While defendants typically breathe a sigh of relief when the Department of Justice (DOJ) declines to intervene in a qui tam False Claims Act (FCA) case, a more favorable outcome is by no means guaranteed when the relator takes the lead in the litigation. One settlement in 2022 underscored that fact when the parties settled for $900 million to resolve FCA allegations related to purported kickbacks offered or paid by a pharmaceutical company through its speaker programs. After litigating the case for over seven years, the relator, a former employee, agreed to a settlement and received 29.6 percent of the $900 million, which is reportedly the largest settlement ever paid in a declined case.

As we predicted, DOJ’s pursuit of electronic health record (EHR) technology vendors continued in 2022, and DOJ continued to focus on EHR vendors’ sales and marketing practices. The latest EHR vendor to settle a FCA case was Modernizing Medicine Inc. (ModMed), which agreed to pay $45 million to resolve allegations that it violated the FCA by accepting and providing kickbacks in exchange for referrals and by causing its users to report inaccurate information in connection with claims for federal incentive payments. This settlement marks the fourth EHR vendor settlement for the Vermont U.S. Attorney’s Office, and it is noteworthy for at least two reasons. First, this case marks the first in which the government has alleged that an EHR vendor accepted kickbacks in return for helping to...

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