The group Taxpayers Against Fraud (TAF) reports that the Department of Justice recovered $3.1 billion through the False Claims Act (FCA) during the fiscal year of 2010. Of that amount, 80% was from the healthcare industry. Among the biggest recoveries for 2010 have been $600 million from Allergan, $520 million from AstraZeneca, and $422.5 million from Novartis Pharmaceuticals.[1]As debates over controlling healthcare costs continue to rage, the FCA is showing itself to be a cost-effective method for recovering inappropriate payments, and for maintaining order and control over healthcare liabilities. In addition to its enormous success against fraud perpetrated by pharmaceutical and healthcare companies, the FCA also plays a critical role in enforcing standards for appropriate Medicare reimbursement. Under the FCA, a person who knowingly submits, or causes another person or entity to submit a false claim for government funds, is liable for three times the government's damages in addition to civil penalties ranging from $5,500 to $11,000 per false claim. The FCA's qui tam provisions incentivize and protect whistleblowers possessing evidence of fraudulent activity including the performance of inappropriate or unnecessary medical procedures, billing for brand-name medications when generics were actually used, billing at physician rates for work performed by a nurse or resident intern, and other phantom costs passed to the government that would otherwise go unrecognized.[2] With groups such as the AARP predicting Medicare enrollment to increase by almost 80% in the next twenty years[3], the protections of the FCA will play an important role in maintaining Medicare liabilities. The FCA has also shown itself to be an efficient mechanism for detecting and recovering fraudulent activity. A 2006 report from TAF calculated that the FCA returns $15 of taxpayer money for every $1 invested in healthcare investigations and prosecutions. ________________________________________

[1]Over $3 Billion in Fraud Recoveries Under the False Claims Act in FY 2010, Taxpayers Against Fraud (Oct. 25, 2010) http://www.taf.org/whistle295.htm
[2] http://www.taf.org/whyfca.htm
[3] http://assets.aarp.org/rgcenter/health/fs149_medicare.pdf (from 34 million to 79 million).