In January 2020, the United States Department of Justice (“DOJ”) issued a press release announcing more than $3 billion in settlements and judgments from civil cases involving fraud and false claims against the government had been collected in the 2019 fiscal year. Health care was, once again, the most adversely affected industry.

In all, health care providers and manufacturers paid back $2.6 billion over the course of the year. Among the providers and manufacturers affected were drug and medical device manufacturers, managed care providers, hospitals, pharmacies, hospice organizations, laboratories, and physicians. This marks the 10th consecutive year that the DOJ’s civil health care fraud settlements and judgments have exceeded $2 billion.

The DOJ targets a wide swath of health care providers and manufacturers, focusing not just on recovering money from federal payors (i.e. Medicare, Medicaid, TRICARE), but also on deterring fraud schemes that place patients at risk and increase health care costs. The DOJ showcased a willingness to prosecute individuals as well as corporations under the False Claims Act. In one case, Vanguard Healthcare LLC negotiated a settlement with the DOJ for approximately $18 million to settle allegations of substandard nursing home care. The DOJ then pursued the majority owner and former director of operations for Vanguard, collecting an additional $250,000 from them individually. Similarly, the CEO and former Vice President of Operations for the compounding pharmacy Diabetic Care Rx LLC paid more than $300,000 in a settlement over false claims within a kickback scheme, even after the company itself reached a $21 million settlement with the DOJ.

Aiding the DOJ’s aggressive recovery effort are qui tam, or whistleblower, actions. Since the False Claims Act was strengthened in 1986 by increasing whistleblower incentives, total financial recovery has exceeded $62 billion. Qui tam-initiated lawsuits have dramatically increased since 1986, with 633 qui tam suits filed in 2019.

The False Claims Act has become a powerful tool at the DOJ’s disposal. Considering how aggressively the DOJ pursues the health care industry, it is imperative that each health provider or supplier’s compliance requirements are in place, up to date, and effective.