Dear Readers:
Happy holidays and best wishes to you for 2019.
Happy holidays and best wishes to you for 2019.
Just in time for Christmas, the Civil Division of the U.S. Department of Justice ("DOJ") released its 2018 annual statistics for False Claims Act ("FCA") filings and cases for fiscal year 2018 (10/1/17 - 9/30/18). The DOJ's press release highlights DOJ settlements and recoveries, and I will not repeat them here. Rather, as I have done for the last several years, I wish to focus on a few of the highlights revealed by the statistics.
2018 was not a
banner year for DOJ and FCA cases. DOJ "obtained" $2.8 billion "in
settlements and judgments" from civil cases involving fraud and false claims
against the government, and of that amount, over $2.1 billion resulted from qui tams. That’s the lowest amount
“obtained” since
2009, when DOJ “only” recovered $2.4 billion.
2018 was also
not a banner year for qui tam relators
who recovered “only” $301 million in relator share awards, down 37% from last
year. This was the lowest amount recovered by relators in any single year since
2009.
767 FCA cases
were filed in 2018, down from 825 in 2017 and the second lowest year for FCA
filings since 2011. Last year, DOJ filed 122 "non-qui tam" or
direct-filed cases and qui tams accounted for 645 matters. DOJ does not say in which of the 645 cases it has
intervened, declined, or is still “investigating.” Note: DOJ apparently revised 2017’s
statistics: last
year it published statistics showing 125/674 direct filed and qui tam matters and this year’s
statistics now show 145/680 direct filed and qui tam matters for 2017.
Healthcare
related cases continue to predominate (almost 69%) all FCA cases filed: 506
healthcare FCA cases filed and $2.5 billion “obtained.” Direct-filed healthcare
cases continued to be up at 60, tied with 2008, for the second most number of
direct filed cases in a year since 1987. The record is 70 in 2016. Recoveries in
direct filed FCA cases were up dramatically to $568 million, up from $32
million in 2017 and the third best year since 1987. A large portion of the
healthcare FCA recoveries (almost 59%) is attributable to five cases: $625
million paid by AmerisourceBergen Corp., $210 million paid by United Therapeutics
Corp., $270 million by HealthCare Partners Holdings LLC, $216 million from
Health Management Associates, and $84.5 million by William Beaumont Hospital.
The "other"
category of FCA cases accounted for almost 28% of all FCA cases filed in 2018. That is down from 225 last year and is the
lowest overall since 2010 when 211 cases were filed.
The big news here is that recoveries were only $259 million, a dramatic
drop from the $106 billion last year and the lowest since 2010. Relator shares, not surprisingly, dropped as
well: $14.9 million, which is down 78% from the prior year and is the worst year
for relators in this category since 2008.
Department of Defense FCA
cases continued to be small: 47 or 6% of all FCA cases, and they accounted for $107
million recovered.
A few observations about 2018:
A few observations about 2018:
- Relator
generated qui tams continue to
hold strong in healthcare where 446 qui tams were filed. 2018 was the fifth best
year since 2010. Relator recoveries
in declined healthcare cases dropped from $445 million in 2017 to $80
million in 2018, with relator share awards in declined cases falling as well: $123
million in 2017 to $22 million in 2018. The $266 million in relator share awards in healthcare cases
overall was the lowest since 2010.
- The
relator share awards in the “other” category (non HHS, non DOD) fell
dramatically from $77 million in 2017 to $20.7 million in 2018. That is the lowest amount collected in
this category since 2008.
- Of
the $2.8 billion “obtained,” DOJ does not tell us how much it actually recovered
in cash as opposed to "judgments” in 2018 or any other year. For example, DOJ cites as an example a “judgment
totaling more than $114 million” that it obtained against three
individuals that allegedly paid kickbacks to two labs. However, the title of its press release
proclaims that it “recovered” $2.8 billion.
- DOJ’s
press release heralded its commitment to “holding individuals
accountable” in FCA cases. Several
examples are cited, including DOJ’s FCA settlement with Lance Armstrong
who agreed to pay $5 million. Given
where the government started in that
case with its demands, however, that settlement effectively was a win
for Armstrong. With
the new revisions to the Yates policy, it will be interesting to see
how that affects DOJ’s efforts to hold individuals accountable going forward.
Overall, a good year for DOJ
direct filed cases against healthcare defendants, and a bit of a decline in all
other areas.
Finally, a plea to DOJ and U.S. Attorneys: when are you
going to release the FCA statistics for each individual U.S. Attorney Office? And, why not provide a breakdown of all FCA settlements and judgments “obtained” for each district?
A. Brian Albritton
December 26, 2018
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