On February 1, the Department of Justice released the statistics for its False Claims Act enforcement efforts for Fiscal Year 2021.  The headline for the announcement reads, “Justice Department’s False Claims Act Settlements and Judgments Exceed $5.6 Billion in Fiscal Year 2021.”  The press release touts that the Department’s efforts resulted in “the second largest annual total in False Claims Act history, and the largest since 2014.”  The Department highlighted that over $5 billion of the funds recovered stemmed from investigations involving the healthcare industry.  The press release further noted that over $1.6 billion was recovered as a result of qui tam lawsuits filed by relators with $238 million being paid out to those whistleblowers.  

Despite the positive tone of the press release, a review of the statistics themselves yields some interesting insights.  Most notable is the total $5.6 billion in recovery the DOJ touts in the press release.  While the total recovery does, in fact, add up to $5.6 billion, $2.8 billion of the total comes from the massive opioid settlement with Purdue Pharma, which occurred in October 2020 – one month into the 2021 fiscal year and during the Trump administration rather than the Biden administration.  That settlement was the result of years of investigation, and the settlement’s inclusion in the Fiscal Year 2021 total skews the statistics.  The inclusion of the Purdue Pharma settlement is proper given the timing of the settlement, but if the settlement is removed from the statistics, the total False Claims Act recoveries realized during the fiscal year was only $2.8 billion – the lowest total since Fiscal Year 2009, outside of the COVID-impacted year of 2020.

Further digging into the statistics reveals a decline in qui tam complaints and recoveries.  While the Department’s press release applauds $1.6 billion in total recoveries from qui tam lawsuits, that is actually the lowest total qui tam recovery since 2008.  The total recovered from qui tam suits in which the government intervened was also the lowest since 2008.  Further, 598 qui tam complaints were filed during Fiscal Year 2021 – 77 fewer than 2020 and the lowest number of qui tam suits filed by relators since 2010.  Additionally, the $238 million paid out to relators is the lowest total payout since 2008.  So, while the Department advertises this as a banner year for False Claims Act recoveries, the underlying statistics paint a slightly different picture.

As in previous years, the overwhelming majority of the False Claims Act recoveries stem from health care fraud – $5.1 billion of the $5.6 billion total.  $120 million of the remainder of the recoveries stem from False Claims Act investigations involving defense contractors.  The Department’s press release highlighted recoveries stemming from COVID-19 fraud, investigations that are expected to continue over the next few years.  The press release further noted FCA recoveries in the energy, education, and lending sectors.  The Department also specifically noted its focus on individual accountability, including recoveries from individual members of the Sackler family – owners of Purdue Pharma.

Given the continued prevalence of healthcare fraud investigations and the wide range of healthcare issues upon which DOJ focuses its enforcement efforts, it is more important than ever that those operating in the healthcare industry implement effective compliance programs.  But if served with a DOJ subpoena or CID, those companies need to engage attorneys with experience in healthcare fraud investigations.

The attorneys at Chilivis Grubman represent clients of all types and sizes in connection with False Claims Act investigations and qui tam litigation.  If you need assistance with such a matter, please contact us today.