On January 9, the United States Department of Justice (“DOJ”) announced its statistics on federal False Claims Act cases for FY 2019. In a lengthy press release, the DOJ reported more than $3 billion in settlements and judgments from civil cases involving fraud and false claims against the government. Of this total, the DOJ reported that $2.6 billion – approximately 87% — derived from matters that involved the health care industry.
The data released by the DOJ confirms that this is the tenth consecutive year that the government’s civil health care fraud settlements and judgments have exceeded $2 billion. The FY 2019 total was up approximately $71 million from FY 2018, and was $461 million more than FY 2017. From this data, it is clear that robust civil enforcement remains a critical part of the legal landscape for all segments of the health care industry. A closer look at the statistics, though, reveals a number of other key takeaways:
- Enforcement actions against pharmaceutical companies continue to be a significant component of the DOJ’s strategy. The press release reported that over $624 million was recovered from seven drug manufacturers in FY 2019 alone.
- While the total value of settlements and judgments in health care industry cases rose between FY 2017 and FY 2019, there has been a downward trend over the past three to four years in both the number of new qui tam cases as well as the number of qui tam matters where the government has intervened or otherwise pursued recovery. This trend is visible both in the overall statistics, not just in cases relating to the health care industry.
- In FY 2016, for example, the government obtained $2.5 billion in settlements and judgments in health care qui tam cases where it intervened. In FY 2019, that figure was down to $1.6 billion – a substantial decline. By contrast in FY 2016 the government only recovered $75 million in matters where it had declined. That number jumped to $272 million last year. The $272 million figure was the third largest annual recovery in declined cases, with the only other two larger years also having occurred since 2015.
- Settlements and judgments in non qui tam health care cases have shown a notable upward trend over the past three years. From FY 2013 – FY 2017, the DOJ collected just over $440 million from non qui tam cases relating to the health care industry. In each of the last two years, the government collected substantially more than that — $568 million in FY 2018 and $695 million in FY 2019. Overall, the DOJ has reported that more than a quarter of the settlements and judgments in False Claims Act cases in FY 2019 came from non qui tam matters.
Combined with the downward trend in new qui tam matters, this data suggests that the government’s annual $3 billion recovery in False Claims Act cases is becoming more and more dispersed across different types of investigations and not limited to whistleblower matters. This is consistent with the government’s increasing use of its statutory authority to dismiss qui tam matters pursuant to the “Granston Memo.”
The stability of total recovery amounts year over year makes clear that, whatever the origin, the risk of costly investigations and costlier litigation for companies in the health care space remains substantial.