Lebau & Neuworth attorneys frequently represent whistleblowers who report fraud, waste, and abuse within local, state, and federal government agencies. Because the Lebau & Neuworth attorneys are experts in employment law, they are equipped to advise employees on job protections and the significant monetary recoveries possible under whistleblower laws.
The federal False Claims Act is an important tool for whistleblowers to report fraud against the federal government. In 2024, the False Claims Act (FCA) continued as a pivotal instrument for the U.S. Department of Justice (DOJ) in combating fraud against federal programs. The fiscal year saw significant recoveries, landmark legal decisions, and a surge in whistleblower activities, underscoring the Act’s continuing relevance.
Record Recoveries and Enforcement Actions
The DOJ reported that FCA settlements and judgments exceeded $2.9 billion in fiscal year 2024. This substantial sum reflects the government’s determination to safeguard public funds. Notably, healthcare fraud remained a predominant focus, with recoveries restoring funds to programs such as Medicare, Medicaid, and TRICARE. These efforts not only recuperate financial losses but also help protect patients from medically unnecessary or potentially harmful actions. (1)
Increase in Whistleblower Initiatives
Whistleblowers, or qui tam relators, played an instrumental role in FCA enforcement throughout 2024. A record of 979 qui tam suits were filed, leading to whistleblowers collecting over $400 million for their efforts in exposing fraud and false claims. This increase highlights private individuals' critical role in assisting the government in identifying and prosecuting fraudulent activities. (2)
Noteworthy Settlements and Legal Actions
Among numerous developments, several high-profile settlements and legal actions in particular, marked the year.
Walgreens Boots Alliance:
The pharmacy chain agreed to pay $106.8 million to resolve allegations of submitting false claims to federal healthcare programs between 2009 and 2020. The Department of Justice stated that Walgreens billed Medicare, Medicaid, and other programs for prescriptions that were processed but never picked up by patients. Despite acknowledging a software error that caused these incorrect billings, Walgreens corrected the issue, reported it, and voluntarily refunded all overpayments. (3)
Dell Technologies:
The company settled for $2.3 million over allegations of overcharging the U.S. Army on government contracts. The allegations stated that Dell and its reseller colluded by inflating prices, which created a false appearance of competition. (4)
Novartis Pharmaceuticals:
A U.S. appeals court reinstated a whistleblower lawsuit accusing Novartis of paying illegal kickbacks to doctors to promote their multiple sclerosis drug, Gilenya. The allegations suggest that Novartis organized sham speaker events, offering extravagant dinners for the promotion of the medication, leading to fraudulent claims to government health insurance programs. (5)
CVS Pharmacy:
The DOJ filed a civil complaint against CVS, accusing the company of filling unlawful prescriptions violating the Controlled Substances Act and seeking federal healthcare reimbursements in breach of the FCA. The complaint alleges that CVS dispensed dangerous and excessive quantities of opioids and filled prescriptions from known “pill mill” prescribers, which ignored important warning signs from pharmacists and internal data. (6)
Judicial Developments
The Supreme Court case, Wisconsin Bell, Inc. v. United States ex rel. Heath addressed the application of the FCA to fraudulent representations made to private administrators of government programs. The Court held that these actions are prosecutable under the FCA as long as the disbursed funds originated partly from the government. (7)
Conclusion
Overall, 2024 underscored the FCA’s critical role in deterring fraud against federal programs. With record numbers of recoveries, increased whistleblower participation, and significant legal proceedings, the Act continues to be a cornerstone of government efforts to maintain the integrity of public funds and programs.
Takeaways from the start of 2025:
Bringing us into 2025, the False Claims Act (FCA) landscape has already been shaped by significant legal developments, enforcement actions, and policy shifts.
Notable Legal Developments
Supreme Court Ruling:
In Wisconsin Bell, Inc. v. United States ex rel. Heath, the Supreme Court unanimously held that fraudulent representations made to private administrators of government programs are prosecutable under the FCA, so long as the disbursed funds originate from the government, at least in part. (8)
Administrative False Claims Act (AFCA):
Enacted as part of the FY 2025 National Defense Authorization Act, the AFCA empowers federal agencies to directly pursue administrative FCA actions for claims aggregating up to $1 million. This shift aims to expedite the resolution of smaller fraud cases without necessitating Department of Justice involvement. (9)
Enforcement Actions
Walgreens Lawsuit:
The Department of Justice filed a lawsuit against Walgreens, alleging the pharmacy chain filled millions of illegitimate prescriptions, including opioids over the past decade. The complaint declares that Walgreens pharmacists were pressured to fill prescriptions without proper verification, which contributes to the opioid crisis. (10)
Regeneron Pharmaceuticals:
The 1st U.S. Circuit Court of Appeals ruled that the government is required to demonstrate that any alleged kickbacks directly caused Medicare to make payments it otherwise would not have made. This decision raises the burden of proof in the government’s lawsuit accusing Regeneron of using a charity to subsidize co-payments for its eye drug, Eylea. (11)
Policy Trends
DOJ’s Commitment to FCA Enforcement:
The Department of Justice has reaffirmed its dedication to aggressively enforcing FCA, which highlights its application against illegal trade practices.
The DOJ reported a record number of qui tam, or whistleblower actions, filed in 2024, with 979 cases—a 37% increase over the year before. (12) These developments underscore the FCA’s evolving role in combating fraud against federal programs. This reflects both judicial interpretations and legislative amendments focused on enhancing the efficiency of enforcement.
Sources
3.) Walgreens to Pay $106.8 Million Over Alleged Fraudulent Healthcare Billings, Wall Street Journal
5.) Novartis must face claims it paid kickbacks to promote MS drug, US appeals Court Rules, Reuters
6.) DOJ files complaint against CVS for facilitating unlawful sale of prescription opioids, AP News
7.) & 8.) Wisconsin Bell, Inc. v. United States ex rel. Heath, Wikipedia
9.) Federal Agencies Can Now Directly Pursue FCA Cases Up to $1M, Sidley blog
11.) US must meet tougher standard in Regeneron kickback lawsuit, Reuters
