DOJ Releases Annual Civil Fraud Recovery Statistics and Results…A Look Behind the Numbers

Bass, Berry & Sims PLC

Bass, Berry & Sims PLC

On February 22, the Department of Justice (DOJ) released its annual report of civil fraud recoveries for FY2023, along with a press release highlighting DOJ’s civil enforcement efforts. 

Our top ten observations from DOJ’s release are:

  1. Total Recoveries Remain Comparatively Low.  The reported $2.69 billion total civil fraud recovery is the third-lowest total recovery since 2010.  
  2. Healthcare Industry-Related Recoveries Continue Downward Trend.  The annual total recoveries involving the healthcare industry continue to trend downward, as three of the past four fiscal years (2020, 2022, 2023) have seen recoveries under $1.9 billion.  By comparison, from FY2010 to FY2019, total annual recoveries never fell below $2.1 billion and typically hovered around $2.5 billion.  FY2022 and FY2023 had the lowest two-year average for healthcare recoveries since FY2008-FY2009.
  3. Percentage of Total Recoveries Involving Healthcare Industry Drops. False Claims Act recoveries involving the healthcare industry amounted to approximately 67.6% of the total recoveries.  Although the majority of recoveries are still tied to the healthcare industry, the percentage involving the healthcare industry typically is over 80%.  In FY2023, however, there was a $377 million settlement involving the U.S. Department of Defense (DOD) and Booz Allen Hamilton Holding Company, which drove down the percentage of recoveries involving the healthcare industry significantly. The total recoveries from actions involving the DOD exceeded $551 million, which was the highest total since 2009.
  4. Record Setting Year? Let’s Take a Closer Look.  DOJ’s accompanying press release reported that “the government and whistleblowers were party to 543 settlements and judgments, the highest number of settlements and judgments in a single year.”  A search of federal court dockets reflects that nearly 300 False Claims Act actions were filed in the U.S. District Court for the Northern District of Mississippi.  Nearly all involved consent judgments and small dollar recoveries stemming from false claims associated with the pandemic-related Paycheck Protection Program (PPP).  The press release acknowledged that “approximately 270” of its settlements and judgments involved improper PPP loans, from which it obtained a total of $48.3 million—which averages to less than $179,000 per settlement or judgment.  While DOJ’s actions in pursuing PPP fraud through the False Claims Act have led to dramatic increases in the total number of False Claims Act actions and settlements this year, these actions are not producing a corresponding increase in total False Claims Act recoveries. 
  5. A Look Behind the Number of Non-Qui Tam Matters.  DOJ reported 500 new non-qui tam matters. This is the most False Claims Act matters initiated by DOJ since the 1986 False Claims Act amendments, and nearly 200 matters more than FY2022.  Notably, there was no real corresponding increase in recoveries in non-qui tam matters compared to prior years.  If anything, recoveries in these matters appear to be lacking, as DOJ reported the fifth-lowest total recovery from government-initiated False Claims Act matters since 2009.  The nearly 300 new False Claims Act lawsuits filed by the government in the Northern District of Mississippi involving PPP loans likely account for this significant increase.   
  6. Qui Tam Lawsuits Tick Upward.  Relators filed 712 qui tam lawsuits under the False Claims Act in FY2023.  This is the highest total since 2016.  There have been 6,675 qui tam lawsuits filed by relators during the last ten years.   
  7. Qui Tam Lawsuits Involving the Healthcare Industry Trend Downward.  Relators filed 348 qui tam lawsuits under the False Claims Act in FY2023 involving the healthcare industry.  That is the lowest number of qui tam lawsuits involving the healthcare industry since 2009 and reflects a decrease in the number of such suits for the third straight year.    
  8. Relator Recoveries Involving Healthcare Matters Dip. The total share of awards relators obtained from qui tam actions involving federal healthcare programs ($200.24 million) was the lowest total since 2009 by a clear margin.
  9. MA/AKS/EHR.  Among the key healthcare-related settlements, significant areas of focus included Medicare Advantage (MA), the Anti-Kickback Statute (AKS) and Electronic Health Record (EHR) vendors.  We cover each of these areas of focus, along with nearly every other False Claims Act settlement from 2023, in our Healthcare Fraud Year in Review’s settlement chart. 
  10. Controlled Substances Act/Cybersecurity/Pandemic Fraud.  The government reiterated the intersection of the False Claims Act and enforcement priorities concerning opioids and drug diversion, cybersecurity and pandemic relief-related fraud schemes.  We discuss each of these areas of focus in our Healthcare Fraud Year in Review’s “Issues to Watch.”

Be on the lookout for our 11th annual Healthcare Fraud and Abuse Review, which will be released on February 26 and will provide comprehensive analysis of enforcement developments affecting the healthcare industry, significant court decisions involving the False Claims Act, and an overview of settlements involving fraud and abuse issues. 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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