DOJ Releases FY2024 FCA Statistics

This week DOJ released its annual report on FCA settlements and new cases, available here.  Although DOJ trumpeted a record-high number of qui tam cases filed (979) and a near record-high number of settlements and judgements (558), much of this increase in volume appears driven by the ongoing surge of Paycheck Protection Program cases.  Healthcare FCA cases remained stable in fiscal year 2024 (“FY2024”) as compared to the prior two years, and associated recoveries were slightly down.  Additional trends are outlined below.

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AG Nominee Bondi Commits to Defending FCA Constitutionality

Today the Senate Judiciary Committee held a confirmation hearing for Pam Bondi, President-elect Donald Trump’s nominee for Attorney General. During the hearing, Senator Chuck Grassley, a long-time proponent of whistleblowers in general and the FCA in particular, sought and received assurances from Bondi that under her leadership, vigorous FCA enforcement, including through qui tam cases, would continue.

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District Court Allows Summary Judgment on Medically Unnecessary and AKS Arguments, Joins Conversation on AKS Causation Standard

Judge Patti Saris in the District of Massachusetts recently granted a defense motion for summary judgment after concluding that relator failed to show that defendants knowingly submitted medically unnecessary tests or that any false claims were submitted as a result of independent contractor arrangements that allegedly violate the Anti-Kickback Statute (“AKS”).  See U.S. ex rel. Omni Healthcare v. MD Spine Solutions, 18-cv-12558 (D. Mass. Jan. 6, 2025).  With the latter ruling, Judge Saris joins a growing majority of courts holding that an AKS violation is only a false claim under the FCA if the claim would not have been submitted but for the kickback.

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District Court Briefing Request Highlights Loper Bright’s Potential Impact on FCA Litigation

A judge in the Southern District of West Virginia sua sponte requested briefing from the parties to address the impact of the Supreme Court’s decision in Loper Bright Enterprises v. Raimondo on an FCA case to “ensure that the Stark regulatory scheme is consistent with the power given by Congress and the statute as it was signed into law.” See United States ex rel. Liesa Kyer v. Thomas Health Sys., Inc., No. 2:20-cv-00732 (S.D. W. Va.). The order highlights the new opportunities Loper Bright has created for defendants in FCA cases, although the court ultimately dismissed the case on more straightforward 9(b) grounds.

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2025 Inflationary Adjustments to FCA Penalties Announced

The Department of Commerce has published the 2025 inflationary adjustments to civil monetary penalties (“CMP”) associated with False Claims Act (“FCA”) violations (see here). The adjusted penalties will go into effect January 15, 2025 and will be assessed for violations that occurred prior to the adjustment, but that are assessed after January 15, 2025.  The minimum False Claims Act penalty will increase from $13,946 to $14,308 per claim and the maximum penalty will increase from $27,894 to $28,619 per claim.

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Supreme Court Mulls the Scope of FCA Liability for Potential “Claims” Submitted to Private Entities Funded by Private Entities

On November 4, 2024, the Supreme Court heard oral argument in United States ex rel. Heath v. Wisconsin Bell. The question presented is whether reimbursement requests submitted to the private corporation administering the E-rate program are FCA “claims.” Under the statute’s definition of “claim,” the answer hinges on whether the Government “provides” the requested money. All funding for the program, established by Congress, comes from private contributions. Yet where private contributors incur debts owed to the corporation, the United States Treasury collects those debts and transmits the funds to the corporation. The Court’s questioning suggests that the Court will conclude that the Government “provides” at least the money that it disburses to the corporation. The Court, however, appeared reluctant to make any determination as to whether the Government “provides” the other money paid to the corporation—all private contributions paid directly to the private corporation.

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District Court Rules FCA Qui Tam Provision Unconstitutional

Yesterday evening Judge Kathryn Mizelle in the Middle District of Florida granted a defense motion for judgment on the pleadings and dismissed an FCA case after concluding that the FCA’s qui tam provision is unconstitutional.  See U.S. ex rel. Zafirov v. Fla. Medical Assoc. LLC, No. 19-cv-1236 (M.D. Fla. Sept. 30, 2024).

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DOJ Faces Pushback At First Circuit On Expansive Causation Standard for AKS-Based FCA Claims

On July 22, 2024, the First Circuit Court of Appeals heard oral argument on what the appropriate standard of causation is for AKS-based FCA claims—specifically, whether a “claim” under the FCA “result[s] from” a kickback only if the claim would not have included the items or services but for the kickback. The District of Massachusetts certified this issue for appellate review after adopting the but-for causation standard in United States v. Regeneron Pharma., Inc., 2023 WL 6296393 (D. Mass. Sept. 27, 2023), as we previously reported here. The panel was made up of Judges O. Rogeriee Thompson, William Kayatta, and Lara Montecalvo, and their questioning suggests some optimism for those advocating for the but-for standard.

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