In February 2022, the U.S. Department of Justice (DOJ) reported its annual False Claims Act (FCA) statistics for recoveries resulting from civil settlements and judgments in fiscal year (FY) 2021 (October 1, 2020 – September 30, 2021). The FCA is one of the DOJ’s most effective tools 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 2021, total FCA recoveries exceeded $5.6 billion, representing the largest annual recovery since 2014 and second largest of all time. This represents a 150 percent increase over FY 2020. Healthcare-related matters accounted for approximately $5 billion or 89 percent of the total recoveries, and this figure is nearly $2 billion more than any other year. Conversely, in 2014, the FCA recoveries were largely driven by over $3 billion in recoveries from banks that were involved with the 2008 housing and mortgage crisis.
Whistleblowers remain critical to the government’s recovery efforts, with 598 qui tam matters filed in FY 2021, compared to 203 cases arising from government-initiated investigations. Total cases in FY 2020 reached an all-time high of 934, and while the total cases in FY 2021 represent a 14 percent decrease from the prior year, the 801 total cases from FY 2021 are tied for the sixth most ever. Moreover, the 203 government-initiated cases are the second most since 1996 (behind FY 2020).
Similar to FY 2020, companies in the pharmaceutical industry accounted for a majority of the recoveries in FY 2021. Approximately $2.8 billion of the total FCA recoveries in FY 2021 relate to the October 2020 Purdue Pharma global resolution of criminal and civil liability regarding its alleged inappropriate promotion of opioids to healthcare providers. Also within the pharmaceutical industry were large resolutions with Indivior for its alleged promotion of an opioid-addiction-treatment drug to prescribers and several drug manufacturers that were alleged to have violated the Anti-Kickback Statute as part of a conspiracy to fix the price of certain drugs.
While the pharmaceutical industry accounted for a significant share of the FY 2021 recoveries, a multitude of hospitals, health systems, laboratories, medical device companies, managed care organizations and others were involved in kickback, false billing, unsupported diagnosis coding and COVID-19 fraud matters and schemes that led to hundreds of millions of dollars in recoveries.
Bennett Thrasher’s Dispute 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.