New False Claims Act Stats Present Bounce in DOJ-Pushed Investigations

The Division of Justice’s (DOJ) annual False Claims Act (FCA) press launch revealed that it elevated self-initiated investigations for the federal fiscal 12 months ending September 30, 2023, by 1.5 instances over the prior 12 months. The DOJ additionally touted its accomplishments in FCA enforcement for the federal fiscal 12 months — a file 12 months for the DOJ. The statistics supplied within the DOJ’s February 22, 2024 Press Launch reveal the DOJ’s plans for 2024 and past. 

In 2023, the DOJ obtained 543 settlements and judgments — the very best quantity in a single 12 months and a marked improve from 2022. The DOJ’s whole recoveries of practically $2.7 billion additionally elevated from 2022, though these recoveries are decrease than a number of prior years. 

Looking forward to 2024, we count on the next traits:

• Additional improve of DOJ-initiated investigations
• Lively FCA enforcement
• Continued deal with well being care, cybersecurity, and personal fairness

FCA Enforcement Stays Lively

There isn’t a signal of slowdown in FCA enforcement. “The False Claims Act stays one in every of our most essential instruments for rooting out fraud, making certain that public funds are spent correctly, and safeguarding important authorities packages,” the DOJ said. Past its file variety of settlements and judgments in 2023, the DOJ pledged much more FCA enforcement exercise in 2024. In his remarks, Civil Division Principal Deputy Assistant Legal professional Normal Brian M. Boynton mentioned that, in 2023, the DOJ’s Fraud Part issued a file quantity (1,504) of Civil Investigative Calls for (CIDs), that are a key device the DOJ makes use of to acquire paperwork, interrogatory solutions, and testimony in its investigation of FCA instances earlier than bringing or intervening in fits. 

Well being care fraud continued once more to be the main supply of the DOJ’s False Claims Act settlements and judgments in 2023. The DOJ recovered over $1.8 billion associated to well being care business issues, together with managed care suppliers, hospitals, pharmacies, laboratories, long-term acute care amenities, and physicians. The DOJ’s recoveries in 2023 have been additionally attributable to its recoveries associated to procurement fraud, pandemic aid packages, and cybersecurity necessities in authorities contracts and grants. 

Document Variety of DOJ-Initiated Investigations

As forecast earlier than, the DOJ is extra dedicated than ever to constructing instances itself moderately than relying solely on whistleblower (qui tam) fits filed by relators. The DOJ has continued to extend its self-initiated investigations, with a considerable soar from 305 issues in 2022 to 500 new issues in 2023.   

This improve in government-initiated issues is a vital shift within the DOJ’s techniques. This isn’t to say that the DOJ is abandoning qui tams — the 712 qui tam initiated instances in 2023 was the third highest ever. However this uptick partially displays DOJ and companion company funding in allocating sources to information mining. Use of knowledge analytics — particularly on well being care claims information — continues to be a number one focus. 

The spike in government-led issues additionally displays elevated sharing of data throughout federal companies. The deal with misuse of COVID-19 associated funds is one instance of this, as interagency process forces shared information to uncover wrongdoing. For instance, the DOJ labored with the U.S. Small Enterprise Administration to pursue improper funds underneath the Paycheck Safety Program (PPP). In 2023, the DOJ resolved roughly 270 False Claims Act issues in reference to the improper use of PPP funds. 

Priorities for 2024

Well being Care. The well being care business stays the main focus of False Claims Act enforcement. The DOJ continues to pursue instances alleging false claims within the Medicare Benefit (Half C) program, equivalent to claims involving unsupported diagnoses. The DOJ’s press launch referred to as this an space of “important significance,” as Medicare Benefit is now the biggest part of Medicare. The DOJ may also proceed to deal with these areas:

• Claims for medically pointless providers
• Well being care suppliers, pharmaceutical corporations, and different entities contributing to the opioid disaster
• Enforcement of the Anti-Kickback Statute
• Claims associated to ancillary providers, equivalent to laboratories, diagnostic, distant monitoring, and DME corporations

Cybersecurity. In his dwell remarks throughout the 2024 Federal Bar Affiliation Qui Tam Convention, Boynton began by highlighting the DOJ’s Civil Cyber-Fraud Initiative. The Civil Cyber-Fraud Initiative, which was initially introduced in October 2021, makes use of the False Claims Act to police cybersecurity compliance by authorities contractors and grantees by holding them accountable once they knowingly violate relevant cybersecurity necessities. Though the DOJ’s Civil Cyber-Fraud Initiative has yielded solely a small portion of the DOJ’s False Claims Act instances up to now, Boynton pledged that extra instances are coming in 2024 and past. Firms and contractors that work with the federal government mustn’t neglect the federal government’s cyber safety necessities. 

Personal Fairness. Personal fairness funds are additionally within the DOJ’s crosshairs. Boynton particularly referred to as out personal fairness funds for example of a “third-party entity” who could also be topic to False Claims Act enforcement. Boynton warned that, even when a personal fairness fund doesn’t immediately submit claims to the federal government, the fund may nonetheless face FCA enforcement if it takes steps to affect or trigger the submission of a false declare by entities they management. This focus may lead the DOJ to asserting unchartered theories of legal responsibility which can be value monitoring fastidiously. We count on 2024 to be an energetic 12 months for False Claims Act enforcement, with the well being care business on the forefront of DOJ-initiated investigations.