Going to Trial in a False Claims Act Case

A hospital, pharmacy, or physician practice facing a False Claims Act allegation settles in the overwhelming majority of cases, and the trial math explains why. In fiscal year 2025, relators filed 1,297 new qui tam lawsuits, the Department of Justice opened 401 new investigations, and only two matters reached a jury verdict, together accounting for more than 44% of that year's healthcare fraud recoveries. Every other open matter resolved short of trial. For a compliance officer weighing exposure, that imbalance is the whole story: trials are rare, but the two that happened moved more money than nearly everything else in the docket combined.

Why Nearly Every False Claims Act Case Settles

The numbers reflect the incentives on both sides. The government would rather secure an immediate, certain recovery through settlement than gamble years of litigation on a jury outcome, and the defendant would rather negotiate a number down than risk penalties a loss at trial multiplies automatically. Discovery alone is expensive and invasive, often running into seven figures before a courtroom is booked. Add the reputational cost of a public trial, and settlement becomes the default outcome long before a complaint is unsealed.

What a Jury Actually Decides

When a case does reach a jury, the instructions center on four elements. First, falsity: whether the claim submitted to Medicare, Medicaid, or another federal program was factually or legally false. Second, materiality: whether the falsity was capable of influencing the government's payment decision, the standard the Supreme Court set in Universal Health Services v. Escobar (2016), which the Court described as demanding and rejected any theory that minor or technical noncompliance is enough. Third, knowledge, the FCA's scienter requirement, met by actual knowledge, deliberate ignorance, or reckless disregard, not an honest billing mistake. Fourth, damages, the government's actual loss. Once a jury finds liability on all four elements, the multipliers described below apply automatically.

The Cost of Losing at Trial

A verdict does more than establish liability: it triggers the statute's damages formula automatically. The False Claims Act trebles the government's actual damages and adds a per-claim penalty currently set between $14,308 and $28,619 per false claim, adjusted annually for inflation and stacked on top of the trebled amount. In a case built on thousands of individual claims, as our companion piece on statistical sampling in FCA cases explains, the per-claim penalty alone can exceed the underlying damages several times over. A civil judgment at trial also exposes the defendant to permissive OIG exclusion from federal healthcare programs, a significant practical obstacle for a pharmacy or practice that bills Medicare or Medicaid, and typically leads to a corporate integrity agreement as the price of remaining in the program.

A settlement negotiates the damages multiplier and the per-claim penalty down to a number a practice can survive; a trial verdict imposes both automatically, with no room to negotiate afterward.

The Settlement Calculus

The decision to try a False Claims Act case instead of settling weighs several factors against each other: the exposure above, the near-certain OIG exclusion risk, the cost of years of litigation, and whatever precedent value either side sees in a published verdict. A defendant with a strong challenge to the government's sampling methodology may hold a stronger negotiating position. A provider that identifies an overpayment before the government does has an entirely different set of options; our guide to the 60-day overpayment rule covers how repayment inside the statutory window can avoid False Claims Act exposure altogether. Once a matter is in litigation, how a corporate integrity agreement gets negotiated is shaped as much by the strength of the government's proof as by the dollar figure in the complaint.

Why Early Legal Counsel Is Critical

It is critical that healthcare providers and compliance officers promptly retain experienced healthcare defense counsel upon receiving a civil investigative demand, a qui tam complaint, or any other indication of False Claims Act exposure. Early legal intervention can protect the provider's rights, evaluate the government's damages and sampling methodology before a position hardens, avoid inadvertent admissions, and preserve the negotiating room that narrows the longer a matter proceeds without counsel. Delaying legal representation can significantly affect whether a matter resolves on manageable terms or proceeds toward trial exposure.

How Health Law Alliance Can Help

Health Law Alliance defends healthcare providers through every stage of a False Claims Act matter, from the first civil investigative demand through the decision of whether a case should settle or proceed to trial. Our bench includes a former federal prosecutor and a former senior healthcare compliance executive, background that shapes how we evaluate the government's damages theory, materiality position, and trial risk before recommending a course. If your practice is facing a qui tam suit or a government-initiated False Claims Act investigation, contact us for a free, confidential consultation.