Recent Overview of the False Claims Act

Settlements and judgments under the False Claims Act have reached a unprecedented high in the United States. According to the Department of Justice in a press release, there were 543 settlements and judgments in the 2023 fiscal year, which exceeded over $2.68 billion. In the release, Principal Deputy Assistant Attorney General Boynton states “As the record-breaking number of recoveries reflects, those who seek to defraud the government will pay a high price.”

The False Claims Act (FCA), also known as the “Lincoln Law,” is a federal law that imposes liability on individuals and companies who defraud governmental programs. This includes submitting false invoices, making false statements to get paid by the government, or avoiding payment of money owed to the government. The law was originally enacted during the Civil War to combat fraud by government contractors supplying the Union Army with substandard goods; however, the FCA was strengthened in 1986, when Congress increased incentives for whistleblowers to file lawsuits alleging false claims on behalf of the government.

Under the FCA, individuals or entities can be held liable for knowingly submitting false or fraudulent claims for payment to the government. The FCA allows private individuals, known as “whistleblowers” or “relators,” to file lawsuits on behalf of the government and share in any monetary recovery. These lawsuits are known as qui tam actions. If the government intervenes in the lawsuit and recovers funds, the whistleblower is typically entitled to receive a portion of the recovered amount, often ranging from 15% to 30%. In fiscal year 2023, whistleblowers filed 712 qui tam suits, and this past year the Justice Department reported settlements and judgments exceeding $2.3 billion in these and earlier-filed suits.

The False Claims Act has been instrumental in recovering billions of dollars for the government and deterring fraudulent conduct in government programs and contracts. It is one of the most powerful tools available for combating fraud against the government in the United States. Healthcare fraud has remained a leading source of FCA claims in recent years.

The Justice Department has litigated several significant cases involving the Medicare Advantage program. The Cigna Group settled for $172 million to resolve allegations that it knowingly submitted and failed to withdraw inaccurate and untruthful diagnosis codes for its Medicare Advantage Plan enrollees to increase its payments from Medicare. Martin’s Point agreed to pay more than $22 million following allegations that it violated the FCA by submitting inaccurate diagnosis codes for its Medicare Advantage Plan enrollees. Other cases related to Medicare Advantage matters continue to be litigated including actions against the UnitedHealth Group, Independent Health Corporation, Elevance Health (formerly Anthem), and Kaiser Permanente.