Key Takeaways From DOJ’s Annual FCA Recoveries Press Release: FY 2021 Edition
February 9, 2022 I Sherrard Roe Blog I Christopher C. Sabis
We have made one more lap around the sun, and it is time for the Department of Justice’s (DOJ) annual press release flexing its False Claims Act (FCA) muscles and touting its fraud-fighting successes. Yes, yes, the excitement is palpable. The headline always shows a big number; this year, it is bigger than usual as DOJ took in $5.6 billion in total FCA settlements and judgments. But what can we really learn from DOJ’s victory lap this year?
- DOJ recovered over $5.6 billion using the FCA in FY 2021. DOJ touts this as the second-largest amount in FCA history, but let’s take a peek behind the number. It is up from $2.2 billion in FY 2020, one of DOJ’s lower totals in recent years. Maybe the dip and spike have more to do with a pandemic shutting the planet down for a year than any new trend in the offing. It is also worth noting that over $3 billion of the FY 2021 total came from two opioid-related resolutions, making this year’s increase seem more modest. What is more interesting is that over $5 billion, or approximately 89% of the FY 2021 recoveries, came from the healthcare industry, mostly from Medicare fraud. Healthcare continues to be DOJ’s favorite industry by a wide margin, with significantly less focus on other procurement fraud involving government grants and contracts.
- After reversing the trend last year, qui tam filings by whistleblowers dipped again, landing at 598 compared to FY 2020’s 672. Only 29%, or $1.6 billion, of DOJ’s FCA recoveries arose from qui tam cases brought by whistleblowers. This is a significant drop percentage-wise but is probably more due to the largest non-qui tam recoveries skewing the numbers than anything else.
- The largest FCA recoveries, once again, came from the pharmaceutical industry, with opioid-related settlements involving Indivior Solutions and Purdue Pharma paying over $3 billion between them
- DOJ’s stated healthcare priorities include opioids, kickbacks, managed care (Medicare Part C), and medically unnecessary services. Nothing new there. Managed care is under the gun due to allegations that insurance plans and healthcare providers are “manipulate[ing] the risk adjustment process by submitting unsupported diagnosis codes to make their patients appear sicker than they actually [are]. Sutter Health and Group Health Cooperative, among others, paid settlements on these types of allegations. And our own Middle District of Tennessee got a shout-out for its $11.2 million settlement with SavaSeniorCare LLC resolving allegations of medically unnecessary rehabilitation therapy services.
- Electronic health records (EHR) related fraud also appeared (again), with DOJ again touting its $18.25 million kickback settlement with athenahealth, Inc.
- While a smaller chunk of the overall FCA pool, non-healthcare procurement fraud matters still brought in about $500 million in recoveries, up about $100 million from last year. Although most COVID-19-related fraud matters involving measures like the Paycheck Protection Act (PPP) have been criminal in nature, the release did highlight small civil PPP resolutions with Sextant Marine Consulting LLC and an individual named Seth A. Bernstein, among others. DOJ also noted an increased emphasis on cybersecurity fraud going forward, stating that it “will pursue misrepresentations by companies in connection with the government’s acquisition of information technology, software, cloud-based storage and related services designed to protect highly-sensitive government information from cybersecurity threats and compromises.”
- DOJ also highlighted that it continues to hold individuals, not just corporations, accountable for FCA violations, citing resolutions involving both physicians and corporate executives
We continue to monitor developments in the FCA space. Subscribe to the blog for future updates. Contact the lawyers in our Government Compliance & Investigations or Healthcare groups with any questions or concerns.
Chris Sabis is a member of Sherrard Roe and a healthcare and procurement fraud lawyer specializing in Government Compliance and Investigations, Healthcare, and Litigation.
