Tenet subsidiaries under
the terms of a guilty plea. 11 In an effort to
combat healthcare fraud, the U.S. Department
of Justice (DOJ) is proactive in posting convic-
tions and settlements on the DOJ website. The
transparency of the DOJ can be a challenge for
the compliance professionals of those entities
and also for the public image of the entity. The
bottom line will invariably be impacted due
to decreased patient volume and millions of
dollars in lost revenue, in addition to the civil
In evaluating an effective compliance program,
healthcare compliance professionals should
ensure they review not only federal laws, but
also state laws that govern healthcare entities
and organizations. Review and implementation of state FCA requirements — regardless
of whether they have been deemed by the
federal government — should be included in
any healthcare compliance program, because
the consequences of violations and monetary
penalties can be financially catastrophic to an
entity or organization.
1. Department of Justice: The False Claims Act: A Primer [ 31 U.S.C.
§§ 3729-3733]. Available at http://bit.ly/1Sckpg1.
2. Government Publishing Office: 18 U.S.C. § 287 (False, fictitious or
fraudulent claims). Available at http://bit.ly/2CYQ6uR.
3. U.S. Department of Health & Human Services, Office of Inspector
General: OIG Guidelines for Evaluating State False Claims Acts.
Available at http://bit.ly/2FqbAOW.
4. HHS:OIG: “State False Claims Act Reviews” Available at
8. Ibid, Ref #4
9. U.S. Department of Justice: “Fact Sheet: Significant False Claims
Act Settlements & Judgements Fiscal Years 2009-2016” Available at