Justice Department Recovers More Than $3.7 Billion from FCA Cases in Fiscal Year 2017

By on December 28, 2017

On December 21, the US Department of Justice (DOJ) obtained more than $3.7 billion in settlements and judgments from civil cases involving fraud and false claims against the government in the fiscal year ending Sept. 30, 2017. Recoveries since 1986, when Congress substantially amended the civil False Claims Act (FCA), now total more than $56 billion.

Of the $3.7 billion in settlements and judgments, $2.4 billion involved the health care industry, including drug companies, hospitals, pharmacies, laboratories and physicians. This is the eighth consecutive year that the department’s civil health care fraud settlements and judgments have exceeded $2 billion. In addition to health care, the False Claims Act serves as the government’s primary avenue to civilly pursue government funds and property under other government programs and contracts, such as defense and national security, food safety and inspection, federally insured loans and mortgages, highway funds, small business contracts, agricultural subsidies, disaster assistance and import tariffs.

These statistics show how relator-driven the government’s FCA practice has become. DOJ notes that, of the $3.7 billion in settlements and judgments in fiscal year 2017, $3.4 billion related to lawsuits filed under the qui tam provisions of the False Claims Act. During the same period, the government paid out $392 million to relators.

Also, the statistics show the large volume of newly filed cases each year. 669 qui tam suits filed this past year—an average of more than 12 new cases every week. This is the 6th consecutive year in which more than 600 cases were filed.

Finally, the announcement is noteworthy as apparent confirmation of the continued relevance of the so-called “Yates Memo” by having a subsection entitled “Individual Accountability.” The department stated that, in some cases, it obtained settlements in which individual owners and executives of private corporations agreed to be held jointly and severally liable for settlement payments with their corporations, such as three of the founders of eClinicalWorks and the owner of Life Care Centers of America. In other cases, DOJ pursued separate settlements with individuals, obtaining more than $60 million in these cases, including with three other eClinicalWorks employees and with individual physicians related to improper billing allegations in their practices.

The link to DOJ’s press release is available here.

Tony Maida
Tony Maida counsels health care and life sciences clients on government investigations, regulatory compliance and compliance program development. Having served as a government official, Tony has extensive experience in health care fraud and abuse and compliance issues, including the federal and state Anti-Kickback and Stark Laws and Medicare and Medicaid coverage and payment rules. He represents clients in False Claims Act (FCA) qui tam matters, government audits, civil monetary penalty and exclusion investigations, and Centers for Medicare and Medicaid Services (CMS) suspension, and revocation actions, negotiating and implementing corporate integrity agreements, and making government self-disclosures. Read Tony Maida's full bio.