On 22 February 2024, the US Department of Justice (DOJ) published the statistics for federal civil fraud recoveries in Fiscal Year (FY) 2023.1 The DOJ announced that the "government and whistleblowers were party to 543 settlements and judgments, the highest number of settlements and judgments in a single year."2 Despite the high number of settlements and judgments, FY 2023 saw the third lowest recovery amount in the last decade. As with prior years, the numbers highlight the general downward trend of False Claims Act (FCA) civil fraud recoveries.3 Remarkably, FY 2023 had the lowest percentage of health care-related new matters since 1995.4 Nevertheless, the US$1.8 billion in settlements and judgments involving the health care industry accounted for more than two-thirds of total recoveries.
In FY 2023, the DOJ highlighted five areas that they described as "key enforcement priorities."5 These included health care fraud, procurement fraud, pandemic fraud, cybersecurity fraud, and individual accountability.6 Within those "key enforcement" areas, the government targeted health insurance companies,7 pharmacies,8 nursing facilities,9 and individual physicians,10 amongst other areas. The government also focused on COVID-19 and opioid epidemic-related fraud.11 As has been the case for at least the last decade and a half, the DOJ reinforced that fighting against fraud and abuse, "'is of paramount importance to the Department of Justice.'"12 A summary of the DOJ's report is further discussed below, as well as in a prior K&L Gates alert.
In this article, K&L Gates will discuss key developments from the first half of FY 2024, including notable settlements related to alleged kickbacks, medically unnecessary services, and controlled substances violations, among others. Additionally, K&L Gates will highlight three health care-related areas worthy of attention in FY 2024. First, after the US Supreme Court issued its decision in United States ex rel. Schutte v. SuperValu in the summer of 2023, it remained uncertain how FCA litigation and interpretation of the FCA's scienter standard would be affected by the case. This article discusses the observable impacts of that decision thus far. Second, the article discusses the circuit split on causation requirements in Anti-Kickback Statute (AKS)-premised FCA actions. And, finally, with the almost endless and continual technological advancements impacting the health care industry, the article delves into the use of artificial intelligence (AI) in health care and fraud enforcement and the DOJ's stance on its use.
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Footnotes
1. Press Release, U.S. Dep't of Just., False Claims Act Settlements and Judgments Exceed $2.6 Billion in Fiscal Year 2023 (Feb. 22, 2023), https://www.justice.gov/opa/pr/false-claims-act-settlements-and-judgments-exceed-268-billionfiscal-year-2023.
2. Id.
3. U.S. Dep't of Just., Fraud Statistics Overview (Feb. 22, 2023), https://www.justice.gov/opa/media/1339306/dl?inline.
4. Id.
5. See supra note 1.
7. See, e.g., Press Release, U.S. Dep't of Just., Cigna Group to Pay $172 Million to Resolve False Claims Act Allegations (Sept. 30, 2023), https://www.justice.gov/opa/pr/cigna-group-pay-172-million-resolve-false-claims-act-allegations.
8. See, e.g., Press Release, U.S. Dep't of Just., Two Jacksonville Compounding Pharmacies and Their Owner Agree to Pay at Least $7.4 Million to Resolve False Claims Act Allegations (June 15, 2023), https://www.justice.gov/opa/pr/twojacksonville-compounding-pharmacies-and-their-owner-agree-pay-least-74-million-resolve.
9. See, e.g., Press Release, U.S. Dep't of Just., Landlord and Former Operators of Upstate New York Nursing Home Pay $7,168,000 to Resolve False Claims Act Allegations of Worthless Services Provided to Residents (Feb. 27, 2023), https://www.justice.gov/opa/pr/landlord-and-former-operators-upstate-new-york-nursing-home-pay-7168000-resolve-falseclaims.
10. See, e.g., Press Release, U.S. Dep't of Just., Dermatologist Agrees To Pay $6.6 Million To Settle Allegations Of Fraudulent Billing Practices (July 13, 2023), https://www.justice.gov/usao-edtn/pr/dermatologist-agrees-pay-66-millionsettle-allegations-fraudulent-billing-practices.
11. See supra note 1.
12. Id.
AUDIO VERSION
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