For the second year in a row, the Department of Justice (DOJ) has announced its official False Claims Act (FCA) recovery statistics on the same day we at Qui Notes presented our FCA recoveries breakdown during our "Year in Review" webinar. As we predicted, DOJ reports having recovered approximately $2.2 billion in FY2020, the overwhelming majority of which ($1.86 billion) came from Health & Human Services (HHS) matters. DOJ recovered just $75 million in Department of Defense (DOD) matters and $297 million in what DOJ classifies as "Other" matters (i.e., those not involving HHS or DOD).
FY2020 FCA Recoveries-By Industry
DOJ's official statistics confirm our prior reporting that FY2020 marks the lowest total DOJ has recovered since the 2010 Affordable Care Act (ACA) amendments to the FCA.
Total FCA Recoveries (FY2009-FY2020)
Of the $2.2 billion recovered by DOJ in FY2020, nearly $1.7 billion arose from qui tam actions-approximately 76%. This, too, is a near-historic low. Not since 2008 -before the ACA amendments were passed-has DOJ brought in less than $1.9 billion from qui tams.
While FY2020 was undoubtedly a down year for DOJ, we suspect that was largely a function of the pandemic, rather than a change in enforcement priorities. As we'll break down in more detail early next week, DOJ has already bounced back in a big way in the first quarter of FY2021, bringing in more in that one quarter ($3.2 billion) than all of last year. Perhaps recognizing its lackluster showing in FY2020, DOJ's press release highlights its $3 billion-plus FCA settlement with Purdue Pharma in October 2020 related to the manufacture and sale of opioids (part of an $8 billion global criminal and civil settlement), noting that the settlements "reflect significant work [by DOJ] over the last year."
There are also some warning signs for the business community in DOJ's FY2020 numbers. Last year saw 922 new FCA cases filed-by far the highest number since DOJ began announcing FCA statistics in 2006. There was a slight uptick in new qui tams filed (672, up from 638 in FY2019), but the increase was driven primarily by a dramatic increase in the number of new cases filed by DOJ itself. In FY2020, DOJ filed 250 new direct cases, 90 more than DOJ had ever previously filed in a single year. We would not be surprised to see these numbers continue to grow as we begin to see FCA enforcement related to the COVID relief programs and the government's use of the Defense Production Act.
Check back with Qui Notes for more on DOJ's FY2020 performance and updates on FY2021 as the year unfolds.
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