EnforceMintz — False Claims Act Statistical Year in Review

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Mintz - Health Care Viewpoints

Health Care Cases Spur Largest FCA Recoveries

Mintz’s annual report on False Claims Act case activity analyzes data from DOJ and the firm’s Health Care Qui Tam Database, and explores the 2024 record high in FCA case activity, the moderate increase in health care–related activity, and continuing strong recoveries in health care cases.

A Letter from the chair

In this edition of EnforceMintz, we analyze trends in False Claims Act (FCA) investigations and lawsuits using data recently made available by the Department of Justice (DOJ) in its annual report of FCA statistics and DOJ’s discussion of FCA enforcement trends and recoveries that accompanied its annual report.

The number of new FCA cases filed in FY 2024 remained high, in large part due to COVID-19 pandemic relief fraud pay-and-chase efforts. While those cases may have been numerous, health care FCA cases largely drove financial recoveries. DOJ recovered over $2.9 billion in FY 2024, and health care cases represented about 57% of that amount. Given the upheaval that the federal workforce is currently experiencing, consistent devotion of resources to government investigations is in question, so these could differ for FY 2025.

For additional health care enforcement analysis, view our recently released Health Care Enforcement Trends & 2024 Outlook, which reports on qui tam FCA cases, other government enforcement actions, and significant regulatory developments from the past year.

Karen Lovitch

Chair, Health Care Enforcement Defense Practice

As 2024 Overall New Cases and Investigations Surge to Record Highs, Health Care Cases Continue to Drive Largest False Claims Act Recoveries

The post-pandemic increase in False Claims Act (FCA) case activity roared on with a vengeance during the federal fiscal year (FY) ended September 30, 2024. As reported in the annual statistical report published by the Department of Justice (DOJ) FY 2024 saw the highest number of qui tam cases ever filed under the FCA’s whistleblower provisions, leading to unprecedented overall FCA activity. While health care case volume grew moderately, the overall increase in reported volume appears again to have resulted primarily from cases alleging fraud and abuse arising from the pandemic-relief Paycheck Protection Program (PPP). These results extend an anomalous recent trend where health care cases no longer constitute a majority of new FCA cases and investigations. However, for settlements and judgments in FY 2024, health care cases continue to account for the vast majority of FCA recoveries, which underscores the higher stakes at play in health care fraud and abuse litigation.

Record qui tam case volume led to overall record volume in FY 2024. For the second year in a row, DOJ reported a large spike in total new FCA cases. Even as the number of government cases and investigations slightly declined, 979 new qui tam cases were filed during FY 2024, an annual total that, standing alone, exceeds the total of all new cases and investigations in each year prior to 2023. When added to the still large volume of government-initiated cases and investigations, the net result for FY 2024 was 1,402 new cases, a 15% increase from FY 2023’s record 1,218 new cases.

As shown here, DOJ-initiated case activity declined about 16% in FY 2024, ending a five-year trend of increased enforcement activity. Even with that decrease, the number of new government cases in FY 2024 remained near historic highs, at a level not seen since the late 1980s. But, as DOJ highlights in its press release on its FY 2024 statistics, the real story is the record number of qui tam filings.

Non–health care cases are driving new case volume. That overall case volume continues to be driven by qui tam cases is not a new phenomenon. As we observed nine years ago in our analysis of DOJ’s FY 2015 statistics, the immense growth in FCA litigation over the preceding 20 years was almost entirely the result of skyrocketing qui tam case volume. Our analysis found that health care–related cases primarily lead to this growth, which reflects the growing share of the federal budget devoted to health care spending. The historical dominance of health care cases as a function of overall FCA case volume can be seen clearly in the following chart.

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A Letter from the chair

In this edition of EnforceMintz, we analyze trends in False Claims Act (FCA) investigations and lawsuits using data recently made available by the Department of Justice (DOJ) in its annual report of FCA statistics and DOJ’s discussion of FCA enforcement trends and recoveries that accompanied its annual report.

The number of new FCA cases filed in FY 2024 remained high, in large part due to COVID-19 pandemic relief fraud pay-and-chase efforts. While those cases may have been numerous, health care FCA cases largely drove financial recoveries. DOJ recovered over $2.9 billion in FY 2024, and health care cases represented about 57% of that amount. Given the upheaval that the federal workforce is currently experiencing, consistent devotion of resources to government investigations is in question, so these could differ for FY 2025.

For additional health care enforcement analysis, view our recently released Health Care Enforcement Trends & 2024 Outlook, which reports on qui tam FCA cases, other government enforcement actions, and significant regulatory developments from the past year.

