On Jan. 15, 2025, the U.S. Department of Justice (DOJ) announced False Claims Act (FCA) settlements and judgments exceeded $2.9 billion in the fiscal year (FY) ending Sept. 30, 2024. According to the DOJ, the government and whistleblowers were party to 558 settlements and judgments, while whistleblowers filed 979 qui tam lawsuits, the highest number ever filed in a single year.

Recoveries in whistleblower lawsuits totaled more than $2.4 billion, comprising around 83 percent of all FCA recoveries in FY 2024. 

In comparison, FY 2023 settlements and judgments totaled just $2.68 billion based on 543 settlements and judgments. Approximately $2.3 billion of that was derived from whistleblower lawsuits – a number just shy of FY 2024’s.

Matters pertaining to the healthcare industry comprised the largest portion of FCA FY 2024 settlements and judgments. Recoveries for healthcare-related matters totaled over $1.67 billion, making up around 58 percent of all recoveries in FY 2024. Notably, this portion marks a slight decrease from FY 2023’s healthcare-related recoveries, which totaled $1.8 billion (approximately 68 percent of total FCA settlements and judgments). These matters involved a variety of healthcare defendants, including managed care providers, hospitals, clinics, pharmacies, pharmaceutical companies, laboratories, and physicians.

Enforcement Priorities

In conjunction with its release of FCA enforcement data, the DOJ highlighted the opioid epidemic, unnecessary services, substandard care, Medicare Advantage, unlawful kickbacks, Stark Law violations, and COVID-19 related fraud as specific enforcement priorities.

Illustrating these priorities, the most notable FCA recoveries from the past year include:

• Opioid Epidemic: A now-bankrupt pharmaceutical company agreed the United States retained a claim in the bankruptcy of $475.6 million related to allegations of marketing an opioid drug to high-volume prescribers, including prescribers that the company knew were prescribing the opioid drug for non-medically accepted uses.
• Unnecessary Services and Substandard Care: A healthcare system and 12 affiliated skilled nursing facilities agreed to pay $21.3 million to resolve allegations that they knowingly billed federal healthcare programs for therapy services that were unreasonable, unnecessary or unskilled, or did not occur as billed.
• Medicare Advantage Matters: A primary care chain paid $60 million to resolve allegations that it paid kickbacks to third-party insurance agents in exchange for recruiting seniors to primary care clinics.
• Unlawful Kickbacks and Stark Law Violations: A biopharmaceutical research service provider agreed to pay over $5 million to resolve allegations that it made millions of dollars of commission payments to independent-contractor marketers to induce the marketers to recommend providers refer clinical laboratory orders to the company.
• COVID-19-Related Fraud: A Georgia laboratory owner and the clinical laboratory he owned paid $14.3 million to resolve allegations that they paid kickbacks to independent contractor sales representatives to recommend respiratory pathogen panel tests to senior communities interested only in COVID-19 tests.

The DOJ also reported other notable healthcare fraud enforcement actions from the past year, including a national pharmacy chain’s multimillion-dollar settlement to resolve allegations related to failures to report drug rebates to the Medicare program.

Takeaways

Healthcare fraud continues to be a leading focus of the DOJ’s enforcement efforts. This continued focus reflects the government’s commitment to addressing fraudulent activities across various sectors of the healthcare industry. The record-breaking number of qui tams demonstrates the willingness of whistleblowers to pursue FCA claims without the government’s assistance. To minimize potential liability under the FCA, entities in the healthcare industry should consider prioritizing compliance reviews of policies surrounding the government’s enforcement priorities discussed above.

For a robust analysis of the most notable FCA developments of 2024, please reference Barnes & Thornburg’s 2024 Healthcare Enforcement and Compliance Report, set to be released in early 2025. Addressing FCA developments, enforcement trends, civil and criminal actions, industry guidance and government policy updates, the 2023 Healthcare Enforcement and Compliance Report was released earlier this year.