Wednesday, December 14, 2016

U.S. Department of Justice 2016 False Claims Act Statistics: Another Banner Year for DOJ and Back-to-Normal for Relators in Declined Cases

The Civil Division of the U.S. Department of Justice (DOJ) late today announced its False Claims Act recovery statistics and highlights for fiscal year 2016.  Here is DOJ's press release, its cumulative statistics for 1987 through 2016, and DOJ's "Fact Sheet" Memo summarizing and extolling the significant False Claims Act settlements and judgments of the Obama administration for 2009 - 2016.

2016 was another banner year for the False Claims Act enforcement:  the third best ever with $4.7 billion in total FCA settlements/judgments.  A few observations regarding the DOJ's 2016 statistics:

  • 2016 was DOJ's best year ever for recoveries in non-qui tam FCA cases, i.e. cases in which there was no relator and were direct-filed by DOJ.  In 2016, DOJ recovered $1.856 billion, more than double last year's recovery in DOJ initiated cases, and about10% better than its best previous year in 2014.
  • Relator settlements/judgments and relator awards in those FCA cases where the government declined to intervene were down dramatically from last year's "best ever" recovery.  In 2015, relators recovered $1.174 billion in government declined cases. By contrast, in 2016, relators recovered almost $105 million in declined qui tam, down 91%. In turn, relator share awards in declined cases fell from $336 million in 2015 to $28 millon in 2016, a 92% decrease.
  • In 2016 relator share awards for all cases, both intervened and declined cases combined, were down nearly 23%, from $667 million in 2015 to $519 million in 2016.
  • FCA "new matters" were up in 2016 for both DOJ direct filed cases and qui tams. Relators filed 702 new qui tams, up from 639 in 2015: almost a 10% increase. 
  • DOJ direct-filed claims rose from 110 in 2015 to 143 in 2016, almost 23%.  This was the third best year for direct-filed cases since 1997: DOJ filed 144 and 161 direct-file cases in 2012 and 2008 respectively.
  • Healthcare related FCA cases continue to lead the way in categories of FCA cases and recoveries: 
    • Out of the $4.7 billion total FCA settlements and judgments, $2.597 billion was attributable to health care related cases, almost 55%.
    • DOJ reports that 2016 is the 7th consecutive year that civil healthcare fraud recoveries exceeded $2 billion.
    • Of the 702 qui tams filed, 501 or 71% were healthcare related.  
    • Recoveries from health care qui tams account for $2.427 billion or 93% of the $2.597 billion in health care settlements/recoveries.
    • Relators were awarded $450 million in relator share awards in healthcare cases, up roughly 14% from the year before.
    • As outlined in DOJ's press release, a large portion of the overall healthcare related settlements came from a handful of big settlements: $784.6 million paid by Wyeth and Pfizer; $390 millon paid by Novartis; $244.2 million paid by Tenet Healthcare Corp., $260 million paid by Millennium Health; and $125 million paid by RehabCare Group/Kindred Healthcare.
  • Department of Defense (DOD) related FCA cases, both direct-filed and qui tams, continued their longtime trend downward. Relators filed 31 DOD related qui tams, the lowest number since since1989. Last year, DOJ set the record for the lowest number of direct-filed DOD related FCA cases: only 7 filed. This year, DOJ filed 8.
  • In FCA cases excluding health care and DOD, DOJ had its second best year of recoveries: $2.041 billion. The overall best year in this category was 2014 when DOJ recovered $3.3 billion.
    • The largest portion of recoveries in this category, $1.698 billion, is attributed to DOJ direct-file cases. Recoveries from qui tams, both intervened and declined cases, was $343 million --down nearly 64% from $936 million recovered from these qui tams in 2015.
    • FCA cases relating to housing and mortgage fraud accounted for $1.6 billion in recoveries, with two large settlements standing out: a $1.2 billion settlement with Wells Fargo and a $113 million settlement with Freedom Mortgage.
A. Brian Albritton
December 14, 2016

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