Feds False Claim Recoveries Top $5.6 Billion

After trailing off last year, False Claims Act (FCA) recoveries hit an eight-year high of $5.6 billion in FY 2021 which ended on September 30, 2021. And guess which industry furnished 90 percent of that money? If you guessed health care, you are absolutely correct. Here’s a high-level briefing of the year in FCA recoveries.

FY 2021 FCA Recoveries by the Numbers

The $5.6 billion that the U.S. Department of Justice (DOJ) garnered in settlements and judgments involving fraud and false claims last year is the second largest annual total in FCA history, exceeded only the $6.1 billion recovered in 2014. What makes these numbers especially eye popping is that they reverse what had been a long-term decline in DOJ FCA recoveries. Things bottomed out last year when the sequestration of enforcement funds and other pandemic pressures drove recoveries to a decade low of $2.25 billion. The other headline of the newly published DOJ report is the decline in FCA qui tam recoveries. Thus, of the $5,650,026,663 recovered in FY 2021, only $1,665,721,109 came from qui tam settlements and judgments. These figures stand in stark contrast to not only FY 2020 when qui tam actions accounted for $1,706,256,665 of the $2,252,083,099 recovered, but also longer-term trends where qui tam cases generate in the vicinity of 66 percent of total recoveries in a given year. Here’s a summary of five-year trends.

DOJ FCA Recoveries, FY 2017 to FY 2021

Fiscal Year	Non-Qui Tam Recoveries	Qui Tam Recoveries	Total Recoveries
2017	$280,997,308	$3,150,205,922	$3,431,203,229
2018	$767,115,453	$2,137,759,709	$2,904,875,162
2019	$852,782,697	$2,249,852,225	$3,102,634,923
2020	$585,426,434	$1,706,256,665	$2,252,083,099
2021	$3,984,299,544	$1,665,721,109	$5,650,026,663

Qui tam recoveries have been steadily trending down since peaking at $4.4 billion in 2014. The $1.66 billion recovered in 2021 is the lowest total since 2008. Moreover, there were only 598 new qui tam cases filed last year, as compared to 675 in FY 2020 and 638 in FY 2019. At the same time, the $3.98 billion in 2021 non-qui tam recoveries is, by far, the highest total since the DOJ began tracking these figures in 2006. To put things into perspective, the second highest non-qui tam recovery total in a year before this was $1.9 billion in 2016.

The Narrative

Of the $5.6 billion in FCA recoveries in FY 2021, $5 billion—90 percent—came from settlements and judgments involving labs, drug and medical device manufacturers, managed care providers, hospitals, pharmacies, hospice organizations, physicians, and others in health care. These totals don’t even count the billions of dollars more the DOJ helped the states recover from providers involved in Medicaid fraud.

Opioid Drugs

The lion’s share of FCA recoveries came from settlements of cases targeting manufacturers, prescribers, and distributors of prescription drugs for their role in fueling the opioid epidemic, including:

• The record $2.8 billion unsecured bankruptcy claim filed against Purdue Pharma for paying providers kickbacks to prescribe opioid drugs known to be unsafe;
• The $225 million paid by individual members of the Sackler family who were shareholders and board members of Purdue to settle charges of approving a new program to intensely market OxyContin to extreme, high-volume prescribers; and
• The $209 million settlement with Indivior, manufacturer of Suboxone, for allegedly promoting inappropriate prescriptions for the opioid addiction treatment drug.

Kickbacks & Unnecessary Medical Services

As in previous years, labs featured prominently in the 2021 FCA recoveries narrative, particularly in regard to kickbacks. Several of the year’s leading cases involved labs and pain clinics settling charges of paying physicians illegal kickbacks for referrals of urine drug tests (UDTs), including the $9 million paid by UDT lab owner Daniel McCollum for his role in a $140 million scam. The year also saw its share of cases of illegally billing Medicare and other federal health care programs for medically unnecessary services or services not rendered as billed. For example, a pair of Texas physicians and former co-owners of now-defunct Austin Pain Associates, paid $3.9 million to settle charges of knowingly ordering and billing Medicare for excessive and unnecessary UDTs for patients without any individualized assessment of clinical need. In July, Alere Inc. and Alere San Diego Inc. shelled out $38.75 million to resolve allegations of billing, and causing others to bill, for defective rapid point-of-care testing devices used by Medicare beneficiaries to monitor blood coagulation when taking anticoagulant drugs.