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|Healthcare Fraud
Last Updated: May 17, 2024
Legally Reviewed by:
David Di Pietro
Managing Partner, Healthcare Fraud Attorney

Di Pietro Partner's goal is to advocate for you when you need our help. Our team of experienced legal and medical professionals are dedicated to providing high quality informative content. The information on this page and other areas on the website is routinely fact checked, updated, and approved by our team of licensed attorneys and professional editors. If you find any errors, feel free to let us know and we will review the information immediately.

What Is The False Claims Act in Healthcare

The False Claims Act (FCA) is the most successful anti-fraud law in the United States. This federal statute was enacted to protect the public FISC by encouraging private citizens to expose fraud involving federally funded contracts or programs, such as Medicare and Medicaid.

It’s important to note that information within this page can help guide someone in the right direction and answer general questions; however, this is not a substitute for professional legal advice. Consulting with a healthcare fraud attorney is not only advised, but required when dealing with matters related to reporting fraudulent activity within the government’s healthcare system.

A healthcare fraud attorney holding up a copy of the False Claim Act in court

False Claim Act Overview

The False Claims Act (FCA) serves as a powerful tool in the U.S. legal framework, designed to combat fraud against federal programs and contracts. Central to the act are its qui tam provisions, which empower whistleblowers to file lawsuits on behalf of the government against entities that defraud it. Here are the key elements and protections provided under the FCA:

Whistleblower Incentives: Individuals who expose fraud and bring successful qui tam cases under the False Claims Act are entitled to a significant portion of the recovery. These rewards typically range from 15 percent to 30 percent of the total amount recouped by the government, providing a substantial incentive for whistleblowers to report fraudulent activities.

Liabilities for Offenders: Entities found guilty of defrauding the government are subject to severe penalties under the FCA. This includes treble (triple) damages, which multiplies the actual damages sustained by the government by three, and additional penalties for each instance of a false claim submitted. These stringent penalties aim to deter fraud and ensure that perpetrators face substantial consequences for their actions.

Protection Against Retaliation: The FCA provides robust protections for whistleblowers against employer retaliation. If a whistleblower faces adverse actions such as discharge, demotion, suspension, threats, harassment, or any form of discrimination for participating in a qui tam action, they are entitled to remedies. These remedies include reinstatement with the same seniority status, double back pay, interest on back pay, and compensation for any other damages such as litigation costs and reasonable attorneys’ fees.

Role in Legal Proceedings: Whistleblowers, or relators, can continue to participate in the legal proceedings even if the government decides to intervene and take over the qui tam lawsuit. This ongoing involvement allows whistleblowers to remain active participants in pursuing the case against the defendant.

False Claim Act Definitions

To help readers better understand the context of the article, here are some of the most common terms found within this content and/or used in the context of The False Claims Act (FCA).

Claim: Any request or demand, whether under a contract or otherwise, for money or property and whether or not the United States has title to the money or property, which is presented to an officer, employee, or agent of the United States.

Knowing and Knowingly: These terms imply that a person, with respect to information, has actual knowledge of the information; acts in deliberate ignorance of the truth or falsity of the information; or acts in reckless disregard of the truth or falsity of the information. Importantly, no proof of specific intent to defraud is required.

Qui Tam: A provision that allows a private individual, known as a “relator” or whistleblower, to file an action on behalf of the U.S. government. The whistleblower may be entitled to a percentage of the recovery.

Material: The term material refers to having a natural tendency to influence, or be capable of influencing, the payment or receipt of money or property.

False Record or Statement: Any false record, statement, or certification made to get a fraudulent claim paid or approved by the government.

Obligation: An established duty, whether or not fixed, arising from an express or implied contractual, grantor-grantee, or licensor-licensee relationship, from a fee-based or similar relationship, from statute or regulation, or from the retention of any overpayment.

Government Money or Property: Any U.S. government funds, whether administered by the government itself or by a contractor on behalf of the government, or any funds of any state or municipality that are provided by the federal government.

Lincoln Law: The Lincoln Law is another name for the False Claims Act (FCA), which was first enacted during the presidency of Abraham Lincoln. The law was created to combat fraud by suppliers to the Union during the Civil War. It includes provisions that allow private citizens to sue on behalf of the government (qui tam actions) for false claims and to share in any monetary recovery.

