Biggest year ever for declined qui tams


On December 3, 2015, the Department of Justice announced that it had recovered more than US$3.5 billion in settlements and judgments from civil cases involving fraud and false claims against the government in the fiscal year ending Sept. 30.  According to DOJ’s press release, “US$1.9 billion came from companies and individuals in the health care industry for allegedly providing unnecessary or inadequate care, paying kickbacks to health care providers to induce the use of certain goods and services, or overcharging for goods and services paid for by Medicare, Medicaid, and other federal health care programs.”  Notably, the figure only includes the federal share of FCA recoveries involving state Medicaid programs.

As reported by the DOJ, a significant portion of the healthcare recoveries came from a single company, DaVita Healthcare Partners, Inc., a national dialysis provider that paid US$450 million “to resolve allegations that it knowingly generated unnecessary waste in administering the drugs Zemplar and Venofer to dialysis patients, and then billed the government for costs that could have been avoided.”  DaVita also paid US$350 million “to resolve claims that it violated the False Claims Act by paying kickbacks to physicians to induce patient referrals to its clinics.”

Another US$216 million was attributable to the settlements by numerous hospitals of FCA cases involving allegations that they billed Medicare for procedures in which certain cardiac devices were implanted in violation of a Medicare National Coverage Determination.  Stark Law cases continued to figure prominently in the 2015 recoveries involving hospitals, including a US$115 million settlement for Adventist Health System, US$69.5 million for North Broward Hospital District, and US$25 million for Columbus (Ga.) Regional Healthcare System.

The DOJ noted that it obtained substantial settlements with several pharmaceutical companies, including Daiichi Sankyo Inc., which paid $39 million to resolve allegations that it paid kickbacks to physicians to induce them to prescribe Daiichi drugs; and AstraZeneca LP and Cephalon Inc., which paid the United States US$26.7 million and US$4.3 million, respectively, in separate settlements for allegedly underpaying rebates owed under the Medicaid Drug Rebate Program.

The DOJ reported that US$2.8 billion of the US$3.5 billion recovered in fiscal year 2015 related to lawsuits filed under the qui tam provisions of the False Claims Act.  In healthcare cases, an even higher proportion of the recoveries (93%) came from qui tam cases. Of even greater significance, however, is the fact that 32% of the government recoveries in healthcare cases came from declined qui tam lawsuits.  In other words, relators proceeding without DOJ assistance collected almost US$468 million in FCA healthcare cases, an unprecedented level of success for go-it-alone relators.  Previously, the biggest year for declined qui tam cases was 2011, when those efforts yielded a relatively paltry US$174 million for the federal fisc.  It should be noted, of course, that almost all of the declined qui tam recoveries last year came from the US$450 million DaVita settlement mentioned above.

Whether 2015 was just an outlier for declined qui tam cases, therefore, remains to be seen.  Nevertheless, one should expect the relator’s bar to be emboldened to pursue more cases, including declined cases, for the foreseeable future.