Insights

On March 27, 2025, HHS announced a “dramatic restructuring” of its various agencies and offices in accordance with President Trump's Executive Order, “Implementing the President’s ‘Department of Government Efficiency’ Workforce Optimization Initiative.” HHS also published a Fact Sheet.

FY 2024 saw continued growth in False Claims Act enforcement, with a record year for new qui tam and government-initiated actions, and the highest total recovery in three years. Enforcement of pandemic-related fraud and cybersecurity noncompliance increased, and health care, procurement, and small business fraud violations were again priority areas. A groundbreaking opinion from the District Court for the Middle District of Florida may have teed up a potentially landscape-shifting decision about the viability of the qui tam mechanism in the not too distant future. And a landmark administrative law decision at the U.S. Supreme Court may impact many FCA cases to come. Significant decisions regarding retaliation, excessive fines, the first-to-file rule, and the public disclosure bar were also handed down by courts of appeals. Crowell attorneys discuss these highlights and others in a “Feature Comment” published in The Government Contractor.

As the primary civil enforcement statute for investigating and remedying fraud in connection with United States government programs, the False Claims Act (FCA) has resulted in more than $75 billion in recoveries of government funds since 1986. The FCA imposes liability on any person or entity that knowingly submits false claims or certifications to the government or improperly retains money owed to the U.S. government.

2023 brought many important False Claims Act developments for companies with business involving government funds.  While overall recoveries remained down compared to pre-2022 levels, the total number of settlements and judgments exceeded any prior year.  Those settlements and judgments also highlight areas of particular focus for the Government, including cybersecurity compliance, pandemic fraud, and small business fraud, among others.  Of particular note, 2023 saw the U.S. Supreme Court issue decisions concerning the Government’s authority to dismiss qui tam actions and the critical element of scienter/knowledge that will have wide-reaching impact.  The courts of appeals also issued significant decisions on damages, materiality, and more.  Crowell attorneys discuss these highlights and others in a "Feature Comment" published in The Government Contractor.

On July 25, 2023, the U.S. Departments of Labor, Treasury, and Health and Human Services (the “Tri-Agencies”) released long awaited proposed regulations (the “Proposed Rule”) and a Technical Release, which together propose new requirements for comparative analyses of nonquantitative treatment limitations (“NQTL”) under the Mental Health Parity and Addiction Equity Act of 2008 (“MHPAEA”).  On the same day, the Tri-Agencies released their annual report to Congress on implementation of MHPAEA, as required under the Consolidated Appropriations Act, 2021 (“CAA 2021”). 

In this episode, hosts Joe Records, Payal Nanavati, and Jodi Daniel talk to three members of the health information industry regarding the Trusted Exchange Framework and Common Agreement (TEFCA) published by the Office of the National Coordinator for Health Information Technology (ONC). This episode features Jay Nakashima (Executive Director of eHealth Exchange), Nichole Sweeney (General Counsel and Chief Privacy Officer of CRISP Shared Services), and Erica Galvez (CEO of Manifest MedEx), who each share their experiences in the health information exchange industry and their expectations of TEFCA.

2022 was a busy year for the False Claims Act.  While recoveries were down, new cases reached a record mark, and settlements addressed multiple important and developing enforcement areas, from cybersecurity to small business fraud, bid rigging, Trade Agreements Act compliance, pandemic fraud, and more.  Of particular note, the U.S. Supreme Court held argument concerning the Government’s authority to dismiss qui tam actions, and it will soon hear consolidated cases as to the critical element of scienter.  And circuit courts issued key decisions involving pleading standards and merits issues.  These highlights and more are discussed by C&M attorneys in a “Feature Comment” published in The Government Contractor. 

In a prime example of the significant interplay between the Anti-Kickback Statute (“AKS”) and the False Claims Act (“FCA”), a federal jury has returned a verdict of more than $43 million in damages against Cameron-Ehlen Group, Inc., which does business as “Precision Lens,” and its owner.  The verdict in this long-running and closely watched fraud case out of the U.S. District Court for the District of Minnesota comes after a six-week trial, with the jury ultimately finding that the defendants paid kickbacks to ophthalmic surgeons to induce their use of defendants’ products in cataract surgeries reimbursed by Medicare, resulting in the submission of 64,575 false claims between 2006 and 2015.  While the jury calculated damages at the massive sum of $43 million, that number may grow exponentially after the court applies the FCA’s treble-damages calculation (increasing the liability to $129 million) and statutory penalties of between $5,500 and $11,000 for each of the 64,575 claims (resulting in additional penalties of $355 million to $710 million).  All told, the total FCA liability is expected to range between $485 million and $839 million.

The Department of Justice has announced a $14 million False Claims Act (FCA) settlement with Coloplast, a medical product manufacturer, after Coloplast self-disclosed violations of the Trade Agreements Act (TAA) and Price Reduction Clause (PRC) while under contract with the Department of Veterans Affairs (VA).  The TAA requires contractors to furnish end products that are U.S.-made or “substantially transformed” in designated countries.  Coloplast disclosed that it misapplied the substantial-transformation standard, causing Coloplast to report incorrect countries of origin for products and to improperly retain certain products on contract after manufacturing moved to non-designated countries.  Coloplast also disclosed that it overbilled the Government by failing to provide the VA with discounts pursuant to the terms of the PRC, which normally requires tracking discounts offered to designated commercial customers and offering corresponding downward price adjustments to VA customers. 

