False Claims Act settlements result in a lesser return in fiscal year 2022

Penalties imposed for False Claims Act (FCA) infractions topped $2.2 billion in fiscal year 2022, less than half of what the Department of Justice (DOJ) attained the previous year.

The DOJ could not explain why the dollar amount of FCA recoveries declined during the fiscal year that ended September 30, 2022. According to agency statistics, the agency's return of $5.6 billion in FY2021 was the second-largest sum ever collected in a single year, while the FY2022 figure is the least since FY2008.

Despite the fact that 351 settlements and judgements were recorded in FY2022, the second largest amount in a single year, the reduction occurred.

“The large number of settlements and judgments this past year demonstrates that the False Claims Act remains one of the most important tools for ensuring that public funds are spent properly and advance the public interest,” said Brian Boynton, principal deputy assistant attorney general and head of the DOJ’s Civil Division, in the agency’s press release Tuesday.

When people or corporations deliberately bill government programmes, such as Medicare and Medicaid, or agencies for services that were never given or are associated with fraud, the FCA can be invoked. Under the legislation, the government can seek triple damages plus penalties.

Qui tam, or whistleblower, actions accounted for $1.9 billion of the total penalty in FY2022. Whistleblowers, who receive 15 percent to 30 percent of any recovery in a case, filed 652 FCA lawsuits in FY2022, the majority of which are still pending.

As in prior years, the healthcare industry recovered the lion's share of FCA money in FY2022, totaling more than $1.7 billion. Cases involved increasing prescription or service costs, paying bribes to providers, willfully submitting misleading information to meet requirements, and, for the first time, cyber fraud.

According to the DOJ, Comprehensive Health Services agreed to pay $930,000 in March to settle claims that it failed to secure the medical information of patients linked with the US Air Force and State Department.

In other notable cases, drug company Mallinckrodt agreed to pay $260 million in March to settle false claims and kickback allegations involving promotions for its multiple sclerosis drug Acthar, and Providence Health & Services Washington agreed to pay $22.7 million in April to settle allegations that it billed federal health programmes for unnecessary surgeries.

According to the DOJ, recoveries have reached more than $72 billion since 1986, when the FCA was tightened.

By fLEXI tEAM