The Department of Justice (DOJ) released its annual summary of False Claims Act (FCA) recoveries for the prior fiscal year, and the data points to a number of notable trends.
Although DOJ brought in the second-highest number of settlements and judgments that the government has ever collected in a single year, the dollar value of those settlements is down significantly from 2021 and remains below pre-pandemic recovery levels. The increased number of total actions coupled with the decrease in total recoveries may be explained by DOJ’s stated emphasis on investigating COVID-19-related stimulus fraud — cases which, on average, tend to produce relatively low-dollar value recoveries compared to larger corporate investigations.
Also noteworthy is the fact that judgments from intervened qui tam actions dropped steeply (nearly 40%) from FY2021. This continues a consistent year-over-year slide going back to 2016 and was the steepest year-by-year drop during that span.
Most Notable Trend
In our view, the most notable trend for fiscal year 2022 recoveries appears to be relators’ increased success in pursuing non-intervened actions. Settlements and judgments from declined qui tams were up over 240% from FY2021 ($1.18 billion from $480 million), which is also nearly double the previous record amount ($602 million in FY2017). Relators share awards from declined matters also jumped over 5.5 times from FY2021, from $62 million to $347 million. Although the enormous Biogen settlement described below impacted these numbers, even in its absence, recoveries and relator’s shares in non-intervened matters increased significantly in 2023.
As always, the bulk of the FCA settlements and judgments came from healthcare collections, which totaled over $1.7 billion of the roughly $2.2 billion in recoveries. The collections included recoveries in cases involving Medicare and Medicaid fraud, Medicare Advantage overpayments, kickbacks, and provision of substandard care.
The largest single settlement was from drug manufacturer Biogen, which paid $843.8 million to resolve allegations that it offered kickbacks to physicians in order to boost sales of its multiple sclerosis therapies. The DOJ also pursued several Medicare Advantage cases, alleging that insurers knowingly submitted inaccurate information, or failed to correct it, in order to increase reimbursements. The DOJ’s actions on Medicare Advantage organizations signal a continued focus in this area as the Centers for Medicare and Medicaid Services attempts to revamp its approach to risk adjustment audits in order to reduce overpayments. 2022 also saw the DOJ’s first FCA settlements in cases alleging failure to meet government cybersecurity standards, a new area of focus that will surely continue to increase in scrutiny.