Healthcare Whistleblowers Continue as Backbone of DOJ Recoveries: A Look at DOJ’s 2018 Fraud and FCA Statistics
The Department of Justice released its annual report of DOJ recoveries for fraud and false claims against the U.S., showing recoveries of $2.8 billion in settlements and judgments for the fiscal year ending September 2018. Once again, recoveries for healthcare fraud accounted for the majority of funds recovered: of the $2.8 billion recovered, $2.5 billion was attributed to healthcare fraud. And, once again, whistleblowers were critical to those recoveries: of the $2.5 billion in healthcare recoveries, $1.95 billion was recovered in cases brought by whistleblowers under the False Claims Act.
Healthcare: Where the Money Is
With Medicare and other healthcare spending accounting for almost half of federal spending (excluding debt service and Social Security programs), it is a natural target for fraudsters. Over the past decade, healthcare recoveries have represented the largest share of federal recoveries.
While 2018 total recoveries are the second-lowest year of the last ten years, healthcare recoveries are just about average. In its press release, DOJ notes that 2018 marks the ninth consecutive year that DOJ’s civil healthcare fraud settlements and judgments have exceeded $2 billion. The high-recovery years of 2012, 2014, and 2016 can largely be attributed to settlements with banks and others in the mortgage industry that defrauded government housing programs leading up to the 2007-2008 mortgage crisis.
Whistleblowers: Where the Recoveries Are
Of the $2.8 billion in 2018 recoveries, over $2.1 billion arose from lawsuits filed under the qui tam provisions of the False Claims Act. For all cases, including healthcare fraud, whistleblowers bringing qui tam cases are the backbone of government recoveries. The government paid out $301 million to whistleblowers who exposed fraud and false claims by filing these actions.
Assistant Attorney General Jody Hunt lauded the important role of whistleblowers, saying “whistleblowers have played a vital role in unmasking fraudulent schemes that might otherwise evade detection. The taxpayers owe a debt of gratitude to those who often put much on the line to expose such schemes.”
Because FCA and fraud cases can take years to produce recoveries, it is also important to look at DOJ’s figures about new filings during the past year. Here, the 2018 report gives cause for some concern: new qui tam filings are below average in all categories, continuing a downward trend.
This reduction in new filings may simply be a return to the norm, after a burst in new filings over the past decade. As the continued pace of recoveries suggests, DOJ remains interested in pursuing strong whistleblower cases. Experienced whistleblower attorneys can help potential whistleblowers weigh their options and understand the process in deciding whether to file a qui tam complaint. (See our page I think I Have a Whistleblower Case)
What is Missing from the DOJ Statistics
DOJ’s statistics are focused on only one aspect of fraud recoveries and whistleblower cases. As set forth in DOJ’s press release, the report includes funds obtained in investigations and litigation by DOJ’s Civil Division from “settlements and judgments from civil cases involving fraud and false claims against the government.” Therefore, the report excludes important categories of recovery and areas where whistleblowers can make a difference, such as:
- Criminal penalties
- Recoveries in cases delegated to United States Attorneys’ offices, instead of those handled by the Civil Division
- Recoveries by state and local governments
- Recoveries by the government for fraud against non-governmental entities, such as by the Securities and Exchange Commission or Commodity Futures Trading Commission
- Tax fraud and underpayment
- New: DOJ 2019 Fraud Statistics Tell Story of the Critical Role of Whistleblowers
- The False Claims Act
- Healthcare Fraud
- Government Contract Fraud
- DOJ Enforcement Actions
- Top-10 Lists of Fraud and Whistleblower Cases
- I think I have a whistleblower case
- Whistleblower FAQs