Karen Lovitch

Chair, Health Care Enforcement Defense Practice

As 2024 Overall New Cases and Investigations Surge to Record Highs, Health Care Cases Continue to Drive Largest False Claims Act Recoveries

The post-pandemic increase in False Claims Act (FCA) case activity roared on with a vengeance during the federal fiscal year (FY) ended September 30, 2024. As reported in the annual statistical report published by the Department of Justice (DOJ) FY 2024 saw the highest number of qui tam cases ever filed under the FCA’s whistleblower provisions, leading to unprecedented overall FCA activity. While health care case volume grew moderately, the overall increase in reported volume appears again to have resulted primarily from cases alleging fraud and abuse arising from the pandemic-relief Paycheck Protection Program (PPP). These results extend an anomalous recent trend where health care cases no longer constitute a majority of new FCA cases and investigations. However, for settlements and judgments in FY 2024, health care cases continue to account for the vast majority of FCA recoveries, which underscores the higher stakes at play in health care fraud and abuse litigation.

Record qui tam case volume led to overall record volume in FY 2024. For the second year in a row, DOJ reported a large spike in total new FCA cases. Even as the number of government cases and investigations slightly declined, 979 new qui tam cases were filed during FY 2024, an annual total that, standing alone, exceeds the total of all new cases and investigations in each year prior to 2023. When added to the still large volume of government-initiated cases and investigations, the net result for FY 2024 was 1,402 new cases, a 15% increase from FY 2023’s record 1,218 new cases.

Increase in total case volume

Increase in qui tam case volume

Decrease in
non-qui tam cases

As shown here, DOJ-initiated case activity declined about 16% in FY 2024, ending a five-year trend of increased enforcement activity. Even with that decrease, the number of new government cases in FY 2024 remained near historic highs, at a level not seen since the late 1980s. But, as DOJ highlights in its press release on its FY 2024 statistics, the real story is the record number of qui tam filings.

Non–health care cases are driving new case volume. That overall case volume continues to be driven by qui tam cases is not a new phenomenon. As we observed nine years ago in our analysis of DOJ’s FY 2015 statistics, the immense growth in FCA litigation over the preceding 20 years was almost entirely the result of skyrocketing qui tam case volume. Our analysis found that health care–related cases primarily lead to this growth, which reflects the growing share of the federal budget devoted to health care spending. The historical dominance of health care cases as a function of overall FCA case volume can be seen clearly in the following chart.

However, looking closely at the overall trend, it is apparent that health care cases recently ceased to constitute a majority of new FCA cases. The change can be seen most clearly by looking at just the past 10 years of new case activity. As the next chart shows, starting in 2022, non-health care cases supplanted health care–related cases as the largest component of overall FCA enforcement activity.

This trend appears to have been driven by aggressive enforcement directed toward fraudulent claims for COVID-19 pandemic relief. According to DOJ’s press release, DOJ enforcement efforts in FY 2024 included the pursuit of cases involving improper payments under the COVID-era Paycheck Protection Program. DOJ stated that pandemic-related cases resulted in 250 settlements and judgments, yielding recoveries in excess of $250 million. That large volume of case resolutions tracks the commensurately large volume of new non–health care and defense cases shown in this table. The continuing focus on enforcement efforts directed toward pandemic relief fraud makes it likely that the volume of non-defense and health care case activity could continue to remain high over the next several years before returning to historic levels as the pandemic fully recedes into the past.

Health care cases still take precedence, even as they constitute a declining share of overall case volume. Health care’s declining share of overall FCA case activity paints a deceptive picture. The stakes are much higher in health care cases, as reflected in the statistics for FCA recoveries. In FY 2024, recoveries in health care cases totaled almost $1.7 billion, compared to defense case recoveries of $93 million and total recoveries in other cases of just under $1.2 billion. This resulted in health care cases accounting for 57% of all recoveries, continuing the trend that has played out over the past 10 years. Even as the number of health care cases and investigations makes up a smaller portion of overall case volume, in each of the past 10 years, health care settlements and judgments have far outstripped recoveries for other types of cases.

The preponderance of health care recoveries illustrated in the preceding chart can be further illustrated by looking at total FCA recoveries over the past 10 years. During that time, recoveries for all cases totaled about $33.5 billion. Of that amount, health care cases yielded recoveries of $23.5 billion, which represents 73% of the total. By comparison, over that same period, roughly 54% of new case filings were health care cases. On a per-case basis, the stakes in health care cases are significantly higher than in other cases. This phenomenon again reflects the continuing growth in health care expenditures as a component of total federal spending that we first noted nine years ago.

Here, as in many domains, it is dollars, and not raw numbers, that provide the true measure of what is important. By that measure, health care cases continue to be the most important area for FCA enforcement and litigation activity. And, lest there be any doubt about how DOJ views the significance of health care FCA case activity, the first and longest discussion of enforcement activity in the DOJ press release concerns health care fraud. For the foreseeable future, as has been true for the past 30 years, health care cases will continue to be the paramount focus of government and qui tam case activity.

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