Immediately following the pandemic, the U.S. healthcare industry experienced deeper scrutiny from the Department of Justice (DOJ) and this has continued to intensify ever since. Armed with its primary civil tool – the False Claims Act (FCA) – the DOJ continues to sharpen its teeth in addressing false claims made under federal programmes such as Medicare, Medicaid and Tricare. And according to its recent report detailing 2022’s settlements, the healthcare industry remains squarely in its sights.

“Protecting taxpayer dollars by preventing fraud and abuse is a critical priority for the DOJ” says the Principal Deputy Assistant Attorney General Boynton in the DoJ’s report. 2022 certainly reflected this intent; 351 settlements and judgements took place, constituting the second highest number in a single year, totalling $2.2 billion. Yet again, the healthcare industry accounted for the vast majority of the amount recovered with approximately 80%, or $1.7 billion, of that total coming from the sector. While this amount is lower than in previous years, the number of investigations has risen.

This trend is not expected to abate and the next 18 months could prove to be a critical period for healthcare organisations with the Covid-19 state of national emergency due to end in May. The U.S. Government will only increase its proactivity, ensuring any misappropriated pandemic relief funds are retrieved.

Scrutiny is sure to intensify, with one attorney commenting that the number of FCA cases will increase “especially in the health care space” and another firm speculating that 2022 “ may prove to be the calm before the storm.”

Importantly, DOJ investigations don’t solely target flagrant wrongdoing. Offences can be accidental, a case of human error, yet such non-maliciously motivated mishaps are equally penalised by the DOJ. Administrative errors during the medical billing process are a prime example, leaving healthcare suppliers without medical billings insurance on the back-foot and facing significant legal costs.  

And the costs can be staggering. For instance, the paperwork involved in a case going back three to five years can involve up to a million documents, meaning the time it takes for lawyers to review them is considerable and, at between $500 - $1000 an hour, enormously expensive. Given the DOJ’s unbending resolve, many providers are abandoning the traditional approach of self-insuring and transferring the risk to specialist insurers.

In an era of hyper scrutiny plus enhanced monetary incentives for whistle-blowers to come forward, when it comes to answering to the DOJ, it’s a matter of when, not if.