Healthcare Fraud: Healthcare Fraud involves filing dishonest health care claims to turn a profit. This fraudulent activity can include billing for services that were never rendered, billing for more expensive services than those actually provided (upcoding), performing medically unnecessary services for the purpose of obtaining insurance payments, and many other deceitful practices. Healthcare fraud is not only a federal crime but also a serious drain on the state and federal resources dedicated to healthcare.

Medicare Fraud: Medicare Fraud is a specific type of healthcare fraud involving the Medicare system, a federal program that provides health insurance to people over 65 years of age, certain younger people with disabilities, and people with End-Stage Renal Disease. Examples of Medicare fraud include knowingly billing the program for unauthorized or fake services, supplying unnecessary medical equipment or services, and using false information to solicit Medicare beneficiaries.

Medicaid Fraud: Medicaid Fraud similarly involves the illegal exploitation of the Medicaid program, which is funded jointly by the state and federal governments to assist with medical costs for some people with limited income and resources.

Whistleblower: A Whistleblower is an individual who exposes information or activities that are deemed illegal, unethical, or not correct within an organization that is either private or public. In the context of the False Claims Act, whistleblowers can report fraud against federal programs or contracts, such as fraud involving Medicare or Medicaid.

History of The False Claims Act (The Lincoln Law)

The False Claims Act, colloquially known as the Lincoln Law, has its roots deeply embedded in historical legal practices that date back to the Middle Ages in England. During this period, the king lacked a formal police force to enforce laws and thus relied on private citizens to act as prosecutors.

These individuals were empowered to bring forth what were known as “qui tam” cases, a term derived from the Latin phrase “qui tam pro domino rege quam pro se ipso in hac parte sequitur,” translating to “he who brings an action for the king as well as for himself.” Successful plaintiffs in such cases were rewarded with a bounty, aligning private interests with public justice.

This mechanism of incentivizing private enforcement of public laws was carried over to the American colonies. The First Continental Congress enacted several laws incorporating qui tam provisions to uphold public order and fiscal responsibility. However, it was during the Civil War that the need for a robust legal framework to combat fraud against the government became painfully apparent, leading to the enactment of the modern False Claims Act in 1863.

Amidst the Civil War, rampant fraud by suppliers to the Union Army, including selling faulty equipment like boxes filled with sawdust instead of guns, and repeatedly swindling the army by reselling decrepit horses, underscored the urgency for stringent measures. War profiteers exploited the government’s dire need for military supplies, with one boasting about the ease of overcharging and deceiving the government. In response to such widespread fraud, President Abraham Lincoln championed the passage of the False Claims Act, aiming to protect government expenditures and maintain integrity in wartime contracting.

The Act was revolutionary in its incorporation of qui tam provisions, allowing private citizens, known as “relators,” to sue on behalf of the government for fraudulent claims made by entities and individuals. This not only helped expose fraud that might otherwise have gone undetected but also significantly deterred corrupt practices by imposing severe penalties. Initially, the Act stipulated wrongdoers pay double the damages and a civil fine of $2,000 for each false claim, with relators entitled to 50 percent of the recovered amount.

Through the years, the False Claims Act has undergone several amendments to enhance its effectiveness, but its core principle of empowering private citizens to act as watchdogs on behalf of the government remains intact. Today, it stands as a critical tool in the United States’ efforts to combat fraud, particularly in sectors like healthcare and defense contracting, ensuring that federal funds are used appropriately and ethically.

What Is Healthcare Fraud/Abuse?

Healthcare fraud and abuse encompass a range of deceptive practices carried out by individuals or institutions within the healthcare system to illicitly gain from insurance or government programs. These acts not only contravene federal and state laws but significantly undermine the financial stability of healthcare programs, ultimately affecting the quality and accessibility of medical care for all.

Fraud in healthcare includes several specific activities, such as billing for services that were never rendered. In such cases, practitioners may submit claims to insurers for procedures that they did not actually perform, or fabricate patient records to support nonexistent care. Another common form of fraud is upcoding, where healthcare providers bill for a more expensive service than the one provided. For example, a simple medical checkup could be billed as a more comprehensive examination, which costs more.

