Nearly 90% of recovered funds in FCA cases came from health care matters in 2019.
To paraphrase Mark Twain, the predictions of the False Claims Act's demise were greatly exaggerated. The United States Department of Justice ("DOJ") recently announced that it recovered more than $3 billion in settlements and judgments from False Claims Act ("FCA") cases in fiscal year 2019. Indeed, in nine of the last 10 years, DOJ has recovered more than $3 billion in FCA matters. These results confirm that, far from meeting its demise, the FCA remains a robust tool at the DOJ's disposal. DOJ's newest data also contained some notable results. First, nearly 90% of the recovered funds—approximately $2.6 billion—derived from health care cases (involving drug and medical device manufacturers, managed care providers, hospitals, pharmacies, hospice organizations, laboratories, and physicians). Second, qui tam actions brought by purported whistleblowers accounted for more than $1.9 billion of the funds recovered from health care cases. According to DOJ statistics, a substantial majority of its FCA enforcement actions continued to be whistleblower suits: 636 FCA qui tam suits were filed last year alone.
There are a number of other important takeaways for health care companies to consider as they review the FCA regulatory and litigation landscape:
- Government intervention remains meaningful. Digging into the data further, more than $1.6 billion of the approximately $1.9 billion dollars recovered in health care FCA cases was attributable to actions in which the government intervened. This reaffirms the importance of government intervention in the overall recovery in FCA matters. The number also reinforces the critical role of compliance programs, the importance of taking seriously allegations of noncompliance, and ensuring corrective measures are implemented. Such measures often provide a favorable narrative towards government declination and can materially decrease a company's potential exposure.
- Relators are continuing to prosecute after declination. While the DOJ has recently been more active in dismissing cases that do not advance its goals, cases where the government did not intervene still led to approximately $272 million in settlements and judgments. The harsh reality remains that, even if a company succeeds in persuading the government not to intervene in a whistleblower lawsuit, it must be prepared to continue defending litigation pursued by the relator(s).
- Continued focus on individuals. As we have heard in the past, the DOJ remains focused on using "the False Claims Act and other civil remedies to deter and redress fraud by individuals as well as corporations." The recent announcement details multiple settlements with individuals, including company owners, executives, and officers, to resolve alleged FCA violations.
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