U.S. Department of Justice 2018 False Claims Act Statistics -- not a banner year for DOJ or Relators

Dear Readers:

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:

• 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

U.S. Department of Justice 2015 False Claims Act Statistics: A Great Year for Relators in Declined Qui Tam Cases

The Civil Division of the U.S. Department of Justice (DOJ) announced its False Claims Act (FCA) recoveries for fiscal year 2015 last week. Here is the DOJ's press release and its cumulative statistics for 1987 through 2015. The DOJ's statistics reflect that the overall recoveries were down from last year's high point and that the government and relators filed fewer FCA cases. 

The biggest take away from the 2015 figures is that relators are continuing to vigorously pursue qui tam cases in which the government has declined to intervene: 2015 was the best year ever for relator recoveries in declined qui tam cases. Moreover, 2015 was the first year in which the relators' share of awards from FCA cases in which the government declined to intervene exceeded that of qui tam cases in which the government intervened. The days are officially over when relators' counsel and relators dropped most of their qui tam cases when the government declined. Rather, these statistics show that relators' counsel are increasingly pursuing and obtaining recoveries in declined cases.

DOJ recovered $3.583 billion in FCA settlements and judgments in 2015, not including recoveries from cases "delegated" to the U.S. Attorneys' Offices.  

Regarding the $3.583 billion in total FCA recoveries for 2015, I observed the following:

• Total FCA recoveries were down 38% from the $5.781 billion recovered by DOJ last year; FY 2014  was the best year ever for FCA recoveries.

• $2.913 billion or 80% of DOJ's 2015 recoveries resulted from qui tam cases, both intervened and non-intervened/declined (herein "declined") cases.

• $1.149 billion or 32% came from 2015 recoveries in declined qui tam cases.

2015 was the best year ever for relator recoveries in qui tam cases in which the government declined to intervene. By comparison, the best year for recoveries in declined qui tam cases was 2011 in which relators recovered $173 million. In 2015, DOJ obtained more recoveries from declined qui tam cases than all the previous years added together: $1.149 billion in 2015 v. $1.006 billion in 1987-2014.

As has been the trend for almost every year since 1987, recoveries from qui tam cases exceeded non qui tam cases: $2.913 billion to $670,783,021.

Lowest Number of FCA Cases Filed Since 2010.

737 FCA cases and investigations were filed in FY 2015: 105 "direct filed" by DOJ/US Attorneys and relators filed 632 qui tams. 

• Qui tam cases filed in 2015 were also the lowest since 2010 when relators filed only 576 qui tams.

• 2015 FCA cases decreased 9% from the 810 FCA cases filed in FY 2014.

• 2015 qui tam cases decreased 11.48% over FY 2014's 714 filed qui tams.

Relator Share Awards Increased Especially in Declined Cases.

The big news for 2015 concerns relators' share awards. Relators had their best year ever in the amount of relators' share awards recovered: $597,610,533. The only previous year in which more than $500 million was awarded to relators was 2011.

• In FY 2014, relators' share awards in declined cases totaled $14,622,854 but that total grew in 2015 to $334,642,108 – a 2188% increase. Prior to 2015, the largest year for relators' share awards was 2011: $49,041,606.

• For the first time, the relators' share awards in declined cases, $334,642,108, exceeded relators' share awards in qui tam cases where the government intervened: $262,968,424. 

• In fact, the relators' share awards in declined cases for 2015 exceeded all previous years of relators' share awards put together since 1987: $202,530,697.

FCA Recoveries in Health Care Fraud Cases Continued to Lead. 

As in many years past, the largest portion of FCA recoveries arose from FCA cases alleging health care fraud against the federal government (e.g., Medicare, Tricare) and state Medicaid programs: in 2015, the DOJ received $1.965 billion in health care fraud recoveries form FCA cases. That total was down from $2.401 billion in 2014. 2015 had the smallest recovery in health care fraud FCA cases since 2009, when $1.632 billion was recovered.

• 60.79% of the 737 FCA cases/investigations initiated in 2015 related to health care fraud.

• 66.93 of all qui tams filed in 2015 related to health care fraud: 448/632.

• The $330,393,564 total of relators' share awards for 2015 represented 55.29% of the total amount of all relators' share awards in 2015, but that total was a decrease from last year in which relators received almost $356 million in awards in FCA health care cases.

