Last week the Department of Justice (DOJ) issued its annual report of civil fraud recoveries and statistics under the civil False Claims Act (FCA). The Report can be found here, and the accompanying DOJ Press Release can be found here.

Here are some of the highlights:

• FCA settlements and judgments totaled just over $2.2 billion for fiscal year 2022. This is the lowest amount of recovery since 2008.

• The vast majority of the recoveries, over $1.7 billion, involved the health care industry, including drug and medical device manufacturers, durable medical equipment, home health, managed care providers, hospitals, pharmacies, hospice organizations, and physicians.

• Within health care, the following were highlighted as the focus of DOJ enforcement efforts — Medicare Advantage programs, Medicaid fraud and abuse, billing for medically unnecessary services and substandard care, drug pricing, and unlawful kickbacks.

• This year included new and notable FCA enforcement areas: (i) fraud in pandemic relief programs such as the Paycheck Protection Program (PPP); and (ii) violations of cybersecurity requirements that unnecessarily increased costs to the government or put sensitive information at risk.

• For government military contractors, there were several matters involving large recoveries for fraud that not only wasted military financial resources but also put servicemembers at risk.

• In 2022, the total number of qui tam lawsuits filed was 652. This reflects only a slight increase from the prior year but still within the usual range of whistleblower filings year after year.

• Over $1.9 billion, out of the $2.2 billion recovered, arose from qui tam lawsuits, both intervened and non-intervened.

• DOJ reported the lowest total recovery since 2004 involving qui tam lawsuits in which the United States intervened ($776 million). This notable decrease may reflect the nature and quality of qui tam lawsuits being filed by whistleblowers.

• For 2022, there was a notable increase in the number of Government initiated FCA matters — 296 — which is the highest number of such cases since the FCA’s 1986 Amendments. This trend is likely a result of many “home grown” FCA cases being initiated by the various U.S. Attorney’s Office throughout the country.

In sum, the DOJ statistics from 2022 reveal that the overall number of new FCA cases, settlements, and recoveries remains consistently strong. The lowest dollar amount of recoveries is noteworthy, but it remains to be seen whether it signifies any meaningful new direction in FCA enforcement. A more likely explanation is that it reflects only a brief pause since so many FCA investigations remain ongoing yet sealed, and this work will not bear fruit for DOJ and whistleblowers until 2023 or later.  

One final takeaway is that any organization that does business with or submits claims for payment to federal or state governments must take steps to ensure a robust compliance program as this serves as a critical step in mitigating the risk of FCA fines and penalties.