Government Statistics Show Upward Trend in False Claims Act Settlements

Data released by the U.S. Department of Justice reveal a substantial increase in False Claims Act recoveries over the past two years. These statistics, along with comments from Department of Justice officials, indicate that the False Claims Act whistleblower provisions have become the government’s tool of choice in attacking fraud, particularly in the health care and pharmaceutical industries.

During fiscal year ending September 30, 2011, the Department of Justice secured more than $3 billion through settlements and judgments in civil cases involving fraud against the government. This marked the second year in a row where the Department of Justice reached or exceeded $3 billion. Since January 2009, the Department of Justice has recovered approximately $8.7 billion. This is the largest three-year total in the Justice Department’s history.

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Inflated Charges Lead to $30 Million False Claims Settlement

Late last week, the Justice Department announced that a large for-profit health care concern has joined the growing list of health care companies settling False Claims Act cases. In this case, the business will pay the government $30 million plus interest to settle allegations that one of its recently acquired (2004) affiliates violated the FCA by causing Medicare to overpay for a radiopharmaceutical used in certain cardiac diagnostic imaging procedures. According to the Justice Department press release, the pharmaceutical is “distributed in multi-dose vials of powder. In a process known as reconstitution, nuclear pharmacies mix the powder with a radioactive agent to prepare individual doses that are injected into patients as part of the cardiac imaging procedures.” Medicare payment was based, in part, on the number of doses available from vials of the drug. The government alleged that the affiliate provided false or misleading information regarding the number of doses available from vials, causing Medicare to pay artificially inflated rates.

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New Government Numbers for False Claims Act Filings

Recent government tallies reveal a surge in False Claims Act filings. By fall of last year, there were 1,246 qui tam cases under seal at the Department of Justice (DOJ) (i.e., pending investigation into whether the government will intervene). That number has grown by almost 100 cases as of last month. This growing caseload is reflected in the raw number of 2010 qui tam filings—over 500—which represents a dramatic 51 percent jump from the number of whistleblower cases filed just two years earlier.

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Whistleblower Lawsuit Costs GlaxoSmithKline $750 Million

The Department of Justice (DOJ) has released its False Claims Act statistics for fiscal year 2010. According to this press release, the DOJ recovered $3 billion this year in False Claims Act recoveries, 83 percent, or $2.5 billion, of which involved health care fraud. The Obama Administration has made no secret of its focus on health care fraud, and health care companies have been in the news recently for getting caught up in false claims liability.

While the government made out pretty well this year, whistleblowers didn’t do too badly either, recovering $385 million. And one relator in particular has been in the news for her whistleblowing against one of the largest drug manufacturing companies in the world, GlaxoSmithKline, for one of the scariest health care frauds ever perpetrated. 

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