False Claims Act settlements net lower return in FY2022

The DOJ didn’t give a reason for the decreased dollar amount of FCA recoveries during the fiscal year, which ended Sept. 30, 2022. The agency’s return of $5.6 billion in FY2021 was its second-largest amount ever collected in one year, while the FY2022 amount is the smallest since FY2008, according to agency records.

The drop came despite 351 settlements and judgments being recorded in FY2022, the second highest such number in a single year.

“The large number of settlements and judgments this past year demonstrates that the False Claims Act remains one of the most important tools for ensuring that public funds are spent properly and advance the public interest,” said Brian Boynton, principal deputy assistant attorney general and head of the DOJ’s Civil Division, in the agency’s press release Tuesday.

The FCA can be applied when individuals or entities knowingly bill government programs, such as Medicare and Medicaid, or agencies for services never provided or that are connected to fraud. The government can seek triple damages plus penalties under the law.

Qui tam, or whistleblower, actions led to $1.9 billion of the penalty total in FY2022. Whistleblowers, who receive 15 percent to 30 percent of the federal government’s share of any recovery in a case, filed 652 FCA lawsuits in FY2022, most of which are still pending.

Consistent with previous years, the healthcare industry made up the largest share of FCA dollars recovered in FY2022 at more than $1.7 billion. Cases centered on inflating prices for drugs or services; paying kickbacks to providers; knowingly submitting inaccurate information to meet requirements called for; and for the first time, cyber fraud.

Comprehensive Health Services in March agreed to pay $930,000 to settle allegations it did not secure the medical records of patients affiliated with the U.S. Air Force and State Department, the DOJ said.

Other notable cases included drug company Mallinckrodt agreeing to pay $260 million in March to resolve false claims and kickback allegations involving promotions for its multiple sclerosis drug Acthar and Providence Health & Services Washington agreeing to pay $22.7 million in April to settle allegations it billed federal health programs for unnecessary surgeries.

Since 1986, when the FCA was strengthened, recoveries have totaled more than $72 billion, the DOJ said.