Happy New Year.
As we come to the close of 2017, the Civil Division of the U.S. Department of Justice ("DOJ") recently issued its 2017 annual statistics for False Claims Act ("FCA") cases filed and settled in fiscal year 2017 (10/1/16 - 9/30/17).
The DOJ's press release highlights many of the Department's achievements (which I will not repeat here). I wanted to take a few moments to focus further on what DOJ's statistics reveal. The DOJ publishes yearly statistics for FCA cases (i) overall ("the overview"); (ii) Department of Defense related cases; (iii) Department of Health and Human Services (healthcare) related cases; and (iv) all "other" FCA cases. DOJ "obtained" --that does not mean collected -- $3.7 billion in "in settlements and judgments from civil cases involving fraud and false claims against the government." DOJ does not say how much it actually netted in cash as opposed to "judgments."
As shown in its "overall" statistics, 799 False Claim Act cases were filed in 2017: roughly 50 cases less than last year but more than 2015. Generally, though, the total number of cases filed has been generally consistent for several years. In 2017, DOJ filed 125 "non-qui tam" or direct-filed cases and qui tams accounted for 674 matters. Of these 674 cases, DOJ does not say in which it has intervened, declined, or is still considering what to do nor does it tell us in which districts they were filed.
Healthcare/HHS cases predominated in 2017: 544 cases, almost 68% of all FCA cases filed, and most of these were qui tams. 491 or almost 61% of all FCA cases were health care qui tams. In direct-filed healthcare cases, this was DOJ's third highest number of cases filed ever, and for qui tams, it was the second best year --surpassed only by 2016's 503 qui tams filed.
As it has for many years, the "other" category of FCA cases continues to have the second most number of FCA cases: 208 or 26%, and of these, 155 were qui tams, which is the lowest number of "other" qui tams filed since 2010.
Department of Defense ("DOD") related filings continued to be small: 47 or 5.8% of all FCA cases. Of note: relators filed only 28 DOD related qui tams, which is the smallest number since 1988. DOJ direct-filed 19 DOD-FCA cases, which is the most since 2011 --up from 9 in 2016 and 7 in 2015. Of course, we have no idea if any of these newly filed cases were resolved or dismissed, as DOJ purportedly says it may do for qui tam cases lacking merit. Turning to the settlement/judgments DOJ collected in 2017, a few observations:
- Nearly $428 million was collected in FCA cases where DOJ declined to intervene. That is the second highest amount collected in declined cases since stats were kept. 2015's $512 million in declined case settlements is the best year. Relators collected $43.593 million in relator share awards in these 2017 declined cases -- the third best year ever.
- Not surprisingly, a large portion of relators' success in declined cases was driven by healthcare settlements. Relators collected $380 million in HHS/healthcare declined cases in 2017 and collected $32.5 in relator share awards -- the second best year ever in both of these categories.
- As with declined healthcare cases, relators had a successful year in declined cases in the "other" category, obtaining $45 million in settlements and $10.9 million in relator share awards: the third best year ever.
- These stats continue to bear out what many defense attorneys have been experiencing for some time: relators increasingly are willing to aggressively pursue cases when the government has declined to intervene.
- The $265.5 million DOJ collected in overall direct-filed cases was the lowest amount it collected since 2013 and the third lowest year since 2004. Clearly, the reason for this is that DOJ collected only $32.6 million in direct-filed HHS/healthcare cases -- down from $97.5 million in 2016. DOJ has not had such a poor collections year in this category since 1993.
- Overall,it should be no surprise that qui tam filings are strong overall and in healthcare cases. DOJ paid $349 million to relators in intervened cases overall last year, of which $250 million was paid in intervened healthcare cases.
DOJ stats continue to show that to generate False Claims Act cases the Department continues to rely heavily on relators and that huge awards in qui tams and declined cases continue to serve as as a powerful incentive to relators and their counsel to file FCA claims. Since 1987, DOJ has paid relators $6.584 billion in relator share awards.