• Relators' share awards in declined health care cases increased substantially: from $10,841,222 in 2014 to $131,047,572 in 2015, a 1108% increase!

FCA Recoveries Excluding Cases Arising from Health Care and Department of Defense Continue to Be High.

Excluding health care fraud and Department of Defense cases, the remaining category of FCA cases had another respectable year in 2015: 247 FCA cases and investigations, both non qui tam and qui tam, were filed. This represented only a slight decrease from FY 2014 when 256 cases/investigations were filed.

DOJ obtained $1.359 billion in settlements and judgments for this category in 2015. Here again, settlements in declined qui tam cases led with $647,516,850 recovered. Not surprisingly, the relators' share award in declined qui tam cases also was large: $201,678,887, which was an increase of 15562.7% over the relators' share awards in 2014: $1,287,632. The relators' share awards in 2015 for declined cases was more than 4 times more than the relators' share for intervened qui tams: $201,678,887 to $39,746,064. 

A. Brian Albritton
December 6, 2015

False Claims Act and Qui Tam DOJ Statistics for 2012

The Civil Division of the U.S. Department of Justice has released the False Claims Act/Qui Tam statistics for FY 2012, which ended September 30, 2012. They can be found here. As in previous years, the overwhelming number of all cases filed pursuant to the False Claims Act were filed by qui tam relators and a great majority of the recoveries came from the health care area.

For 2012 False Claims Act (FCA) and Qui Tam (QT) matters, the DOJ statistics reveal the following:

• 782 FCA/QT new referrals, investigations, and qui tam matters. This number has increased slowly over the last two years as it was 773 in 2011 and 715 in 2010. QT actions continue to drive the overwhelming majority of new matters: almost 83% or 647 of the "new" matters were QT's.

• Total FCA/QT combined recoveries (settlements and judgments) were $4,959,333,498. Of that total:
• Almost $1.605 billion (32%) recovered in FCA cases filed by the government;
• Approximately $3.325 billion (67%) recovered in QT cases where government intervened;
• $29.387 million (.059%) recovered in QT cases where government did not intervene; and
• Total relator share awards: nearly $431 million (8.7% of total recoveries and judgments).

The DOJ divides the FCA/QT new matters and recoveries into three major categories: statistics related to Health and Human Services, Department of Defense, and Other. Not surprisingly, new matters and recoveries relating to health and human services (e.g., Medicare, Medicaid, VA, Tricare) continued to maintain a commanding lead in 2012:

•  436 new health-care related matters, of which 412 were QT cases
• Over $3 billion (61%) in total health care related recoveries, almost $2.5 billion in QT cases; and
• Over $284 million in relator share awards.

• 69 new defense related matters, of which 57 were QTs
• Almost $167 million (3%) in total defense related recoveries, only $2 million were non-QTs; and
• Over $19 million in relator share awards.

A. Brian Albritton
December 27, 2012

False Claims Act Investigations of Non-Evidence Based ICD Procedures

News has been coming out about what is reported to be the U.S. Department of Justice's latest False Claims Act initiative:  "the national false claims investigation of Medicare billing for implantable cardiac defibrillator (ICD) procedures."  According to the National Heart Lung and Blood Institute, ICDs are small devices implanted  in the chest or abdomen that are used to treat irregular heart beats by using electrical pulses or shocks to bring the heart back to a normal rhythm.  A study published early last year by JAMA, the Journal of the American Medical Association, examined an enormous patient sample where implantable cardiac defibrillators were used.  Out of over 100,000 patients who received such devices, the article found that 22.5% of those patients received ICD devices even though they did not meet "evidence-based criteria for implantation:"  what the authors called "non-evidence based" ICD procedures.  Patients who  received non-evidence based ICDs, the study found, had a significantly higher rate of in-hospital death and complications.

