FY 2023 Saw the Most FCA Settlements and Judgments Ever in a Single Year, with the Majority of Recovered Funds Paid by the Healthcare Industry

On February 22, 2024, Acting Associate Attorney General Benjamin C. Mizer and Civil Division Principal Deputy Assistant Attorney General Brian M. Boynton announced that settlements and judgments under the FCA exceeded $2.68 billion in fiscal year (“FY”) 2023.  DOJ and whistleblowers, further, were party to 543 FCA settlements and judgments, the most ever in a single year.  Detailed statistics on FCA recoveries from 1986 through FY 2023 are available here.

The 2023 FCA recovery statistics reveal important trends, including:

• More recovered in FCA settlements and judgments.  Settlements and judgments amounted to $2.68 billion in FY 2023, significantly above the $2.2 billion in FY 2022, but still well below the recent peak of $5.7 billion in FY 2021.

• Continued focus on the healthcare industry.  Of the $2.68 billion in settlements and judgments, $1.8 billion (~67%) related to matters involving the healthcare industry.
  • Summarizing the key drivers behind the healthcare recoveries, DOJ underscored alleged fraud related to the following topics, among others:
    • Medicare Advantage (Medicare Part C):
      • As an example, DOJ pointed to a $22.5 million settlement resolving allegations that an insurer knowingly submitted inaccurate diagnosis codes for Medicare Advantage plan enrollees.
    • Medically unnecessary services;
      • As an example, DOJ highlighted a $21.6 million settlement that resolved allegations that a former long-term care facility knowingly submitted claims for services performed by unlicensed and unauthorized students.
    • The Anti-Kickback Statute; and
      • DOJ emphasized, as examples, $45.4 million and $31.2 million settlements paid by electronic health record (“EHR”) vendors to resolve allegations that the vendors paid unlawful remuneration to induce recipients to recommend the vendors’ EHR technologies.
    • Cyber-fraud
      • DOJ touted, as part of its broader Cyber-Fraud Initiative, a settlement with a contractor that allegedly failed to secure personal information on a federally funded Florida children’s health insurance website.

• More recovered from qui tam actions that DOJ pursued.  In FY 2023, DOJ recovered $1.89 billion from qui tam actions in which it intervened or which it otherwise pursued.  That number reverses a consistent decline that began in FY 2017 and reached a nadir in FY 2022, at $803 million.  In declined qui tam actions, however, settlements and judgments in FY 2023 slumped to $442 million from $1.18 billion in FY 2022.
• More new FCA actions from both relators and DOJ.  The number of new qui tam actions jumped to 712 in FY 2023 (the third-highest yearly total ever), up from 658 in FY 2022.  And new FCA matters brought directly by DOJ surged to 500 in FY 2023 from 305 in FY 2022.  This spike was fueled by the 270 cases DOJ resolved relating to alleged misuse of Paycheck Protection Program loans.  Consistent with this flurry of activity, DOJ Civil Frauds issued a record 1,504 Civil Investigative Demands in FY 2023.
• Continued focus on private equity.  In conference remarks delivered yesterday, Principal Deputy Assistant Attorney General Boynton “emphasize[d] the department’s commitment to holding accountable third parties that cause the submission of false claims. These third parties can include private equity firms, among others.”  He further explained that a “source of influence on provider behavior that we are increasingly seeing are investors, such as private equity firms or venture capital firms,” and that “if an investor knowingly engages in conduct that causes the submission of false claims, they may subject themselves to liability.”

This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.