July 13, 2020

Volume X, Number 195

July 10, 2020

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Health Care Fraud Leads $2.8 Billion Collected for False Claims

The federal government’s civil recoveries for false claims during FY2018 topped $2.8 billion. Health care fraud claims lead the collection.

Government Rakes in Billions

The Department of Justice (DOJ) recently released statistics for its civil False Claims Act (“FCA”) recoveries during FY2018.   Although that total is lower than in some previous years, the trajectory of recoveries for false claims has risen relentlessly since 1986. The total federal recovery since then exceeds $59 billion. The DOJ also states that it “was instrumental in recovering additional millions of dollars for state Medicaid programs” last fiscal year.

Health Care Fraud Leads Recoveries  

During FY2018 health care fraud recoveries accounted for more than $2.5 billion of the total. This is the ninth consecutive year that health care fraud recoveries have exceeded $2 billion. According to the DOJ, recoveries involved a range of players in the health care industry, “including drug and medical device manufacturers, managed care providers, hospitals, pharmacies, hospice organizations, laboratories, and physicians.”  The DOJ stated that the “largest recoveries involving the health care industry this past year came from the drug and medical device industry.”

money stethescopeDOJ Statistics

The DOJ provided statistics on: (1) the number of new matters (both non qui tam and qui tam); (2) the amounts of settlements and judgments for both non qui tam and qui tam cases (with a further breakdown of the size of the recovery when the U.S. government intervened or otherwise pursued the matter); and (3) the relator’s share of awards, including a breakdown for when the U.S. government intervened. The statistics also provide numbers stretching back to 1986, when Congress amended the FCA to further encourage the use of qui tam actions that allow private citizens (“relators”) to bring lawsuits on behalf of the U.S. alleging fraud upon the government.

Qui Tam Remains Strong

In FY2018, qui tam actions accounted for more than $2.1 billion of the more than $2.8 billion in recoveries. Moreover, of the 767 new false claims actions revealed, 645 were qui tam actions. The Department of Health and Human Services had the vast majority of new qui tam matters, with the DOJ reporting 446 cases in FY2018. The DOJ also reported 35 new qui tam cases involving the Department of Defense. (The exact number actually filed cannot be determined because qui tam actions remain under seal initially and may remain sealed beyond the fiscal year.) Growth of qui tam actions is likely to remain strong in the future because relators received approximately $300 million in FY2018 as incentives for identifying fraudulent activities.

DOJ Recommends Continued Vigilance

Assistant Attorney General Jody Hunt, when announcing the 2018 statistics, said: “The Department of Justice has placed a high priority on rooting out and pursuing those who cheat government programs for their own gain. The recoveries announced today are a message that fraud and dishonesty will not be tolerated.” Entities and persons—as the DOJ noted that in 2018 it continued its commitment to deter fraud by individuals as well as corporations—should continue to monitor FCA case law, settlements, and judgments to understand the type of behavior and actions that may expose them to liability under the FCA.

© Copyright 2020 Squire Patton Boggs (US) LLPNational Law Review, Volume IX, Number 7


About this Author

Rebecca Worthington, Squire Patton Boggs Law Firm, Washington DC, Corporate Law Litigation Attorney
Senior Associate

Rebecca Worthington’s practice focuses on litigation, investigations and white collar criminal defense. She has experience in defending cases brought under the False Claims Act and representing clients in internal and government investigations, including matters involving economic sanctions and the Foreign Corrupt Practices Act. She has been named a Washington DC Super Lawyers – Rising Star, among the top up-and-coming lawyers, defined as 40 years of age and younger or in the practice of law for less than 10 years.

Thomas E. Zeno, Squire Patton Boggs, Healthcare Fraud Lawyer, Economic Crimes Attorney
Of Counsel

Thomas Zeno has more than 25 years of experience in the US Attorney’s Office for the District of Columbia. During that time, Tom investigated and prosecuted economic crimes involving healthcare, financial institutions, credit cards, computers, identity theft and copyrighted materials. As the office’s Healthcare Fraud Coordinator for the last eight years, Tom supervised investigation strategies of agents from the Federal Bureau of Investigation, the Department of Health and Human Services, the Drug Enforcement Administration and the Medicaid Fraud Control Unit regarding healthcare offenses. He also served as the liaison with the office’s civil division on joint proceedings. In addition, Tom served for several years as the Executive Assistant US Attorney for Operations, where he helped supervise the criminal division of the office.

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