False Claims Act

Trust and security are watchdogs of a quality health care system. When establishing a healthcare organization, there is implied accountability, transparency, and responsibility to all business transactions, including hospital billings, medical necessities, health care policies, and all healthcare-related matters that involve a patient’s welfare.

As the American health care system strives to become the world’s leading medical service provider, the prevalence of medicare fraud fades the future at stake. 

Just imagine how many billions of dollars and millions of lives suffered and wasted due to the malevolence of medical health care fraud. According to a study conducted by the researchers of Johns Hopkins Bloomberg School of Public health, fraud and abuse contributed to 6,700 premature deaths in 2013. Researchers tracked mortality and hospitalization for up to three years. They found out that 14.8% of patients are more likely to die as treated by fraudulent providers.

Medical fraud, too, is discriminating against race and ethnicity.  Fraudsters have been targetting most vulnerable populations, including the low-income, non-white, dual-eligible (in Medicare and Medicaid), and the disabled. Every year, the Department of Justice accounts for 30 billion to 140 billion dollars for fraudulent medical practices by attacking government services. 

Let this serve as your wake you let this medical fraud issue leave in silence, then more and more voices will be oppressed, including yours. 

This article will back-up your protection through understanding the existing law called the False Claims Act. 

What is the False Claims Act?

The False Claims Act (FCA) is a federal law that criminalizes any health care organization or health care service provider suspected to commit reckless ignorance, in making a false record, or filing a false claim to any healthcare programs funded by the U.S. government. 

Any violation of the False Claims Act bears both civil and criminal penalties. In civil liabilities, a false claim carries civil damages, particularly involving health care contracts. If the injured party affirms and showed reasonable reliance that the contract provides misstatement of facts, then the party gets the “the benefits of the bargain.” Likewise, in criminal liabilities, a false claim violates the Criminal Health Care Fraud Statute, where a person has deliberately committed to defraud any healthcare benefit program or used false statements to obtain funds held by a federal health care program.

Ultimately,  FCA empowers a whistleblower, an individual working inside or outside a healthcare organization, to file a lawsuit helping the government. In other words, your employee or your patient may bring a lawsuit against your hidden fraudulent healthcare agenda. 

How did False Claim Acts start?

During the Civil War, some companies were trading and selling ailing mules, defective weapons, and spoiled foods to the Union Army, the land force that fought to preserve the Union of the collective states. These issues became talk-of-the-town and caught the attention of President Abraham Lincoln’s administration. Thus, to empower private citizens in combating fraud against the government, the 39th U.S. Congress legislated False Claims Act, or also known as the Lincoln Law.

In 1943, the public had shown distressed on the recoveries of undeserving relators who impede the federal law enforcement. That’s why the Congress amended the FCA to standardize the process of a relator’s claims and reduce a relator’s share in the event of a successful suit. 

The desired effect of prosecuting fraudulent activities remained to be the spirit of the law. From 1943 until 1986, the FCA set a jurisdictional bar by foreclosing fraud detection and enforcement. In 1986, the Congress, spearheaded by Sen. Chuck Grassley, fortified the FCA by provisional amendments, such as providing a specific preponderance-of-the-evidence burden of proof standard, adding a revised jurisdictional bar for Qui Tam suits based on matters of public knowledge, and creating an explicit cause of action for retaliation against whistleblowers and reverse false claims.

Today, the FCA has helped private citizens in purging out fraudulent activities with the aid of different government agencies, including the Food and Drug Administration (FDA), Centers for Medicare and Medicaid Services, and the Department of Education. 

How do you establish a False Claim? 

Section 3729, Title 31 of the U.S. Code, provides the prohibition of False Claims.

The statute prohibits “(A) knowingly presenting, or causing to be presented, a false or fraudulent claim for payment or approval; and (B) knowingly making, using, or causing to be made or used, a false record or statement to a false or fraudulent claim.”

In the landmark case of United States v. The Boeing Company, the Supreme Court promulgated a decision, establishing the elements of a false claim by a preponderance of the evidence, that:

(1) The defendant submitted a claim that involved the state to pay money on a claim; 

(2) The claim was false or fraudulent; and

(3) The defendant knew that the claim was false.

As a general rule, the criteria of intent for a false claim should qualify two essential requisites – the negligent misrepresentation and the reasonable reliance

First, negligent misrepresentation requires you to prove that the defendant meant to induce action, influenced by some particular individuals, in reliance upon a false statement. 

Second, reasonable reliance must prove that the injured party relied on a misrepresentation, allowing him to enter into a contract or other transaction in all reasonable probability, such as a promise of a benefit or a profit. 

What are the types of false claims specifically prohibited by the False Claims Act?

