On 7 February 2023, the US Department of Justice (DOJ) publicly reported the statistics for federal civil fraud recoveries in Fiscal Year (FY) 2022.¹ While the DOJ emphasized in its accompanying press release that “the government and whistleblowers were party to 351 settlements and judgments” which comprised “the second-highest number of settlements and judgments in a single year,”² the numbers illustrate that FY 2022 continues a years-long trend—FY 2021 aside³—of diminishing False Claims Act⁴ (FCA) civil fraud recoveries.⁵ Indeed, FY 2022’s US$2.2 billion in total recoveries was the lowest total in 14 years.⁶ Fascinatingly, for the first time since the DOJ began tracking FCA statistics in FY 1987, aggregate recoveries in non-intervened qui tam actions outpaced that in qui tam matters in which the DOJ intervened or otherwise pursued recovery.⁷ This held true both for health care matters and overall.⁸ 

At US$1.8 billion, the health care industry again accounted for the lion’s share of recoveries in FY 2022 (80% of the aggregate total).⁹ However, this was the lowest amount for health care-related¹⁰ recoveries since FY 2009.¹¹ As in the past, the government pursued a wide array of health industry entities and providers with its civil fraud enforcement efforts in FY 2022. Over the course of the year, it targeted pharmaceutical manufacturers,¹² health plans,¹³ nursing homes and long-term care management companies,¹⁴ home health companies,¹⁵ hospices,¹⁶ health care systems,¹⁷ hospitals,¹⁸ durable medical equipment companies,¹⁹ pharmacies,²⁰ individual practitioners,²¹ physician groups,²² and clinical laboratories,²³ to name a few. As predicted last year,²⁴ Medicare Advantage-related enforcement proved a governmental focus in FY 2022, as evidenced by the DOJ’s announced intervention in one such case²⁵ and continued participation in several others.²⁶ The government also highlighted its enforcement priorities in Medicaid program FCA cases and COVID-19-related fraud,²⁷ among other areas. The DOJ signaled its intent to continue pursuing health care fraud wherever it may be found, emphasizing yet again its view that “enforcement of the [FCA] deters others who might try to cheat the system for their own gain, and in many cases, also protects patients from medically unnecessary or potentially harmful actions.”²⁸ 

In this article, K&L Gates LLP highlights three areas worthy of the health care industry’s attention in the year ahead and beyond. First, all eyes are on the Supreme Court of the United States (SCOTUS) as it addresses two hotly contested FCA issues: (1) the contours of the government’s dismissal authority in non-intervened cases, and (2) the extent to which defendants can escape FCA liability by relying on objectively reasonable interpretations of governing regulations (even where they subjectively doubt those interpretations). Second, providers should pay close attention to the government’s growing use of the “High Risk – Heightened Scrutiny” list, which the government has demonstrated an increased willingness to use for providers the government does not wish to exclude from the federal health care programs, but who refuse to enter into Corporate Integrity Agreements (CIAs) despite signing an FCA settlement agreement. Lastly, COVID-19-related fraud enforcement will likely gain momentum as the government devotes resources toward investigating and prosecuting fraud stemming from the pandemic. This article will analyze these topics in depth, but will first delve into the FY 2022 statistics in detail.

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