DOJ Announces $2.92 Billion in FY24 FCA Recoveries, Back to Pre-Pandemic Levels and a Second Consecutive Record for New Cases

Just yesterday (and much earlier in the year than it has recently), the U.S. Department of Justice (DOJ) released its annual False Claims Act (FCA) statistics for Fiscal Year (FY) 2024. The government’s FCA recoveries increased for a third straight year and nearly eclipsed $3 billion — the annual mark DOJ typically hit in the decade before the pandemic. This figure is now back to familiar territory and, as DOJ’s press release noted, could have been markedly higher if big settlements it reached in October (including one with Raytheon for more than $400 million) had come a few weeks earlier. Nevertheless, many of the other metrics in DOJ’s report reflect a changing FCA landscape. Let’s dive into the numbers.

Looking at the breakdown of DOJ’s total of $2.92 billion, we see a continuation of a trend that has emerged in the past few years: the shrinking share of healthcare recoveries in the overall FCA mix. To be sure, healthcare-related recoveries still account for the majority of FCA recoveries, but for the second year in a row they are less than two-thirds of the total. This year’s healthcare recoveries clocked in at $1.68 billion, or about 57% of the total.

So what has been taking healthcare’s place in the sights of DOJ and relators? This year, at least, it was not defense-related recoveries, which made up a relatively small $93 million, making this only the third year in the past 10 in which defense recoveries fell below $100 million. Rather, this year saw a large figure — $1.15 billion — in the “other” category. Though this category isn’t broken down further in the official statistics list, DOJ’s press release reports that more than $250 million of this category relates to pandemic-fraud cases. The remainder consists of a whole range of case types, from those involving the terms of affordable-housing grants, to royalties for oil and natural gas produced on federal land, to settlements under DOJ’s increasingly busy Civil Cyber Fraud Initiative.

DOJ’s release also touted the fact that this year saw the second-highest number of recoveries ever, with FY24’s 558 recoveries falling just short of the prior year’s 566. As with last year, a large number of these are relatively small-dollar pandemic-fraud cases. In 250 covid-related cases, DOJ recovered $250 million, or about $1 million per case. That means that in the remaining 208 recoveries, which netted DOJ $2.67 billion, DOJ averaged $12.8 million per recovery.

In light of last year’s ruling by Judge Mizelle in the Middle District of Florida that the qui tam device is unconstitutional, and the ensuing prognosticating about what might happen if the Eleventh Circuit — or the Supreme Court — were to adopt that position, it’s also interesting to see what the statistics say about recoveries in cases that do and do not rely on relators. About a quarter of DOJ’s recoveries ($502.9 million) came in cases initiated directly by DOJ without a relator. The lion’s share of DOJ’s recoveries — $2.20 billion — came in cases that had been initiated as qui tams but in which DOJ ultimately intervened or, to use its terminology, “otherwise pursued.” Only about 7.5% of total recoveries, less than $218 million, came in qui tam cases in which DOJ did not intervene. Put another way, while DOJ was involved in more than 92% of the dollar value of this year’s recoveries, relators initiated cases amounting to roughly 83% of the dollar value recovered, so it is no surprise that the press release, as is typical, contains a quote from a senior DOJ official (here, Principal Deputy Assistant Attorney General Boynton) recognizing the “critical role” played by whistleblowers “in identifying fraud schemes” and noting that DOJ “continues to be grateful for their efforts.”

Against the backdrop of that ongoing wrangling about the constitutionality of relator-initiated cases, the number of new qui tam matters filed in FY24 was by far the highest on record: 979. That number far exceeds the prior record of 757 set in FY13 (last year saw 713 new qui tams, itself a substantial figure). DOJ also initiated its second-most cases ever, with 423, somewhat of a decline from last year’s record of 505, but that number is still much higher than the roughly 200 cases per year average DOJ-initiated cases from the decade prior to last year. In combination with the massive number of new qui tams, this year comfortably breaks last year’s record for total new cases initiated, with 1,402. For context, last year’s number of 1,212 was the first time a single year saw more than 1,000 cases initiated. We noted last year that the effects of pandemic-related litigation lull on the FCA appeared to be reversing, and we expect that trend to continue with DOJ already notching $1.7 billion in recoveries in FY25 so far by our count here at Qui Notes.

Continue to monitor Qui Notes as we keep you posted on key FCA developments in the year ahead.

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