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90% of FCA Recoveries in FY 2018 Came from Health Care Industry

January 22, 2019

The Department of Justice (DOJ) recovered more than $2.8 billion in settlements and judgements from civil cases involving fraud and false claims in FY 2018.  Nearly 90 percent, $2.5 billion, involved the health care industry, including drug and medical device manufacturers, managed care providers, hospitals, pharmacies, hospice organizations, laboratories and physicians.  A DOJ press release with a summary of FY 2018 False Claims Act (FCA) cases is available here.

While the dollar amount of total recoveries in 2018 declined from previous years, the number of new cases was relatively consistent.  Whistleblower, or qui tam, actions comprised the clear majority of recoveries and new cases and remain the primary driver of DOJ’s FCA enforcement efforts.

Notably, two DOJ memoranda were made public revealing key department policy.  The Granston memo focuses on DOJ’s authority to dismiss meritless qui tam cases brought by whistleblowers.  Hancock Daniel released this client advisory explaining the Granston memo.  In accordance with this guidance, in December 2018, DOJ moved to dismiss 11 FCA cases pending against pharmaceutical manufacturers alleging that the pharmaceutical manufacturers were providing kickbacks in the form of free nursing services and free reimbursement support to health care providers and patients.

The Brand memo, also made available in 2018, prohibits DOJ from utilizing agency guidance documents, as opposed to statues or regulations, as the basis for civil enforcement actions.  Given the large volume of guidance documents authored by the Centers for Medicare & Medicaid Services and other health care oversight agencies, this could have a significant impact on future civil health care enforcement.

In addition to these policies, DOJ continued focusing on Anti-Kickback Statute and Stark Law enforcement actions, as well as managed care and opioid-related fraud cases.  It is expected that DOJ will continue to bring enforcement actions in these focus areas in 2019.

If you have any questions about these enforcement actions or need assistance responding to government agency inquiries oinvestigative activity, please contact Eric Atkinson or a member of Hancock Daniel’s Healthcare Investigations and Enforcement Actions team.

The information contained in this advisory is for general educational purposes only. It is presented with the understanding that neither the author nor Hancock Daniel, is offering any legal or other professional services. Since the law in many areas is complex and can change rapidly, this information may not apply to a given factual situation and can become outdated. Individuals desiring legal advice should consult legal counsel for up-to-date and fact-specific advice. Under no circumstances will the author or Hancock Daniel  be liable for any direct, indirect, or consequential damages resulting from the use of this material.