False Claims Act 2023 Mid-Year Review

Episode Date: September 13, 2023

In this episode of Stark Integrity, Bob Wade (“Captain Integrity”) provides a detailed mid-year update on False Claims Act (FCA) enforcement trends for 2023, focusing on notable settlements, emerging risk areas, and the continued importance of compliance in the healthcare industry.

The False Claims Act remains one of the federal government’s most powerful enforcement tools, particularly in healthcare. As Bob Wade explains, even in the first half of 2023, enforcement activity demonstrates that fraud, waste, and abuse remain top priorities, and organizations must be prepared for continued scrutiny.

This episode offers both a snapshot of current enforcement activity and a forward-looking view of compliance risk.

The Continued Strength of FCA Enforcement

At the outset, Bob Wade emphasizes that FCA enforcement remains highly active, even if overall settlement dollars fluctuate from year to year.

He notes that:

• There have been both expected and surprising settlements in 2023
• Enforcement activity continues across multiple healthcare sectors
• The government remains aggressive in pursuing claims

This aligns with broader enforcement data showing that FCA activity continues at a high volume, with hundreds of settlements annually and billions recovered each year.

Importantly, Wade highlights that the number of cases—not just dollar amounts—matters, as it reflects the overall enforcement environment and level of scrutiny.

The Qui Tam Engine: Whistleblowers Driving Enforcement

One of the central themes of the episode is the ongoing importance of qui tam (whistleblower) actions.

Bob Wade explains that:

• The “qui tam bar” remains extremely active
• Many FCA investigations originate from insider complaints
• Whistleblowers continue to play a critical role in enforcement

This is consistent with national trends, where:

• The majority of FCA recoveries stem from whistleblower cases
• Hundreds of qui tam lawsuits are filed each year
• Whistleblowers receive substantial financial awards

The takeaway is clear:
Organizations must assume that internal issues can quickly become external enforcement actions.

Key Enforcement Focus Areas in 2023

Throughout the episode, Bob Wade highlights several recurring areas of regulatory attention.

Fair Market Value (FMV) and Stark Law Issues

A major area of focus continues to be:

• Physician compensation arrangements
• Compliance with fair market value standards
• Alignment with Stark Law requirements

These issues frequently arise in cases involving:

• Overcompensation
• Improper financial relationships
• Arrangements tied (directly or indirectly) to referrals

Wade underscores that FMV and Stark compliance are consistently among the highest-risk areas for healthcare organizations.

Specialty-Specific Enforcement: Focus on Ophthalmology

One of the more notable trends discussed is the apparent concentration of cases in certain specialties, particularly ophthalmology.

Bob Wade notes:

• Cataract procedures and related billing practices have received significant attention
• Certain specialties may become “hot spots” for enforcement

This demonstrates that FCA enforcement is not always evenly distributed—
it often targets specific service lines where patterns or vulnerabilities are identified.

Medically Unnecessary Services and Billing Issues

Another recurring theme in FCA enforcement involves:

• Billing for services that are not medically necessary
• Upcoding or improper documentation
• Patterns of overutilization

These issues remain a core enforcement priority, as they directly impact government program spending.

The Nature of Settlements: Expected vs. Unexpected

A key observation from the episode is that FCA settlements often fall into two categories:

1. Expected Cases

These include:

• Traditional fraud schemes
• Clear violations of established rules
• Repeat enforcement themes (e.g., kickbacks, billing issues)

2. “Shock Factor” Cases

Bob Wade highlights at least one case with a “shock factor,” meaning:

• Unexpected fact patterns
• Unusual legal theories
• Significant penalties tied to less obvious issues

These cases are particularly important because they:

• Signal evolving enforcement priorities
• Highlight areas organizations may not have fully considered

Broader FCA Enforcement Trends

While the episode focuses on mid-2023 developments, it also reflects broader trends in FCA enforcement:

• Healthcare continues to dominate FCA recoveries, often accounting for the majority of enforcement activity
• The government is pursuing a higher volume of cases, even when individual settlements may be smaller
• Enforcement theories continue to evolve, expanding beyond traditional fraud frameworks

This suggests an environment where enforcement is both:

• Broad (targeting many organizations)
• Deep (focusing on specific compliance weaknesses)

Compliance Implications for Healthcare Organizations

Throughout the discussion, Bob Wade emphasizes the practical implications for healthcare providers and organizations.

Key compliance considerations include:

1. Strengthening Internal Controls

Organizations must:

• Monitor billing practices
• Review physician compensation arrangements
• Ensure documentation supports claims submitted

2. Addressing FMV and Stark Risk

Given the continued focus on these areas:

• Compensation models should be regularly reviewed
• FMV opinions should be well-supported
• Arrangements should be operationally compliant—not just structurally compliant

3. Preparing for Whistleblower Exposure

Organizations should:

• Maintain effective compliance programs
• Encourage internal reporting
• Address issues proactively before they escalate

4. Monitoring Specialty-Specific Risk Areas

Certain service lines may face:

• Disproportionate scrutiny
• Targeted enforcement initiatives

This requires risk-based compliance monitoring, rather than a one-size-fits-all approach.

Practical Takeaways

The key takeaway from this mid-year review is that FCA enforcement remains both active and evolving.

Healthcare organizations should:

• Expect continued high levels of enforcement activity
• Recognize the central role of whistleblowers
• Focus heavily on FMV and Stark compliance
• Monitor trends in specialty-specific enforcement
• Treat all billing and compensation issues as potential FCA risks

Final Thoughts

This episode reinforces a fundamental principle:
The False Claims Act continues to be one of the government’s most effective tools for policing healthcare compliance.

Through Bob Wade’s analysis, it becomes clear that enforcement is not slowing—it is adapting, targeting new areas while continuing to pursue familiar risks.

Organizations that stay ahead of these trends—by investing in compliance, monitoring risk areas, and responding proactively—will be far better positioned to navigate this complex and evolving enforcement landscape.

Click here to listen to this Stark Integrity Podcast Episode:
https://podcasts.apple.com/us/podcast/false-claims-act-2023-mid-year-review/id1588939373?i=1000627682832&l=fr-FR