Last year was not a great year for False Claims Act (FCA) recoveries by the Department of Justice (DOJ) overall, and in health care particularly: $2.207 billion in total FCA recoveries, the lowest since 2008, and, of that amount, $1.761 billion from health care matters, the lowest since 2009. Still, comprising almost 80% of all FCA recoveries, the health care industry continues to be a perennial focus for the DOJ in both criminal and civil enforcement.
DOJ's FCA statistics have some additional lessons, especially with regard to health care cases. First, along with whistleblower "qui tam" cases," DOJ continues to bring more "direct file" health care cases. Last year, DOJ brought 93 such cases, the 4th best year since 1987, after the FCA was amended in 1986. Whistleblowers filed 371 new health care-related qui tam matters in 2022, the lowest since 2009. In contrast, whistleblower recoveries in health care qui tams were up substantially.
In addition, 2022 was the best year ever for whistleblowers in health care cases where DOJ did not intervene and whistleblower counsel pursued such cases anyway (sometimes referred to as "declined" matters). In these cases, whistleblowers recovered $1.013 billion, compared to $641 million in recoveries where DOJ intervened. Again, that was the best year ever for health care declined cases. And it showed in the payments whistleblowers received for their success, i.e., the "relator's share:" $295 million, also the best year ever. The lesson here is that counsel for whistleblowers continue to work hard to develop good health care fraud cases which they are prepared to pursue even if DOJ declines.
As for the cases themselves, FCA health care recoveries in 2022 involved a wide array of health care providers and types of claims. DOJ highlighted FCA claims relating to several suits for unnecessary services and substandard care in nursing homes, a hospital system, a hospice provider, a large physician practice and a pharmacy. Other major cases included FCA cases against Medicare Advantage providers, a drug pricing FCA suit that sold pharmaceutical ingredients and products to compounding pharmacies, and even a COVID-19-related fraud suit against a nursing home. As has become common, DOJ also won settlements relating to unlawful kickbacks with a laboratory, a large chiropractor practice, a durable medical equipment manufacturer and a physician-owned hospital, among others.
The largest settlement in 2022, for instance, resulted in a resolution with a pharmaceutical company in which it agreed to pay $843.8 million to resolve allegations of offering and paying kickbacks. Another settlement involved a pharmaceutical manufacturer agreeing to pay $260 million to resolve claims of Medicaid fraud and abuse.
These cases are the ones that make big news. But the FCA is something all health care practitioners who take federal money should be aware of — largely because claims are driven by whistleblowers.
Unlike in a criminal case, where prosecutors must prove their case beyond a reasonable doubt, FCA claims only require prosecutors to show a preponderance of the evidence – that something is more likely than not. Additionally, prosecutors do not have to prove that the defendant acted with intent to violate the law. Rather, recklessness is a basis for FCA liability. And recklessness is just one step away from negligence.
For these reasons, we anticipate that prosecution and enforcement of the FCA, by both DOJ and whistleblowers, will continue to grow and continue to significantly impact the health care industry.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
