January 6, 2014
Health Care Is Still the Epicenter
The lion’s share of FCA recoveries has long come from health care and life sciences, with the defense industry placing a distant second. There’s been speculation in recent years that better compliance among providers and drugmakers, along with wider application of the FCA, could change things. In 2012, for example, just 60 percent of recoveries were related to health care, an unusually low portion.
But there was no evidence of a shift in 2013, as more than 68 percent of FCA proceeds were derived from the health and life sciences industries.
Robert K. Lu, a former health fraud lawyer at the DOJ who is now at Robbins Geller Rudman & Dowd LLP, said the disparity will almost certainly persist, given that Medicare and Medicaid are expanding and the federal government is taking on an even greater role in health care.
“I just don’t see that share of the pie in terms of FCA recovery ever dropping below two-thirds,” Lu said.
It’s possible that the proportion will remain stable instead of becoming even more skewed toward health care, Lu said, depending on the government’s success using other statutory tools to go after businesses in other fields. Several looming cases, for example, are testing the potency of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 for punishing fraud.
“The only reason I could see where the numbers don’t trend upward as highly as we expect them to is just a different emphasis on priorities,” Lu said.
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