Though 2023 was a record year for DOJ FCA enforcement in several ways, it was consistent with the uptick in enforcement and recovery in recent years.
On February 22, 2024, Department of Justice Principal Deputy Assistant Attorney General, Civil Division, Brian M. Boynton announced the DOJ’s civil enforcement priorities at the Federal Bar Association’s Qui Tam Conference.
Boynton emphasized the DOJ’s volume of enforcement activity in fiscal year 2023, noting that 2023 marked a record number of False Claims Act (FCA) settlements and judgments and for the number of Civil Investigative Demands (CIDs) issued by DOJ—a staggering 1,504. These robust tools for investigating FCA matters were triggered by a blend of government-originated FCA investigations and qui tam lawsuits filed by relators. Boynton noted that last year, the government opened approximately 500 FCA matters without a whistleblower, which was another record for the DOJ. More than 700 additional FCA cases were filed by qui tam relators.
Boynton described the DOJ’s FCA enforcement priorities as focused on the following:
Cybersecurity
The DOJ intends to continue to ramp up its efforts to enforce alleged cybersecurity violations under the FCA. Boynton touted the efforts of the Civil Cyber-Fraud Initiative, which uses the FCA to bring enforcement actions against government contractors that the government believes may place government data and systems at risk. Boynton’s remarks made it clear that the DOJ intends to increasingly view regulatory noncompliance with cybersecurity obligations as potential FCA violations when the government believes that contractors have failed to fulfill cybersecurity obligations for government data and systems.
Pandemic Fraud
The DOJ also intends to continue using the FCA to bring actions for pandemic-related fraud. After noting that relief programs provided a “necessary lifeline” during the pandemic, Boynton emphasized what he described as a “significant amount of fraud” in these programs. Recognizing that many of the pandemic fraud cases are relatively small, Boynton highlighted the DOJ’s efforts to pursue larger cases against entities allegedly engaged in systematic miscalculation of relief funds in the processing and underwriting of Paycheck Protection Program loans.
Healthcare Fraud
Healthcare fraud cases continue to account for a large percentage of FCA matters. The DOJ’s enforcement priorities will continue to include healthcare fraud, with a particular focus on anti-kickback and Stark law issues, more “sophisticated efforts” by providers to “buy referrals” through managed services organizations, cases involving “grossly substandard care” in nursing homes and fraud in connection with Medicare Part C risk-adjustment calculations. The DOJ’s Medicare Part C enforcement efforts will focus not only on insurance companies’ conduct, but will also include the role that vendors and providers play in the calculations that are provided to the government.
Third Parties Causing False Claims
The DOJ intends to aggressively pursue third parties—in particular private equity firms—that it suspects of causing healthcare providers to submit false claims through improper billing for federally funded healthcare programs. In addition to those who expressly direct providers to improperly bill for medical services, Boynton explicitly placed in the government’s crosshairs those investors who, through revenue targets or other benchmarks that encourage higher submissions, knowingly cause providers to submit false claims.
Conclusion
Though 2023 was a record year for DOJ FCA enforcement in several ways, it was consistent with the uptick in enforcement and recovery in recent years. As Boynton’s remarks reveal, the DOJ intends to aggressively utilize the FCA as its principal civil enforcement mechanism in 2024, with a particular focus on cybersecurity, pandemic-related fraud, healthcare fraud and third parties who cause false claims. These priorities potentially impact many different businesses and individuals, and anyone who interacts (directly or indirectly) with federally funded programs would do well to be aware of the DOJ’s investigative and enforcement efforts.
For More Information
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