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Questioning The Latest Statistics on Collections Under the FCA

The latest Statistics on Collections under the FCA are in and in my view people are well, missing the main view of them.

Yes, they are down. $2.88 Billion collected in FY 18 as opposed to say $3.466 Billion in FY 17. If you look across the board it has been ten years since we have had a number below $3 Billion and the law was amended and strengthened significantly in 2009 and 2010.

DOJ fraud statistics are here:

https://www.justice.gov/civil/page/file/1080696/download?utm_medium=email&utm_source=govdelivery

The number of new matters filed was a relatively normal (which is to say still low but higher than ten years ago) 645.

Collections are usually a lagging indicator because of course it takes a few years for cases to get to the point of success and we should be enjoying quite a bit of success now since filings picked up noticeably in 2010 and have been pretty steady.

Of course, less is not better. What ought to wake people up to the tricky aspect of all this is the narrowing area of serious action by all parties who use the law.

To say that health care is dominating False Claims Act practice would be a gross understatement. Of the $2.88 billion some $2.513 billion was collected for the Department of Health and Human Services. I’m going to go out on a limb here with no statistics to back me up, but I’ll bet more than half of that was collected as a result of the Anti-Kickback Statute and Stark Law which make it possible to sue under the False Claims Act for kickback related claims in government health care programs.

This is fine as far as it goes. Yes health care is big business. Yes we need whistleblowers in this field to police it since the government is not in the room with the patient but merely pays for the service. Yes there is not the same kind of government approval of the specific service or ongoing contract responsibility in the same manner as there is in a big Defense Department contract or something so pursuing health care False Claims Act cases is relatively easier and for other technical reasons likely to be more successful than in other government agencies.

BUT

Seriously, the entire rest of the government involved $370 +- million collected?

Of THAT

They collected $107.5 Million from Defense Contractors last year and the category of “other” they collected $259 .6 Million.

The lesson in this for False Claims Act practitioners like me is clear. Health care all day long and twice-on Sunday. For us as practitioners we have to look at the area that is most likely to succeed.

It is troubling though to say the least. We should be pushing the law and pushing whistleblowers to come forward in other areas of government spending. As to the policy fights that are being brought to the Hill, rather than looking at limitations on the application of the Anti-Kickback Statute and considering new safe harbors for providers to evade liability under that law, (when they take a kickback?) isn’t the true crisis the need for government to review fighting fraud outside of health care?

You are free to believe if you wish that in the entire non-HHS related Federal Government budget $370 Million and change represents the total of a years’ worth of fraud that could be collected. The Defense Department’s Budget alone was $700 Billion for 2018 making the amount collected for fraud um 0.015%

OK that is not fair. Defense Contracting is less than the total Defense budget. In 2017 it was a mere $320 billion. Figuring today’s collection as a reflection of that may be a little inaccurate since the cases came from years earlier, but its 0.034% of contracting.

The Total Federal Government budget was $4.407 Trillion Dollars in 2018…

I don’t even know how many zeros it takes to get to that, but anyone who tells you that the problem with the FCA is that it is too aggressive and allows for too much investigation of government contracting has to be in the pay of contractors or is not looking at any real numbers.

Do you really think what has been collected from the FCA comes close to representing the full amount of fraud being perpetrated against the government? Can you say that to me with a straight face?

645 cases were filed last year.

We all have to file more. We need whistleblowers to come forward with meritorious cases to do so. Let’s inundate the government with legitimate meritorious claims till somebody asks for more money for the DOJ to fight fraud.

This is simply not enough.

We all have to do more.

And we all have to be very wary of any efforts to restrict this law, indeed we should fight to expand it. The False Claims Act is still the most powerful and best tool in the country to fight fraud even in a slower year.