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False Claims Act Recoveries Top $2.2 Billion in FY 2022

March 8, 2023

Last month, 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, 2022 (FY 2022), False Claims Act recoveries exceeded $2.2 billion. Of that total, $1.9 billion recoveries were in False Claims Act whistleblower suits. Significantly, for the first time, False Claims Act recoveries in declined qui tam cases exceeded recoveries in intervened cases. While the total recovered is less than in prior years, it was the fourteenth consecutive year of recoveries exceeding $2 billion. Total False Claims Act recoveries since 1986, when Congress substantially strengthened the civil False Claims Act, now exceed $72 billion.

Recoveries in FY 2022 were smaller than some other years.  However, FY 2022 saw the second largest number of settlements in FCA history. Some commentators focus on the total dollars recovered and see FY 2022 as a down year. But dollar amounts per year will ebb and flow.  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.

The COVID-related fraud cases are plentiful and important but yield smaller dollars on average. Small dollar settlements can be as important as large dollar ones. Fraud is fraud and must be rooted out. And always remember the non-monetary benefits of a successful case.  These include protecting public health and patients, service members, and first responders, to ensuring that those who play by the rules and compete fairly are not undermined by unscrupulous competitors, to deterring would be bad actors.

Whistleblowers Critical to FY 2022 False Claims Act Recoveries

Whistleblowers continue to play a central role in FCA enforcement: over $1.9 billion of the total recoveries resulted from qui tam actions filed under the False Claims Act. DOJ paid out $489 million in awards to whistleblowers who exposed fraud and false claims by filing these actions.

“We are grateful for the hard work and courage of those private citizens who bring evidence of fraud to the Department’s attention, often putting at risk their careers and reputations. Our ability to protect citizens and taxpayer funds continues to benefit greatly from their actions.”

Principal Deputy Assistant Attorney General Boynton

The number of lawsuits filed by whistleblowers under the qui tam provisions of the False Claims Act has grown significantly since 1986 when the law was amended. In FY 2022 there were 652 new qui tam suits filed, making it the eleventh year out of the last twelve when there have been more than 600 filings.  DOJ and whistleblowers were involved in 351 settlements and judgements, the second- largest number in a single year.

Protecting taxpayer dollars by preventing fraud and abuse is a critical priority for the Department of Justice. The large number of settlements and judgments this past year demonstrates that the False Claims Act remains one of the most important tools for ensuring that public funds are spent properly and advance the public interest.

-Principal Deputy Assistant Attorney General Boynton

Significantly, for the first time, recoveries in declined qui tam cases exceeded recoveries in intervened cases. This was largely due to a $900 million settlement in one declined case filed over 10 years ago against Biogen, but continues a trend of successful declined cases. There are many reasons DOJ may decline a case and pursuing a declined case can be very challenging. Historically, government intervention has been critical to the success of a whistleblower case.  In recent years, however, whistleblowers and their counsel have successfully litigated declined cases, returning large amounts to the public fisc. We suspect this year is an anomaly and expect that government intervened cases will in the future return the lion’s share of the recoveries. But time will tell.

Health Care Fraud Tops FY 2022 False Claims Act Recoveries

Once again, health care fraud accounted for the lion’s share of the recoveries, in intervened and declined cases.  The $1.7 billion in health care fraud recoveries came from all areas of the health care system, including drug manufacturers, medical device companies, labs (for example, genetic testing, urine testing), rehabilitation facilities, nursing facilities, hospitals, hospices, physicians, compounding pharmacies, Medicaid, and Medicare Advantage. Among the prominent types of health care fraud were unnecessary services and substandard care, Medicare Advantage fraud, drug pricing fraud, and unlawful kickbacks in violations of the Anti-Kickback and Stark laws.

The largest recovery in a government intervened case was against drug manufacturer Mallinckrodt ARD LLC for $260 million for underpaying drug rebates to the Medicaid Program and paying kickbacks. A relator represented by our firm was responsible for the drug rebate portion of the settlement ($234 million). As noted above, the largest recovery overall ($900 million) came in a declined case against Biogen.

Procurement, Cybersecurity, COVID-19, and Other Areas of Fraud Remain Priorities

Combatting health care fraud is not the only purpose of the False Claims Act. Procurement fraud, COVID-related fraud, and threats to cybersecurity are in the cross hairs and remain priorities as well.

The False Claims Act thus serves to safeguard government programs and operations that provide access to medical care, support our military and first responders, protect American businesses and workers, help build and repair infrastructure, offer disaster and other emergency relief, and provide many other critical services and benefits.

–Department of Justice

The Department of Justice highlighted successes in each area.

Interestingly, COVID-19 related recoveries totaled a little more than $8.5 million in some 37 matters (an average of $230,000 per case). With over $5 billion in federal COVID relief programs, many are waiting to see if and when big civil recoveries for COVID-19 fraud occur.

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

Several examples of settlements and recoveries involving physicians, pharmacists, executives and other individuals are cited in the press release.

Shared Commitment Leads to False Claims Act Recoveries

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

As ever, we are indebted to all those who work tirelessly to protect the public fisc from fraud: those in the Fraud Section of the Civil Division, the U.S. Attorneys’ Offices, the agency Offices of Inspector General and Offices of General Counsel, and the many other federal and state agencies that support this important work.

–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 willingness to risk coming forward. In FY 2022, our clients recovered $275 million for the government under the False Claims Act.