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DOJ Recoveries in Fiscal Year 2023 Exceed $2.68 Billion

April 22, 2024

Earlier this year, the Department of Justice issued its annual press release and statistical report on settlements and recoveries under the False Claims Act. For the fiscal year ended September 30, 2023 (FY 2023), False Claims Act recoveries exceeded $2.68 billion. Of that total, $2.3 billion in recoveries resulted from qui tam actions brought by whistleblowers. It was the fifteenth consecutive year of recoveries exceeding $2 billion.

Since 1986, when Congress substantially strengthened the civil False Claims Act, more than $75 billion has been returned to the public fisc under the False Claims Act.

FY 2023 saw the largest number of settlements and judgments in FCA history. Recoveries in FY 2023 were smaller in dollars than in some other years. But dollar amounts per year will ebb and flow for various reasons, as we have explained in prior years.  Therefore, they are not necessarily the best measure of the success of the FCA in any given year. More cases, even if lower average settlements, can have important deterrent effects.

Whistleblowers Critical to FY 2023 False Claims Act Recoveries

Whistleblowers continue to play a central role in False Claims Act enforcement. In fact, the number of successful qui tam cases has outnumbered the number of successful non-qui tam cases every year since 1995.  Over $2.68 billion of the total recoveries resulted from actions filed by whistleblowers under the qui tam provision of the False Claims Act. DOJ paid out $349 million in awards to whistleblowers who exposed fraud and false claims by filing these actions.

The number of lawsuits filed by whistleblowers under the qui tam provisions of the False Claims Act has grown significantly since the 1986 amendments to the law. In FY 2023, there were 712 new qui tam suits filed, making it the twelfth year out of the last thirteen when there have been more than 600 filings.  DOJ and whistleblowers were involved in 543 settlements and judgments, the largest number in a single year.

As the record-breaking number of recoveries reflects, those who seek to defraud the government will pay a high price. The American taxpayers deserve to know that their hard-earned dollars will be used to support the important government programs and operations for which they were intended.

-Principal Deputy Assistant Attorney General Boynton

Health Care Fraud Tops FY 2023 False Claims Act Recoveries

Once again, healthcare fraud accounted for the lion’s share of the recoveries, in both intervened and declined cases. These recoveries restore funds to federal programs such as Medicare, Medicaid, and TRICARE (the healthcare program for military members and their dependents.)

The $1.8 billion in healthcare fraud recoveries came from all areas of the healthcare system, including managed care organizations, hospitals, pharmacies, laboratories, acute care facilities, and physicians. Among the prominent types of healthcare fraud were unnecessary services and substandard care, Medicare Advantage (Medicare Part C) fraud, drug pricing fraud, and unlawful kickbacks in violation of the Anti-Kickback and Stark laws.

The largest recovery in a government-intervened case in FY 2023 was against The Cigna Group. The $172 million settlement resolved allegations that the Medicare Advantage organization submitted and failed to withdraw inaccurate diagnoses codes to increase its per-patient remuneration from Medicare.

The other healthcare matters involved various schemes including the provision of unnecessary medical procedures, providing substandard care, overprescribing narcotics, and payment of kickbacks in return for referrals.

Significant Recoveries in Other Areas

In addition to combatting healthcare fraud, the False Claims Act is a powerful weapon against other types of government fraud such as procurement fraud , COVID-related fraud, and threats to cybersecurity.

The Department of Justice highlighted successes in each area.

Procurement Fraud

Booz Allen Hamilton Holding Corporation paid a staggering $377 million to address allegations of improper billing related to its government contracts. The government asserted that Booz Allen wrongly assigned indirect costs from its non-government contracts to government contracts, even when there was no direct correlation or when the allocation was disproportionate.

Pandemic Fraud

Interestingly, FY2023 COVID related recoveries totaled a little more than $48.3 million in some 270 matters. DOJ has since announced that total COVID related False Claims Act recoveries to date exceed $100 million. With over $5 billion in federal COVID relief programs, many are waiting to see if and when big civil recoveries for COVID fraud will occur.

Civil Cyber-Fraud Initiative

Jelly Bean Communications Design LLC and its manager reached a settlement by paying $293,771 to address allegations related to the security of personal information on a federally funded Florida children’s health insurance website. Jelly Bean was responsible for creating, hosting, and maintaining the site. The allegations centered around Jelly Bean’s failure to ensure secure hosting of applicants’ personal data, despite its representations and commitments.

Individuals Held Accountable, Not Just Corporations

As noted in the press release,

The department continued its commitment to use the False Claims Act to deter and redress fraud by individuals as well as corporations. Such efforts deter future fraud, incentivize changes in both corporate and individual behaviors, ensure that the proper parties are held responsible, and promote the public’s confidence in our justice system.

–Department of Justice

The press release cites several examples of recoveries involving physicians, pharmacists, executives, and other individuals.

Dr. Joel Aronowitz and others paid $23.9 million to resolve allegations that they manipulated the place of service for skin grafts, fraudulently inflating reimbursements. They also failed to properly dispose of unused portions of single-use skin graft materials, instead using and billing them in later procedures involving Medicare and Medicaid beneficiaries.

Margarita Howard and her company HX5 LLC, along with affiliated joint venture HX5 Sierra LLC, paid approximately $7.8 million. They were accused of knowingly providing false information to the SBA regarding their eligibility for federal set-aside contracts intended for small businesses owned and controlled by socially and economically disadvantaged individuals.

Dr. John Y. Chung and his practice Skin Cancer & Cosmetic Dermatology Center, P.C. agreed to pay $6.6 million. The allegations involved submitting false claims for Mohs dermatological procedures.  Both the surgery and pathology portions were billed as if performed by the doctor. In reality, other individuals performed at least one portion of the procedure.

Successful Public-Private Partnership

We join DOJ in applauding the commitment of public servants throughout the federal and state governments who have dedicated themselves to this important work.

We are grateful for the hard work and courage of whistleblowers who play a critical role in identifying fraud, often at substantial risk to themselves. Our efforts to ensure that public funds are spent properly continue to benefit greatly from their actions.

Principal Deputy Assistant Attorney General Boynton

In representing whistleblowers, we see firsthand the professionalism and dedication of government attorneys, investigators, and others. Whistleblower Law Collaborative shares their commitment to exposing fraud and recovering government funds on behalf of taxpayers.

We also see firsthand the courage and commitment of our whistleblower clients. We have such admiration and gratitude for their willingness to risk coming forward. In FY 2023, our clients recovered $19 million for the government under the False Claims Act in several noteworthy settlements.