The US Department of Justice (DOJ) has announced that fiscal 2019 recoveries from False Claims Act (FCA) settlements and judgments exceeded $3 billion, with healthcare and procurement fraud as the largest areas of recovery. That brings total recoveries under the FCA since 1986 to more than $62 billion. Recoveries were up from the more than $2.8 billion reported in 2018, and recoveries from cases initiated by qui tam relators remained roughly steady from 2018 to 2019 at over $2.1 billion.
Key Areas of FCA Activity in 2019
- Healthcare Fraud. At $2.6 billion in recoveries, 2019 marked the 10th consecutive year that healthcare industry recoveries exceeded $2 billion, closely paralleling the $2.5 billion recovered in 2018. These dollar totals do not reflect the significant additional recoveries for state Medicaid programs made with DOJ assistance. The largest subcategory of healthcare recoveries came from the drug and medical device industry, with two matters involving opioid manufacturers, one involving alleged kickbacks to induce medical professionals to prescribe medication, and the other involving marketing of an opioid addiction treatment drug, representing approximately $1.6 billion in recoveries.
- Procurement Fraud. Although the DOJ press release did not cite a total dollar amount of recoveries in this category, it noted that in 2019, the “government pursued a variety of fraud matters involving the government’s purchase of goods and services.” The government highlighted $162 million in settlement recoveries arising out of allegedly anticompetitive conduct targeting US military contracts, and four other eight-figure settlements. Reported recoveries on behalf of the US Department of Defense and its procurement programs totaled $252 million.
- Other Fraud. The DOJ referenced a “number and variety of judgments and settlements” in 2019 beyond healthcare and procurement fraud, highlighting several seven-figure settlements, most notably a $112.5 million settlement resolving allegations that a university falsified research supported by federal grants.
The DOJ press release also highlighted the role of FCA “whistleblowers,” known as qui tam relators. In 2019, relators filed 633 lawsuits (an average of 12 per week). And qui tam suits, both intervened and declined, accounted for the lion’s share of FCA recoveries – roughly $2.1 billion, or 70%. That percentage is consistent with past years with the exception of 2017, where relator-initiated lawsuits resulted in 92% of recoveries. In 2019, relators were awarded $265 million in FCA bounties.
DOJ’s press release emphasized that, consistent with its focus on individual accountability, the government sought to make corporate owners and executives jointly and severally liable for violations in a number of FCA cases in 2019 and also pursued other civil remedies against individuals.
DOJ’s release demonstrates that enforcement, mostly driven by qui tam filings, remains robust.