On Tuesday, the OIG released its Semiannual Report to Congress, which stated that expected recoveries for fraud and abuse activities total $2.77 billion in the first half of fiscal year 2016. This represents a gain of almost $1 billion when compared to the first half of fiscal year 2015.  The report, which covers the time period of October 1, 2015 through March 31, 2016, stated that the $2.77 billion consisted of approximately  $554.7 million in expected recoveries from audits and roughly $2.22 billion in expected recoveries from government investigations.  Some recoveries are expected as settlement amounts may have been agreed to in principle, but the parties are still working on the details of the settlement agreement.

The report further highlighted some of the larger False Claims Act settlements entered into between the OIG and companies during the first half of fiscal year 2016, including multimillion dollar settlements to resolve FCA allegations involving the Stark law and kickback allegations. In addition, the report detailed matters involving individuals receiving criminal sentences for their roles in conspiracies to commit health care fraud.

Despite the increase in expected fraud and abuse recoveries in the first half of fiscal year 2016, the report noted that the number of entities or individuals excluded from participating in federal healthcare programs dropped slightly from 1,732 exclusions in the first half of fiscal year 2015 to 1,662 exclusions in the same period this year. The reason for the majority of the exclusions related to criminal convictions involving federal healthcare programs, revocation of licenses, or patient abuse charges.

Current trends in FCA recoveries indicate that the government has an increased focus to investigate fraud and abuse matters involving organizations that have the means to pay large amounts to resolve such allegations. Coupled with the expected increase in the amount of civil penalties that may be assessed for each instance of a false claim, companies facing a government investigation of FCA allegations may face greater pressure to settle cases with the government.  In addition, individuals who are found to have committed fraud and abuse violations will likely continue to face significant civil penalties and may even face criminal charges and prison terms.

The OIG’s report can be found here: