Record Year for the DOJ: FCA Enforcement Trends

March 27, 2024

The U.S. Department of Justice (DOJ) announced that settlements and judgments under the False Claims Act (FCA) in fiscal year 2023 exceeded $2.68 billion. Although the total dollar amount is not a record, this marks a record 543 settlements and judgments in a fiscal year. What’s more, 1012 new matters were opened, another record. This activity highlights the DOJ's relentless effort to combat fraud, particularly in the healthcare industry, which accounted for nearly two-thirds of these recoveries, amounting to approximately $1.8 billion.

Whistleblower-initiated qui tam lawsuits continue to increase and have become a significant portion of FCA cases. Notably, 87% of the settlements in 2023 were tied to whistleblowers. Known as 'relators,' whistleblowers can receive 15-30% of the funds recovered in successful cases. Famously, a 2022 case awarded a whistleblower approximately $250,000,000. Thus, there are considerable incentives in place for employees to report what may be viewed as inappropriate conduct. In 2023, there were 712 qui tam filings, up from 652 in 2022. The Justice Department secured over $2.3 billion from these lawsuits last year.

Healthcare Fraud Under the Microscope: A Continued Focus for 2024

The FCA is a crucial tool in the fight against fraud, waste, and abuse in government spending. It aims at entities and individuals who submit false claims for government funds or avoid financial obligations to the government. With Medicare and Medicaid fraud costing taxpayers upwards of $100 billion annually, the DOJ continues to focus on the health care space. Entities found guilty of FCA violations are subject to civil monetary penalties and may face criminal charges.

The DOJ intends to continue its rigorous pursuit of healthcare fraud into FY2024, focusing on fraudulent activities related to Medicare, Medicaid, and the Food and Drug Administration (FDA), as well as its Civil Cyber-Fraud Initiative. The emphasis includes prosecuting companies that submit inaccurate information to the FDA, underlining the importance of rigorous data verification—particularly from third-party laboratories—as a crucial part of healthcare compliance.

Navigating the Regulatory Landscape: Implications for Manufacturers

Considering the DOJ's ongoing commitment to eliminating healthcare fraud and the increasing number of whistleblower cases, manufacturers and providers should audit, reassess, and strengthen their compliance programs as necessary.

If you have questions, contact Gardner Law.