The total for 2011 includes a record $2.8 billion in recoveries under the whistleblower provisions of the False Claims Act, which is the government’s primary civil remedy to redress false claims for federal money or property, such as Medicare benefits, payments on military contracts, and federal subsidies and loans. $2.4 billion of that money came from cases involving fraud against federal health care programs.

According to prosecutors, between October 2007 and April 2011, Morrison transferred funds from Munson’s Regional Healthcare Foundation’s bank account to an account for her former business. She used the money for such necessitates as buying dozens of boxes of trading cards.

Morrison is required to forfeit any funds and goods she acquired from the crime. So far, over $36,000 has already been seized from various bank accounts.

According to the second annual study of data breaches among health care organizations by Ponemon Institute, the average annual cost of such leaks is $6.5 billion.

Over the past year, the number of data breaches has increased by 32%. According to responding organizations, the most common cause of such breaches is simple employee negligence and mistakes.

Adding fuel to the fire: The vast majority of health care organizations (80%) don’t monitor mobile devices that can most easily transmit protected information — whether deliberately or accidentally.

A free copy of Ponemon’s 2011 Benchmark Study on Patient Privacy and Data Security can be found here.

The order instructs the FDA to increase reporting of potential shortages, fast-track the review of applications to start or change production of shortage-related drugs and give information about potential price gouging or collusion to the Justice Department.

So far a record number of drugs — nearly 200 of them — have been declared in an official shortage. Prices have skyrocketed and some hospitals have reported instances of drug scalping and being offered goods that appeared to have been stolen and/or dangerously mishandled by third-party vendors.

For his efforts uncovering a Medicaid fraud that the government couldn’t, the veteran pocketed a $15 million whistle blower payout.

Richard West, a 63-year-old Vietnam vet living in New Jersey knew something was wrong when medical services he needed were being cut back because he had supposedly reached the spending limit. West has muscular dystrophy, is confined to a wheelchair and needs oxygen — but he’s nobody’s fool and knew the numbers didn’t add up.

A little digging into his records showed that Maxim Healthcare had overbilled for hundreds of hours of care he never received, from nurses he’d never met.

West contacted numerous federal agencies who all declined to help him. So he hired his own lawyer and went to court.

When all was said and done, Maxim had agreed to pay the highest financial settlement in history for home healthcare fraud: $121.5 million in reimbursements and penalties, $8.4 million to the Veterans Administration and a fine of $20 million. Under the whistle-blower laws, West gets to keep a cool $15 million of that. He said he plans to use the funds to buy a new van, make some improvements to his home and donate to charities for the disabled. He will however, lose his Medicaid eligibility as his lawyer noted.

What motivated him to keep up the fight? West told a reporter for the New York Post: “The more I uncovered, the more pissed off I got that someone was making money on my disability… From my wheelchair, on a ventilator and oxygen, I have spent the last seven years in this fight. Sometimes the good guy wins.”

Cummings asked five of the so-called “gray market” companies to provide information on their sales of drugs that are in short supply nationwide. Cummings is interested in reports that some companies are selling the drugs at dramatic markups of hundreds of times their normal prices — in at least once case, a drug that normally sells for around $26/dose was priced at $1,200/dose. Cummings is a ranking member of the House Committee on Oversight and Government Reform.

So far, one of the five companies is cooperating with the information request.

Aside from being unfair and potentially illegal, the shortages and the questionable supplies that some hospitals are forced to use have raised questions of patient safety.

Cummings’ office has set up a tip line for information on price gouging.

Larry Bernhard, a podiatrist in Gambrills, Maryland, pleaded guilty to health care fraud and identity theft, according to a joint statement by federal law enforcement agencies.

Bernhard billed Medicare for services he never provided. Between April 2002 and October 2004, he submitted approximately 80 claims for service that supposedly took place at skilled nursing facilities — even though the patients were in hospitals at the time.

At his most daring, Bernhard even charged for podiatric services he supposedly provided to a patient who already had both legs amputated.

At the time the claims were submitted, Bernhard had already been banned from Medicare and other federal programs because of earlier billing infractions.

Bernhard also admitted using patients’ personally identifiable information to submit the fraudulent invoices.

He faces up to 10 years in prison for health care fraud and a mandatory two years in prison for aggravated identity theft to be served consecutively. Bernhard has also agreed to pay restitution of more than $1.1 million.

The cause of the shortage is a trend toward smaller production runs of less profitable generic injectable drugs as well as manufacturing problems such as contamination that have removed large lots of some drugs from the market.

Vital drugs used in chemotherapy, critical care and treatment of several life-threatening illnesses have been in short supply. The shortages have inspired some middle-market suppliers to essentially scalp the meds, by buying back-stock where they can and offering it to hospitals at jacked up prices.

It’s a steep price difference, too: The Associated Press found that one medication for high blood pressure was being sold for $1,200 a dose instead of the usual $25.90 per dose.

Some hospitals are forced to postpone purchases to either save money or because the supplies simply aren’t available to them at any price. But when those drugs aren’t available, patients have to delay surgeries or other treatments — which leads to extra pain as well as avoidable complications, and in some cases, even death. Patients who receive the drugs bought from the so-called gray market suppliers aren’t necessarily safer. Sometimes hospitals end up unwittingly buying medications that have been stolen and may or may not have been handled and stored properly.

Besides the cost to patients’ health, hospitals are absorbing huge losses on these drugs — an estimated $415 million per year — which they won’t be able to do for much longer.

The practice isn’t illegal, but it’s unpopular for obvious reasons — and potentially dangerous since with so-called “gray market” drugs it can be harder for hospitals to avoid counterfeit medications, those that haven’t been handled or stored properly or that have been stolen and resold.

Scalpers get the drugs in a variety of ways including buying backstock from doctor’s offices.

Many hospitals won’t do business with the scalpers — but then end up paying steep mark-ups anyway from more legitimate suppliers.

Some of the gray market medications with the highest mark-ups include key drugs for the treatment of cardiac and oncology patients, critical care uses and some surgical uses.

Federal prosecutors allege the hospitals violated the Stark Law between 2005 to 2010 by using  improper compensation agreements with local doctors.  In addition to the fines, the three companies will also have to cooperate with an ongoing investigation into individuals who may have violated the law.