With the arrival of the Biden Administration and new upper-level appointments in the Department of Justice ("DOJ"), the way the DOJ enforces False Claims Act ("FCA") cases may evolve. Over time, recovery and enforcement trends help to understand how different administrations approach FCA enforcement.
Recent False Claims Acts Trends
Over the past four years, there has been a downward trend in the amount of False Claims Act recoveries. Although FCA recoveries in 2020 totaled over $2.2 billion, this is actually the lowest yearly recovery total since 2008. This total is not the result of a decrease in False Claims Act filings. In fact, 2020 marked an all-time high for the number of FCA actions initiated.
While disruption caused by the COVID-19 pandemic is almost certainly a factor for the 2020 data, the downward trend was evident even before the onset of the pandemic. The Justice Department’s data plotted below shows the upward trend of FCA total recoveries after 2008 and the opposite trend following 2016.
Typically, several years pass between the filing of an FCA case and the payout of a recovery. Thus, FCA recovery trends do not necessarily reveal a great deal about the enforcement priorities of an administration. Indeed, FCA recoveries during the Trump administration (after 2016) were partially the result of FCA enforcement actions initiated by the Obama administration. We will not see the full results of Trump-era enforcement activities for several more years, and Biden-era enforcement priorities will become evident over a longer period of time.
Biden’s Record Fighting Fraud Against the Government
That said, President Biden’s record on FCA policy portends a potential increase in government interventions into FCA qui tam actions, and perhaps a consequent increase in total FCA recoveries. When Biden was a Senator, he supported the 1986 amendments strengthening the FCA, speaking about the need for bi-partisan support of measures fighting fraud against the government.
As Vice President, Biden oversaw the implementation of the 2009 Recovery Act, which distributed over $800 billion for economic recovery after the 2008 financial crisis. While overseeing the Act’s implementation, Biden emphasized the importance of strong oversight to avoid potential instances of fraud against the government. His efforts were successful, with only 0.2% of the funds implicated in cases of potential fraud. During his tenure as Vice President, Biden also headed the Government Accountability and Transparency Board, created in 2011 to target waste and fraud against the government.
The Justice Department’s FCA Enforcement Priorities
President Biden’s Justice Department has already outlined areas in which they intend to prioritize FCA enforcement. In February of 2021, Acting Assistant Attorney General Brian Boynton described the Department’s top six priorities for upcoming FCA enforcement, listing the following:
- Pandemic-Related Fraud
- Fraud Targeting Seniors
- Electronic Health Records (EHR)
Nearly all of the items above in some way target the broader category of fraud related to healthcare and COVID-19. There is an additional emphasis on potential areas of fraud created by advancements in technology (e.g., EHR, telehealth, and cybersecurity).
Pursuing Fraud Related to Healthcare and COVID-19
Per Boynton’s statement on FCA priorities, the Biden Administration is expected to prioritize FCA with respect to healthcare fraud. Even before the COVID-19 pandemic, curbing healthcare fraud has been a high priority for the government. In 2019, over $1.9 billion in recoveries of the total $2.2 billion, more than 86%, were associated with false claims in the healthcare industry. Due to the COVID-19 pandemic, the focus on fraud within the health care industry is expected to intensify under the Biden Administration.
In addition, the Biden administration will monitor fraud within large government spending programs created to remedy economic harm, such as the PPP and the various initiatives that comprise the American Rescue Plan. As Biden remarked about the implementation of his American Rescue Plan and the other economic recovery programs, “it requires fastidious oversight to make sure the relief arrives quickly, equitably, and efficiently with no waste or fraud.”
Biden’s administration will likely oversee implementation of the American Rescue Plan as he oversaw the 2009 Recovery Act, with a focus on avoiding monetary losses to fraud by increasing oversight and holding individuals and organizations accountable for defrauding the government.
Proposed FCA Amendments
Factors influencing FCA enforcement extend beyond White House policy. In July of this year, Senator Chuck Grassley (R-Iowa) proposed legislation amending the False Claims Act to make it easier for qui tam plaintiffs and the government to recover damages under the FCA. Grassley’s proposed amendment includes the following changes:
- Raising defendants’ burden of proof when rebutting materiality from a preponderance of the evidence to requiring clear and convincing evidence;
- Imposing upon the Government the burden of demonstrating reasons for dismissal of qui tam actions; and
- Strengthening retaliation protections for whistleblowers.
Although the outcome of this proposed legislation is not guaranteed, Grassley’s proposals have received significant bi-partisan support, which indicates a trend toward increased government efforts to hold accountable those defrauding the government. Read more about the proposed changes and how they would impact False Claims Act actions here.
What This Means For Whistleblowers
The potential increase under the Biden Administration in FCA actions receiving government intervention depends on whistleblowers coming forward with insider knowledge of fraud against the government. If you are aware of fraud against the government and have questions about how to proceed with an FCA case, call Goldberg Kohn at 312-284-3258 or contact us online. We are always willing to provide you with a free, confidential consultation to discuss a potential case.