On February 1, 2022, the United States Department of Justice (DOJ) announced that it had recovered $5.6 billion from False Claims Act (FCA) Cases during fiscal year 2021. Each year, the DOJ publishes statistics about its recoveries under the FCA and the number of new FCA matters that were filed during the prior year. These FCA statistics provide useful information and offer a window in the DOJ’s enforcement activity and its reliance on private whistleblowers (often called “relators”) who bring FCA cases forward and help the DOJ recover significant sums of money.
The relatively low $2.2 billion in FCA recoveries from 2020 did not accurately reflect on the otherwise strong year of enforcement by the DOJ. The timeframe used to compile the FCA statistics, which ran through September 30, 2020, excluded the DOJ’s massive $2.8 billion settlement with Purdue Pharma LP, which occurred just weeks later on October 21, 2020. As expected, this settlement is now reflected in the 2021 totals, surging the total recoveries to the second largest amount ever recorded and the largest since 2014.
Recoveries in 2020 revealed a clear shift towards the Government bringing its own enforcement actions, those which are not based on whistleblower lawsuits. Because the FCA allows a private whistleblower to bring a FCA action on behalf of the United States, the year-end statistics distinguish the number of new matters and total recoveries that stem from cases that originate from DOJ (the “non qui tam” matters) and those based on relator lawsuits (the “qui tam” matters). The Department has continued to exercise its authority to seek dismissal of meritless FCA whistleblower cases under the Granston Memo. The number of dismissals in the years since the memo was passed have more than doubled as compared to the previous thirty years, with the Department citing a need to conserve resources.
During 2021, the DOJ’s trend of driving FCA recoveries has continued partially driven by a decrease in the number of whistleblower FCA lawsuits this year. The number of new qui tam actions decreased significantly from last year to 598, the lowest number in more than a decade. While the number of new non qui tam actions filed by the DOJ dipped to 203, this is still the second largest number since the mid-1990s. However, the general trend is clear with the percentage of qui tam cases decreasing nearly ten percent over the last decade to 74% of all FCA actions. It is also possible that the shift in dismissal policy and efforts under the Granston Memo have contributed to the slight decrease in whistleblower complaints from last year, when many expected an increase in complaints resulting from the impacts of the COVID pandemic. Overall, this continuation reinforces the DOJ’s goals in charting and pursing its own enforcement priorities, rather than taking its cues from relators.
Unsurprisingly, the largest source of FCA recoveries was health care, with $5 billion from the health care industry alone. The FCA, which was originally enacted during the Civil War following concerns of wartime procurement fraud, is today the primary statutory enforcement mechanism used by the DOJ in cases of health care fraud. Health care FCA enforcement is likely to continue to comprise the majority of FCA recoveries moving forward, as additional areas of the industry develop and therefore create a potential for fraud.
The DOJ made an extremely strong showing of recoveries in 2021, partially due to the significant effort by Government employees in 2020 concurrent with the shift to virtual practice for the first time in the Department’s history. Pending efforts of Congress to amend and strengthen the FCA along with the continued development of the health care industry indicate that the trend of high recoveries is likely to continue going forward.
