Key Takeaways From DOJ’s Annual FCA Recoveries Press Release: FY 2022 Edition
March 6, 2023 I Sherrard Roe Voigt & Harbison Blog I Christopher C. Sabis
Every year, the Department of Justice (DOJ) issues a press release disclosing its recoveries in False Claims Act (FCA) actions for the past fiscal year. The release provides the Department with an annual opportunity to flex about its enforcement efforts and, as it always does, proudly share a cumulative top-line figure about the amounts it recovered through settlements and judgments. For fiscal year 2022, that figure is $2.2 billion. Although some commentators have written headlines about how low this figure is, it is actually pretty consistent with last year when you take out the $3 billion of the FY 2021 total that came from two opioid-related resolutions.
Although the $2.2 billion figure means little on its own, the report can give those in the healthcare industry and others who receive government funds and reimbursements some insights into what to expect in the coming year regarding the DOJ’s priorities and approach to FCA investigations and enforcement actions. Here are some of the key takeaways from this year’s report:
- Of the more than $2.2 billion in FCA settlements and judgments reported by the DOJ in fiscal year 2022, over $1.7 billion related to matters involving the healthcare industry, including drug and medical device manufacturers, durable medical equipment, home health and managed care providers, hospitals, pharmacies, hospice organizations, and physicians. Unsurprisingly, healthcare maintains its dubious distinction as DOJ Target No. 1.
- Whistleblowers filed 652 qui tam suits in FY 2022, a slight uptick from the 598 suits filed in FY 2021. Settlements and judgments exceeded $1.9 billion in these and earlier filed qui tam
- As always, the DOJ went hard after kickback schemes in the healthcare industry and recovered substantial sums. The DOJ highlighted multiple seven and eight-figure settlements but the standout is the $843.8 paid by pharmaceutical company Biogen Inc. to resolve allegations that the company offered and paid kickbacks in the form of speaker honoraria, speaker training fees, consulting fees, and meals to physicians who spoke at or attended Biogen programs connected to Biogen’s multiple sclerosis drugs. HHS-OIG warned us this was coming back in 2020.
- The Department pursued and obtained several large settlements involving unnecessary services and substandard care by nursing home companies and home health providers, hospital systems, pharmacies, and medical device companies. It also continued its enforcement efforts relating to Medicare Advantage Plans, with a newly intervened case to add to its already healthy docket of Medicare Part C litigation.
- The FY 2022 recoveries “reflected the department’s focus on new enforcement priorities, including fraud in pandemic relief programs and alleged violations of cybersecurity requirements in government contracts and grants"
- Speaking of the pandemic, the DOJ continued its efforts involving COVID-19-related fraud, focusing on improper payments under the Paycheck Protection Program (PPP). The department resolved 35 FCA matters, recovering over $6.8 million and avoiding more than $1.5 million in losses for the SBA tied to federal guarantees on fraudulent PPP loans. It will be interesting to see the scope of conduct that DOJ pursues through the FCA relating to pandemic relief measures like the PPP in FY 2023, especially given the relatively low $194,286 recovered per PPP case in 2022.
- $500 million is also a pretty consistent recovery for non-healthcare procurement fraud, where fraud on the military and small business programs were big ticket items
- FY 2021 saw the DOJ’s first recovery under the Civil Cyber-Fraud Initiative it launched in October 2021 to use the FCA to combat new and emerging cyber threats
- DOJ also highlighted that it continues holding individuals, not just corporations, accountable for FCA violations, citing resolutions involving physicians and corporate executives
We continue to monitor developments in the FCA space. Follow us on LinkedIn for future updates and contact the lawyers in our Government Compliance & Investigations or Healthcare groups with any questions or concerns.
Chris Sabis is a healthcare and procurement fraud lawyer specializing in Government Compliance and Investigations, Healthcare, and Litigation.