(1) Express Legal Falsity (Factually False Claim)

A factually false claim refers to the overt and obvious fraud claims of a contractor who failed to comply with the government all the requirements for the goods and services stipulated in an agreement.

For example, an express legal falsity arises when a health care company was billing for services not rendered or products not delivered, or misrepresenting the nature of the patient’s condition.

(2) Legal Falsity (False Certification) 

A false certification may either be expressed or implied:

Express False Certification

Express false certification manifests when a claimant expressly asserted that he has complied with a statute, regulation, or contractual, but failed to provide the actual material.

Implied False Certification

Implied false certification occurs when a defendant recklessly ignores to disclose his noncompliance with a statutory, regulatory, or contractual requirement, and submitted a claim for payment that makes specific representations on the goods or services he provided. 

In other words, when a defendant submits a claim for reimbursement, it implies a direct compliance with governing federal rules precondition to payment. 

Further, implied false certification also involves a relevant connection to the precise time of the issuance of the contract. 

For instance, a defendant may argue that he obtained an express  on compliance with certain conditions of a state-sponsored health care program, but at the precise time he complied with his expressed certification, he failed to comply with statutory requirements due to his reckless ignorance.  

(3) Grant Assurance

Under the False Claim Act, a grant assurance for federal funds amounts to a claim, where representations made in progress may trigger the payment of grant funds. 

(4) Promissory Fraud

A promissory fraud has mutual distinctions with expressly false certifications. However, this type of false claim shows that a defendant originally obtained false statements in the contract and benefited him for government services. Otherwise stated,  a defendant must fraudulently induce a party under a promissory fraud. 

As held in the case of William Thomas v. Siemens AG, our Supreme Court held that a relator must show that a false statement, omission, or representation, has induced or caused the government to enter into a contract – such that the government would not have awarded the contract if not for the misrepresentations.

What is the role of a Whistleblower in the False Claims Act?

A whistleblower is a person-in-interest who reports an organization’s abuse, such as fraudulent activities, graft and corruption, and inimical acts contrary to the public welfare.

A whistleblower has firsthand experience of the malpractices that an organization has committed. He usually works inside the organization. However, it doesn’t follow that he takes part, or contributes to, the success of a fraudulent activity. Hence, a whistleblower aims to disclose relevant information that wouldn’t be known by the public.

A whistleblower can help the government and the healthcare organizations in three vital ways. That, a whistleblower:

(1) Reports the health care fraud committed inside the organization;

(2) Reports the health care fraud committed outside the organization; and

(3) Encourages other whistleblowers to speak up.

How can whistleblowers successfully establish a valid claim?

The FCA provides elements to qualify for a whistleblower’s claim.

1st. Proven knowledge of a fraud activity

Whistleblowers should know about the fraudulent activity, not just a mere suspicion or hearsay. The law requires that a whistleblower should find prima facie insights with proven facts.

2nd. Evidence should be private and primary sources.

Whistleblowers should provide private and primary sources of evidence. Meaning, he should not present any evidence connected with public sources, including newspapers, TV, magazine, radio, and court records.

3rd. Fraud inducement should present knowledge and will.

A person or an organization, who submitted fraudulent claims to the federal government, must have done the fraudulent inducement with knowledge and will.

4th. Qui tam lawsuit should be filed within six years 

Lastly, whistleblowers must file the qui tam lawsuit within six years after the defendant committed the FCA violation. Remember, the law has a strict six-year limitation, where it assumes that the qui tam whistleblower or the government knows the violation. 

If you are a qui tam whistleblower, Khouri Law advises you to identify the proper date of when the defendant has committed the violation. Most courts ascertain the date of submission versus the six-year statute of limitations. 

If you have concerns, contact a medicare fraud attorney today!

How can False Claim Acts protect private whistleblowers?

The spirit and the letters of the False Claim Act highly encourage private citizens to act as whistleblowers when they suspect fraud on the government. Hence, the False Claims Act Retaliation Provision protects employees, contractors, or other agents of a company from being “discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment by his or her employer.” 

The FCA law provides a set of grounds to prove that a company has retaliated against an employee, contractor, or other agents. An individual must demonstrate that he has engaged in “protected activity” and was discriminated against thereof.

To demonstrate that the discrimination towards an individual who engaged in “protected activity,” he must show that his company knew that he squares from fraudulent claims, resulting in an outward retaliation. 

What are the remedies or damages can a whistleblower recover under the False Claims Act?

Under the anti-retaliation provision of the False Claims Act, a whistleblower who wins the case may recover:

(1) reinstatement; 

(2) double back pay, plus interest

(3) special damages, which include litigation costs, reasonable attorney’s fees, lost future earnings, emotional distress, and punitive damages.

