In January 2021, the U.S. Department of Justice (“DOJ”) reported its annual False Claims Act (“FCA”) statistics for recoveries resulting from civil settlements and judgements in fiscal year (“FY”) 2020 (October 1, 2019 – September 30, 2020). The FCA is the DOJ’s most powerful tool in combating false claims submitted to the government by individuals and companies. Most FCA cases brought by the government target those that operate in the healthcare industry. In FY 2020, total recoveries exceeded $2.2 billion, representing the lowest annual recovery in 12 years and a 29 percent decline over FY 2019. Healthcare companies made up $1.8 billion of the $2.2 billion.
Similar to 2019, companies in the pharmaceutical industry accounted for the lion’s share of the recoveries in 2020, and developments from the first five months of FY 2021 indicate there will be a similar trend this year. This is also supported by the Office of Inspector General’s (“OIG”) Work Plan, which continues to prioritize initiatives to combat the opioid epidemic by analyzing Medicare Part D spending directed to pharmaceutical manufacturers, distributors and prescribers, as well as beneficiaries who receive excessive amounts of opioids through the Medicare Part D program. The Work Plan also includes several projects aimed at addressing fraud, waste and abuse associated with efforts to support those impacted by the COVID-19 pandemic, including the Coronavirus Aid, Relief and Economic Security (CARES) Act; expansion of telehealth services; and companies providing COVID-19 testing. It is almost a certainty that recoveries in FY 2021 will include a significant number of cases associated with these and other COVID-19 relief programs.
The COVID-19 pandemic is undoubtedly the primary culprit for the dip in recoveries in FY 2020 given that it completely upended the healthcare industry and caused courts across the country to shut down for extended periods of time. However, while total recoveries declined, the total cases filed in FY 2020 represent a 17 percent increase over 2019. This, coupled with several significant recoveries in the first quarter of FY 2021, the OIG’s focus on opioids and COVID-19 relief programs, a new administration in the White House, as well as indications that the government is becoming more effective at identifying anomalies in healthcare data, suggests that recoveries may not only rebound in FY 2021, but could potentially double or triple prior year amounts.
Download our “2020 False Claims Act Recoveries by the Numbers” for a graphic representation of total recoveries and cases over the last 10 years, as well as some key takeaways from the FCA statistics and DOJ’s recent press release regarding FY 2020 FCA recoveries.
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Bennett Thrasher’s Disputes Resolution & Forensics practice assists healthcare organizations with regulatory compliance, governmental investigations, litigation support and more. To learn how we can help, contact Patrick Braley or Chris Roane by calling 770.396.2200.
