On 15 January 2025, the US Department of Justice (DOJ) published its report (Report) announcing civil recoveries under the False Claims Act (FCA) for Fiscal Year (FY) 2024. The recoveries for FY 2024 exceeded US$2.9 billion, approximately US$1.7 billion of which involved the health care industry. The US government has now collected over US$78 billion in recoveries under the FCA since the statute was amended in 1986 to allow for treble damages and increased incentives for whistleblowers. Notably, the 979 qui tam lawsuits filed in FY 2024 marked the highest number in a single year; and the 558 settlements and judgments trailed only just behind the record number set in FY 2023.
As with FY 2023, qui tam cases comprised the largest portion of recoveries, with over 83% (US$2.4 billion) stemming from whistleblower actions. The government paid over US$400 million to whistleblowers in relation to these FY 2024 recoveries. Of the record-setting 979 qui tam suits that were filed in FY 2024, 370 were health care focused.
DOJ also highlighted its “key enforcement priorities” for FY 2024 and provided representative examples. The enforcement priorities included health care fraud, military procurement fraud, pandemic fraud, and cybersecurity fraud. As with prior years, health care fraud was the principal source of FCA recoveries, which included recoveries relating to Medicare Advantage fraud, billing for unnecessary services and substandard care, opioid epidemic-related fraud, kickback schemes, and Stark Law violations.
Health Care Fraud
With Medicare Advantage, also known as Medicare Part C, having become the largest component of the Medicare program, the government continued its focus on Medicare Advantage fraud. In FY 2024, the government secured a substantial recovery from a provider that allegedly paid kickbacks to third-party insurance agents in exchange for recruiting senior citizens to the provider’s primary care clinics. DOJ also highlighted that it is continuing to litigate a number of cases against Medicare Advantage Organizations.
DOJ obtained substantial recoveries from providers who allegedly improperly billed for medically unnecessary services and substandard care. Additionally, the government has continued to focus on opioid crisis-related fraud, with several substantial recoveries against pharmaceutical companies and individual physicians.
In a carry-over from FY 2023, some of the largest health care recoveries in FY 2024 resulted from alleged unlawful kickback schemes and Stark Law violations. The kickback schemes ranged from payments to purportedly induce referrals of dialysis patients, to medical directorships that were intended to induce patient referrals. As to the Stark Law, DOJ highlighted a US$345 million settlement to resolve allegations that a health care network paid compensation to certain physician groups far above fair market value and awarded bonuses tied to referral volume.
Other Enforcement Priorities
In addition to health care-specific recoveries, the government recovered significant funds stemming from military procurement fraud, pandemic fraud, and cyber fraud. The military procurement fraud recoveries included a US$70 million settlement against a contractor to resolve allegations that they overcharged the US Navy for spare parts and materials needed to repair and maintain aircraft used to train naval aviators. Of note, military procurement fraud recoveries could have been much higher in FY 2024, however, a US$428 million settlement with a defense contractor occurred on 16 October 2024, putting that recovery in FY 2025.
The government also resolved an estimated 250 cases, totaling over US$250 million, in connection with pandemic-related fraud. As with FY 2023, the pandemic fraud largely stemmed from the submission of inaccurate information in PPP loan applications, though the DOJ also highlighted a US$12 million recovery that resolved allegations of false claims for COVID-19 testing that were billed to the Health Resources and Services Administration’s Uninsured Program.
In October 2021, DOJ announced its Civil Cyber-Fraud Initiative with the goal of pursuing companies who receive federal funds while failing to follow required cybersecurity standards. In FY 2024, the government entered into several recoveries under the Civil Cyber-Fraud Initiative. DOJ also highlighted a complaint-in-intervention that was filed against a research institution alleging that the defendants had failed to meet cybersecurity requirements in connection with Department of Defense contracts.
Whistleblower Suits
Given the record-setting number of qui tam cases filed in FY 2024, it will be important to continue to monitor developments regarding the constitutionality of the qui tam provisions. On 30 September 2024, a judge in the US District Court for the Middle District of Florida held that the qui tam provisions of the FCA violate the Appointments Clause of Article II of the US Constitution. This first-of-its-kind decision has sparked a wave of filings by the defense bar. With the Middle District of Florida’s decision on appeal, there are sure to be many developments on this issue in the coming months.
The FY 2024 settlements and judgments provide an insight into the government’s enforcement priorities and potential future enforcement areas. The firm’s forthcoming article The False Claims Act and Health Care: 2024 Recoveries and 2025 Outlook will provide an in-depth analysis of the 2024 recoveries, as well as some key enforcement areas to look out for in 2025.