2021 was another busy year in False Claims Act enforcement and litigation. Significant decisions were issued across the circuits, spanning government dismissal authority, materiality, scienter, Rule 9(b) pleading standards, the Eighth Amendment’s Excessive Fines Clause, and more. The year also saw proposed amendments introduced by Senator Chuck Grassley aimed at strengthening the statute and overruling certain case law developments, as well as a renewed and confirmed focus on COVID-19 funding fraud enforcement and the launch of a new cybersecurity fraud initiative. These highlights are among the important developments discussed by C&M attorneys in a “Feature Comment” published in The Government Contractor.

On June 17, the U.S. Supreme Court issued an opinion in California v. Texas, holding 7-2 that a group of states and individuals lacked standing to challenge the constitutionality of the Affordable Care Act (ACA). The Court did not reach the plaintiffs’ merits arguments, which specifically challenged the constitutionality of the ACA’s individual mandate and the entirety of the Act itself.

The third year of False Claims Act (FCA) enforcement under the Trump administration was defined by a number of notable settlements, the implementation of several policy changes announced last year concerning how the Department of Justice (DOJ) will pursue (and in some instances, dismiss) cases under the FCA, and a Supreme Court decision addressing the statute of limitations circuit split. These highlights are among the important developments discussed by C&M attorneys in a “Feature Comment” published in The Government Contractor, which considers key issues impacting FCA liability, such as the increased risk associated with cybersecurity noncompliance, small business fraud, and the continued significance of materiality post-Escobar.

On December 20, 2019, President Trump signed into law the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2020. The FY 2020 NDAA includes several provisions relevant to contractors, including the development of a new cybersecurity framework applicable to the defense industrial base and pilot programs for acquisition strategy and intellectual property, among other things.

On September 12, 2019, the U.S. Court of Appeals for the Third Circuit issued an opinion in Chang, United States, and State of Delaware ex rel. v. Children’s Advocacy Center of Delaware, No. 18-2311 affirming a district court’s dismissal of a qui tam complaint without conducting an in-person hearing. Both the United States and Delaware had moved to dismiss the case, asserting that their investigations revealed that relator Weih Chang’s allegations were “factually incorrect and legally insufficient.” Although Chang did not request a hearing in his opposition to the governments’ motions, he argued on appeal that the False Claims Act (FCA) requires an in-person hearing before granting governmental motions to dismiss qui tam claims.

Deep in the Physician Fee Schedule proposed rule (the "PFS") released on July 29, 2019, CMS proposed to amend the advisory opinion regulations for the Physician Self-Referral Law, 42 U.S.C. §1395nn (the “Stark Law”). The proposal is scheduled to be published in the Federal Register on August 14, 2019, and comments from stakeholders will be due no later than October 13, 2019. 

On April 30, 2019, the Department of Justice (DOJ) Criminal Division issued an updated version of the “Evaluation of Corporate Compliance Programs” guidance originally published by the Criminal Division’s Fraud Section in February 2017. The update is more of a consolidation of various compliance program evaluation sources under the broader Criminal Division umbrella than a sweeping change in policy or philosophy, but there are some practical takeaways.

From the government’s renewed use of its dismissal authority to changes to the policy on corporate cooperation credit, the second year of False Claims Act (FCA) enforcement under the Trump administration was defined by several announcements concerning how the Department of Justice (DOJ) will pursue cases under the FCA. These policy reforms are among the many FCA developments highlighted by C&M attorneys in a "Feature Comment" published in The Government Contractor, which considers key issues such as small business fraud, materiality post-Escobar, trade and domestic preferences, and the Supreme Court’s review of a circuit split concerning the statute of limitations.

On August 24, 2018, the Department of Defense (DoD), issued a final rule that, effective immediately, removes the requirement in Defense Federal Acquisition Regulation Supplement (DFARS) 231.205–18(c)(iii)(C)(4) that major contractors conduct a formal discussion (i.e., “technical interchange”) with a DoD technical staffer prior to generating independent research and development (IR&D) costs for IR&D projects initiated in fiscal year 2017 and later, in order for those costs to be allowable. The requirement applied to major contractors, who are defined as contractors whose covered segments allocated a total of more than $11 million in IR&D and bid proposal costs to covered contracts during the preceding fiscal years. The requirement was repealed after a determination by the DoD Regulatory Reform Task Force that the DFARS requirement was unnecessary since the objective of the interchange “can be met through other means.”

On Monday, August 13, 2018, President Trump signed into law the H.R. 5515, the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (FY 2019 NDAA), the earliest an NDAA has been signed in over a decade.  The FY 2019 NDAA includes several provisions relevant to contractors, including replacing the definition of “commercial item” with “commercial product” and “commercial services,” discouraging the use of lowest price technically acceptable contracting, and a clause designed to accelerate payments to small businesses.

In Appeal of Lockheed Martin Aeronautics, ASBCA No. 61480 (a C&M case) the Board dismissed a Government claim seeking $24 million plus interest for alleged defective pricing, when the Government rescinded the underlying claim during litigation. In dismissing the appeal, the Board cited to ASBCA precedent holding that "[w]hen a contracting officer unequivocally rescinds a government claim, the government’s action moots the appeal, leaving the Board without jurisdiction to entertain the appeal further."