In an article reprinted at www.Forbes.com (and apparently several other cites as well), "Feds Turn corner in ICD Investigation; Hospital Liability in Divided Into Categories," its author, Larry Husten, writes that DOJ "is apparently about to take a big step forward in its national false claims investigation of Medicare billing for implantable cardiac defibrillator (ICD) procedures" and whether such ICD procedures are medically necessary.  "DOJ, reports Husten, "now has a blueprint for determining hospital liability" under the False Claims Act.  According to Husten, Medicare will normally reimburse the use of ICDs, but a number of the "covered indications" for when such devices may be used have "timing requirements."  "Medicare," writes Husten, "won’t pay for a patient’s ICD implant within 40 days of an acute myocardial infarction (MI) or within three months of a coronary artery bypass graft (CABG) or percutaneous transluminal coronary angioplasty (PTCA). . . . . The idea is to first give patients time to recover from the heart attack to determine whether the patient really is at elevated risk for cardiac arrest."  Husten writes that there are exceptions to when such devices can be implanted notwithstanding these timing requirements; however, he quotes an anonymous source who says that "it doesn’t look like the government will go easy when hospitals billed in violation of the timing requirement in other circumstances."

The press attention to this new initiative appears to be prompted in part by the  Hospital Corporation of America ("HCA")  recent disclosure that it provided information to the Civil Division of the U.S. Attorney's Office for the Southern District of Florida about the "the medical necessity of interventional cardiology services provided at about 10 HCA hospitals, mostly in Florida."

In a recent article, "Hospitals face hefty False Claims penalties over defibrillator cases," on the investigation of ICD usage by Joe Carlson of Modern Healthcare.com, he writes that for the "past two years" DOJ has been conducting a "patient-by-patient investigation into thousands of implantable cardioverter defibrillators . . . for Medicare beneficiaries between 2003 and 2010 at hospitals across the country. . . . .  More than 100 U.S. hospitals are believed to have received requests for records on their implanted defibrillators, with the first round going out in March 2010."

I think there has been some question as to whether DOJ can really pursue such large scale "medical necessity cases" as involved here with ICDs.  Carlson, for example quotes one attorney who rightly points out that "the government would have to be prepared to show that a hospital acted with intent to defraud, or with deliberate indifference or reckless disregard for the CMS rules, in order for False Claims penalties to come into play."  In certain False Claims Act cases based on alleged statistical abnormalities, however, I have not found that the government was prepared to show either fraud or deliberative indifference.  Rather, the government draws the inference that fraud or deliberate indifference occurred based on the statistical abnormality alone, and hospitals faced with the prospect of a False Claims Act suit, often settle rather than fight the issue of medical necessity.   For example, in the pneumonia up-coding cases, hospitals were accused of overusing higher reimbursable diagnostic codes for a certain type of pneumonia.  Rather than fight these cases, hospitals settled in droves, even in many instances where there was substantial evidence to support their use of such codes.  Another example can be found in the recent DOJ kyphoplasty settlements.  In those cases, DOJ accused the hospitals of admitting  too many kyphoplasty patients for a one day stay and argued that the patients should have been observed instead.  Here again, hospitals settled, often protesting their innocence.    My point is medical necessity cases are much easier to bring when there is a gross or large statistical aberration in the procedure at issue by the hospital or medical provider:  the government does not need evidence of fraud or recklessness beyond the aberration itself in order to drive settlements.

A. Brian Albritton
August 19, 2012

DOJ Publishes Summary of Statistics on False Claims Act and Qui Tams

The Civil Division of the U.S. Department of Justice has published a summary of statistics relating to the False Claims Act and qui tams for the period of 1987-2011.  They are quite interesting, and include the following:

1.  A chart showing the False Claims Act matters broken down between non qui tam and qui tam; the totals for each year for settlements and judgments for qui tam/non qui tam; for qui tams, along with a break down of the total amounts where the government intervened in the qui tam and the total settlements where the government declined to intervene; and the non qui tam total settlements; and a yearly summary of the relator share awards, broken down by whether the government intervened and where it declined.

2.  There are three other charts which break out the False Claims Act/Qui Tams numbers, settlement and judgments, and relator share awards by client agent:  (a) a chart for Health and Human Services showing the numbers relating to health care fraud; (b) a chart for Department of Defense; and (c) "other" relating to False Claims Act/Qui Tams unrelated to Health & Human Services and Department of Defense.

As has been reported elsewhere, 2011 was a good year for False Claims Act cases:  there were over 762 new matters (referrals, investigations, and qui tam actions); total settlements of $3,029 billion, of which almost $2.8 billion related to qui tams.  Relators share awards totaled $532 million.