The False Claims Act

What is the False Claims Act?

The False Claims Act (FCA) is the federal law that criminalizes the submission of false claims by organizations that accept cash or services from federal programs. It covers most types of false claims, including falsified records, inflated invoices and the misrepresentation of eligibility information. It is one of the US government’s most effective tools against large-scale fraud.

One feature of the Act that makes it particularly effective is the qui tam provision that incentives and rewards whistleblowers.

What is Qui Tam?

The qui tam provision of the False Claims Act allows private citizens with knowledge of fraud to file on behalf of the government. This gives them the right to claim a portion of all funds that are recovered for the government. In some cases, this portion can reach into the tens of millions of dollars.

If you are considering filing a qui tam suit as a private citizen, you should consult an experienced whistleblower/False Claims Act lawyer. If you want to know more before you begin, you may find the information below helpful. It covers the history of the False Claims Act, the types of cases that fall under the FCA, and the first steps of a whistleblower case.

The History of the False Claims Act

The FCA is frequently called the “Lincoln Law” because it was originally passed during the Lincoln administration, at the direct request of Abraham Lincoln. It was passed because there were concerns that the Union Army was being defrauded by companies who took federal dollars to provide food, equipment and, supplies.

The law was initially effective. However, it underwent changes in 1943 that reduced the rewards and made it nearly impossible to file if the government had any evidence of fraud (even if it had not acted on that evidence). After that, the law was rarely used until it was amended again in 1986.

The changes were fueled by a public outcry against what appeared to be institutional fraud among military contractors. Public disclosures in the mid-80s revealed that the government had spent hundreds of dollars for common hardware store items like hammers and toilet seats.

Amendments that were made in 1986 significantly increased penalties for fraud along with the share that the whistleblower could claim by revealing it. It also further incentivized lawyers to participate in these cases by guaranteeing the payment of their hourly fees by the defendant. Finally, the amendments lowered the standard of proof that was necessary to merely file, making cases easier to bring.

The law was further strengthened and clarified in 2009 and 2010 when additional fraudulent situations were covered by the law, and the government was granted additional tools to determine the legitimacy of cases.

The current version of the law is considered quite powerful. There have been few better times in history to proceed with a case involving fraud.

Categories of Fraud

The FCA defines fraud against the government very broadly to avoid loopholes. There are few differences or special cases between different categories as many fraud cases involve more than one federal program or violation. The following informal categories cover many of the most common types of FCA cases.

• Medicare Fraud
• Hospital Fraud
• Hospice Fraud
• Pharmaceutical Fraud
• Defense Industry Fraud
• Environmental Fraud

If you would like to know more about your case, and how it should be categorized, you should speak to a whistleblower lawyer. Examples of different cases are included in the next section to give you an idea of what types of offenses are involved in successful FCA lawsuits.

How the False Claims Act is Used Today

The False Claims Act has been a part of several successful actions in recent years.

Medicare and Medicaid fraud claims were successfully resolved against the University of Washington in 2004. Employees were accused of overbilling both programs, and later with destroying evidence related to the fraud. The case against the university was brought by a whistleblower, who was awarded $7.25 million of the $35 million that was recovered.

Hospital fraud claims were brought against Health Management Associates LLC for the practice of paying kickbacks to doctors who went along with a scheme to bill outpatient procedures as inpatient procedures and to inflate the costs of emergency services. Eight whistleblowers split an award of more than $27 million dollars.

Pharmaceutical fraud claims were brought against the drug wholesaler AmerisourceBergen over the practice repackaging drugs to create the appearance of additional doses, and billing healthcare programs for more than they received. When the case was resolved in 2018, The four named whistleblowers were awarded more than $93 million of the $625 million that was recovered.

How to Begin a Whistleblower Lawsuit

If you have knowledge of fraud against the government, you may be able to file a lawsuit and claim a percentage of any funds that are recovered. Because of the complexity of these cases, it’s wise to work with a lawyer who has extensive experience with whistleblower lawsuits.

Your first step should be to schedule a consultation where you can discuss your standing to file, the quality of the evidence that you’ve collected, and whether the fraud fits within the statute of limitations. Your lawyer will be able to help you complete the next steps, and help you understand how long you can expect the case to take.

You should file quickly after you have evidence of fraud. You can lose your standing to file if the fraud becomes public before you have started your case, or if some other person files a case involving the same fraud before you.