In cases of False Claims, where can I ask for legal assistance?

free consultation with medicare fraud defense team

Honed by solid legal background and proven results in healthcare fraud litigation, the Khouri Law firm has leading legal experts for false claim recovery.

Our experienced whistleblower lawyers have represented cases in qui tam lawsuits, whistleblower rewards, and protection laws. For 20 years in the legal profession, we have won cases with whistleblowers who have identified fraud against the government.

More than our name and reputation, the counsels of Khouri Law ensure to represent you and your company in fraud claims, securing your financial interests.

Contact our medicare fraud lawyers today!

What is a Qui Tam Lawsuit?

Under the False Claims Act, an individual with information about fraudulent activities against the government may become a whistleblower and bring a qui tam lawsuit

Qui tam means “in the name of the king.”

In qui tam actions, the government has the right to intervene and join the action. Also, it allows persons and other involved entities to join with evidence of fraud against federal programs or contracts, to sue fraudsters on behalf of the U.S. government.

Qui tam lawsuits are powerful legal remedies for private whistleblowers to eradicate and punish any kind of fraud and to recover money for the U.S. Treasury and American taxpayers. 

To ensure that you have a good qui tam whistleblower case before taking legal action, make sure that you follow this criteria set by FCA law:

(1) There is a significant amount of money at stake;

(2) You have documents based on the preponderance of the evidence that convinces the fraudulent activities;

(3) You have a first-hand knowledge of the fraudulent activities; and 

(4) Your qui tam claim squares within the FCA’s statute of limitations. 

What will you get when you recover a fraudulent claim? 

The law provides that you are eligible to receive 10% to 30% of the recovery. 

If the government intervened in a recovery case, you can obtain 15% to 25% of the recovery, depending upon your efforts on substantially prosecuting the action. Otherwise, if there’s no government intervention, you can obtain 25% to 30% of the recovery. 

How can a whistleblower file for a qui tam lawsuit?

1st. You need to find a fraud attorney

A fraud attorney files the qui tam lawsuit on behalf of the whistleblowers/relators. By establishing elements of a whistleblower claim, and sufficing the criteria set by the FCA Law on qui tam lawsuits, your fraud attorney advances the legal process to the government. 

2nd. The government will assess the facts of the case.

The government shall assess the fact of the case. Here, they will decide whether to decline or proceed with the intervention. 

If the government chooses not to intervene, then it is because of the lack of resources, or the case doesn’t merit any financial threshold. Still, you can advance your case without the government’s intervention as provided under the FCA law. 

3rd. Provide a disclosure statement.

The disclosure statement is the most essential document for a successful qui tam lawsuit. Under Sec.3730, par. (b)(2) of the False Claims Act, a whistleblower must provide a “written disclosure of substantially all material evidence and information” possessed. 

The goal of the disclosure statement enables the government to investigate the merits of the case, specifically in identifying the whistleblower’s source of information. 

4th. File a suit under seal.

During the amendments of the 1986 FCA law, Congress encouraged more private suits against fraudulent transactions by adding seal requirements. However, the government noticed that FCA suits might forewarn defendants of the potential criminal investigations.

Filing a suit under seal means that the government has an opportunity to intervene, to dismiss, or to settle the case with the defendant before any formal investigation for sixty days.

Hence, failure to comply with the seal requirements can result in irreversible damage to parties under the court’s decision. The dismissal of the case is not automatic, especially if the error is curable. The dismissal depends on the statutory authority where courts must balance the following three factors:

(1) The scope of damages to the government;

(2) The nature of the violation; and

(3) The intent or the will involved to commit a violation. 

Key Takeaways

The United States has brilliant, world-class laws that protect and promote human rights and welfare. However, the greater our nation is, the lesser our law enforcement becomes. 

Despite the prevalence of fraud activities in healthcare systems, your desire for a better future is not at stake because of the False Claims Act, or also known as the Lincoln Law. 

The False Claims Act (FCA) is America’s first whistleblower law and one of the strongest whistleblower laws in the United States. It is a federal law that criminalizes any health care organization or health care service provider suspected to commit reckless ignorance, in making a false record, or filing a false claim to any healthcare programs funded by the U.S. government. 

Because of its legal advocacy to eradicate and mitigate the rising cases of fraudulent activities against the government, it has enabled private whistleblowers to serve as watchdogs for the trust and security for all healthcare transactions. 

Let the False Claims Act help your cause for a wake up call – to think about your future, your family, and your protection. If you let this medical fraud issue leave in silence, then more and more voices will be oppressed, including yours. 

Should you want to expose an unsolicited transaction? Make a noise! Call us now