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False Claims Act Statistics, News & Analysis

  • 15
  • December
  • 2016

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How Could Something So Wrong Be So Right: LLB vs DOJ FCA Stats

Released just yesterday evening, DOJ’s annual FCA brag sheet for recoveries proclaimed a whopping $4.7 billion in civil FCA recoveries for FY 2016. That’s a full $1 billion more than LLB’s count in our inaugural year. How could our “polling” have been so wrong? Well, it turns out, it wasn’t. Despite first appearances, LLB’s stats were mostly on track with the DOJ reports – with one major exception that made all the difference.

To start with, as we have previously reported, our data methodologies rely on publicly available reported data. Unlike DOJ, we do not have visibility into, much less approve, all FCA settlements – and therefore DOJ has access to data that we inevitably do not have. We, therefore, expected some discrepancy between our figures and DOJ’s final stats. Here’s a breakdown of first impressions:

  
DOJ
  
LLB
  
DOJ – LLB
Defense 
$122,164,617
 
$122,209,668
 
($45,051)
       
Health Care 
$2,597,491,389
 
$2,887,224,526
 
($289,733,137)
       
Other 
$2,041,506,580
 
$698,399,418
 
$1,343,107,162
       
Total 
$4,761,357,835*
 
$3,707,833,612
 
$1,053,328,974

 

* DOJ reports this number as the total FCA recoveries. But it is $195,249 more than the sum of the industry recovery amounts. The DOJ does not explain why, but it is possible this discrepancy is attributable to the inclusion of accrued interest in the overall total. 

We will start where we made our best showing. For recoveries in the defense industry, we overshot by a mere $45,051, and do not appear to have missed any recoveries. We are analyzing further why the numbers do not line up – but this difference is not particularly material.

In health care, we overshot by $289 million. In the grand scheme of things, that is about only 11% off. That said, $289 million is still a lot of money, so we want to understand what happened. So far, we have tracked down about $110 million of the difference. For those cases, the difference is attributable to our missing that the recoveries included a share for the states or for non-FCA recoveries, which neither DOJ nor LLB counts towards federal FCA recoveries. We will keep a sharp eye for these situations going forward, but it is not clear that DOJ always announces states’ shares, so we might never be perfect on this count. Another possible explanation for our “over-counting” in defense and health care recoveries is the fact that DOJ does not include in its total amounts recovered through “delegated” non qui tam cases, meaning those handled exclusively by United States Attorneys’ offices. These amounts individually tend to be significantly smaller than those in non-delegated matters, but in the aggregate could account at least partially for why our data reflects a higher total recovery than that reported by DOJ.

But now for the main event: What about that missing $1.3 billion in the “other industries”? Fortunately, this difference is almost fully accounted for by the Wells Fargo matter – which involved a settlement of the FCA, FIRREA, and various other causes of action for $1.2 billion dollars total. LLB, of course, did not miss this matter – we reported on it previously  – but we also noted that this large settlement was not apportioned among the various causes of action. Since we did not know how to apportion, we held off putting the $1.2 billion into our database.

We should have perhaps anticipated that DOJ would claim the FULL amount as an FCA recovery – thereby causing our figures to skew low by over a billion. Once bitten, twice shy. LLB in the future will allocate the full amount of any recovery to FCA where there are multiple causes of action and the records do not otherwise show how it should be apportioned. As for the remaining about $140 million, we will investigate further, but nothing obvious stands out to us yet.

Going forward, we will correct FY 2016 data with what we have learned. You also can expect a lengthier analysis of DOJ’s press release and FY 2016 coming soon. More importantly, we will continue to aggressively track DOJ’s FCA recoveries for FY 2017 and report on them in our FCA statistics pages as they occur.



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