On January 15, 2025, the Department of Justice (“DOJ”) announced that it recovered over $2.9 billion in False Claims Act (“FCA”) related settlements and judgments in the fiscal year ending September 30, 2024 (“FY2024”). The 2024 recovery amount exceeds the previous year’s recovery of $2.68 billion, with the number of settlements and judgments coming in at 558. Whistleblowers filed 979 qui tam complaints in 2024 reflecting the highest number filed in any single year. Health care fraud remained a leading source of FCA settlements and judgments with over $1.67 billion related to matters involving the health care industry.
As stated by Principal Deputy Associate Attorney General Benjamin C. Mizer, “[t]he False Claims Act and its whistleblower provisions remain a critical tool in protecting the public fisc and ensuring that taxpayer funds serve the purposes for which they were intended.”
The resolutions in FY2024 reflect the DOJ’s focus on key enforcement priorities, including:
Kickbacks. Claims were pursued in several qui tam actions related to kickbacks for FCA violations based on improper referrals and remuneration. A medical device manufacturer and its executives paid $12 million to settle allegations that it paid kickbacks to physicians in the form of consulting fees, intellectual property acquisition fees, performance shares, travel and lavish dinners. DOJ filed a complaint against a health system for paying physician compensation well above fair market value and submitting claims for referred services that were not eligible for payment. A large primary care provider settled allegations that it improperly paid third-party insurance agents to incentivize referrals to the provider. Since Part C is now the largest component of Medicare, we anticipate continued enforcement in this space.
Unnecessary Services and Standard of Care. DOJ also exercised enforcement actions against providers who billed for services that were not medically necessary or were below the standard of care. A health care system and twelve affiliated SNFs paid $21.3 million to resolve allegations that they knowingly billed for unnecessary, unreasonable or unskilled services. Additionally, a behavioral health care provider paid $16.6 million to resolve allegations that its facilities billed for medically unnecessary services and agreed to pay additional amounts under state law for failing to provide adequate staffing, training and supervision of staff leading to inadequate treatment.
COVID-19-Related Fraud. In 2024, DOJ obtained more than 250 FCA settlements and judgments related to COVID-19, which collectively exceeded more than $250 million. DOJ investigated a number of cases related to the Paycheck Protection Program against borrowers who were either ineligible or received duplicate or inflated loans. Additionally, in separate settlements totaling over $40 million, two clinical laboratories were investigated for paying volume-based commissions to contractors to recommend medically unnecessary respiratory tests and billing for tests not performed.
Cybersecurity Initiative. Progressing the efforts announced in 2021, DOJ continues to use the FCA to promote cybersecurity compliance. Claims were pursued against various contractors involving allegations that they failed to meet cybersecurity requirements, with some claims ending in multimillion-dollar settlements.
Practical Takeaways
Heath care-related FCA enforcement continues to be a profitable pursuit for the federal government. While the large settlements generate the most attention, even relatively modest investigations and settlements can cause significant disruption, expense and reputational harm to providers. Even more, qui tam actions are at an all-time high, and relators are showing a willingness to proceed even in the face of DOJ declination, making it more important than ever to promote a culture of compliance.
Proactive compliance programs are an excellent defense and can help identify issues before they pose FCA risk. When significant concerns do arise, providers must respond timely and complete a thorough investigation, self-reporting as necessary. Hall Render attorneys have years of experience in providing practical advice to all types of health care providers and entities.
For help understanding your legal obligations, designing a compliance program that is right for your organization or investigating a potential issue, please contact:
- Katherine Kuchan at (414) 721-0479 or kkuchan@hallrender.com ;
- Scott Taebel at (414) 721-0445 or staebel@hallrender.com;
- Brandon Helms at (248) 457-7847 or bhelms@hallrender.com;
- Kaitlin Nucci at (248) 457-7838 or knucci@hallrender.com; or
- Your primary Hall Render contact.
Special thanks to summer associate, Wyatt Poer, for his assistance with the preparation of this article.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot give legal advice outside of an attorney-client relationship.