Additionally, performing medically unnecessary services for the purpose of obtaining insurance payments is a particularly egregious form of healthcare fraud. This not only leads to unnecessary healthcare spending but also potentially endangers patients’ health by exposing them to unwarranted procedures.

Beyond these, healthcare fraud can include other deceitful practices such as billing each step of a procedure as if it were a separate procedure, accepting kickbacks for patient referrals, or billing a patient more than the co-pay amount for services that were prepaid or paid in full by the benefit plan under the terms of a managed care contract.

Healthcare fraud is vigorously prosecuted under various federal and state laws, including the False Claims Act, which allows whistleblowers to bring suit on behalf of the government in cases of healthcare fraud against government programs; two of the more common examples of this are bv Medicare fraud or Medicaid fraud.

The repercussions of healthcare fraud extend beyond legal penalties and financial losses to the government and insurers. It erodes trust in the healthcare system, increases the cost of healthcare services, and diverts resources from patients who need legitimate medical care. Tackling healthcare fraud is therefore not just about curbing illegal financial gain but also about safeguarding the integrity of healthcare services and ensuring they are used appropriately and beneficially.

False Claims Act Whistleblower Protections

Taking the step to report fraud against the government is a bold move, and the False Claims Act (FCA) provides robust protections for whistleblowers to encourage transparency and honesty. Understanding these protections can help reassure anyone considering reporting fraud that their rights will be safeguarded.

Confidentiality: Initially, your identity as a whistleblower can remain confidential, especially during the government’s investigation of your claims. This helps protect you from potential backlash while the case is being reviewed.

Anti-Retaliation Measures: The FCA specifically protects whistleblowers from retaliation by employers. If you face harassment, demotion, suspension, threats, or any form of discrimination due to your whistleblowing activities, the law is on your side. You can seek remedies such as reinstatement to your former position, compensation for lost wages, and other damages related to the retaliation.

Legal Rights and Support: Whistleblowers have the right to legal representation, and it’s wise to utilize this. An attorney who specializes in whistleblower cases under the FCA can provide invaluable support, navigating the complexities of the law and ensuring your rights are fully protected throughout the process.

These protections are designed to make whistleblowers feel safe and supported, ensuring that they can report wrongdoing without fear of losing their job or suffering other consequences. If you’re considering blowing the whistle on fraud, these protections under the FCA are your shield, ensuring that you can act in the public interest without undue risk to yourself.

What Are False Claims Act Violations?

Violations under the False Claims Act (FCA) occur when individuals or entities deceive the federal government to secure improper payment or to avoid disbursing funds owed to the government. These violations can manifest in various forms, each undermining the integrity of federal programs and financial systems. Here’s a concise breakdown of the typical types of violations:

Presentation of a False Claim: This is one of the most straightforward violations of the FCA. It occurs when an individual or entity knowingly submits a false or fraudulent claim for payment to the government. This could involve billing for medical services not rendered or charging for goods never delivered.

Use of False Statements: This violation involves making or using false statements material to a false or fraudulent claim. Essentially, it’s not just about submitting false claims, but also about fabricating or altering information to support those claims. This can include falsifying records or making false certifications about the quality or origin of a product being sold to the government.

Reverse False Claims: This type of violation addresses the scenario where entities or individuals improperly avoid paying funds they owe to the government. A common example is when a company knowingly makes false statements that decrease the amount of money they should pay the government, such as during an audit. Another instance is failing to return overpayments discovered in accounts, essentially keeping funds that are not rightfully theirs.

Each of these actions not only results in undue financial gains or savings for the perpetrators but also significant losses for the government. The False Claims Act is designed to combat these practices by imposing liabilities on the wrongdoers and incentivizing whistleblowers to come forward with information about such fraudulent activities. This framework helps maintain the accountability and efficiency of government spending, ensuring that taxpayer money is used appropriately.

False Claims Act Litigation

Litigation under the False Claims Act (FCA) is a critical mechanism for addressing and redressing fraudulent activities against the federal government. This type of litigation typically involves complex legal proceedings, which can be initiated by the government itself or by private individuals acting as whistleblowers (also known as “relators”). Here’s an overview of the key aspects of False Claims Act litigation:

Initiation of Claims: FCA litigation often begins with a whistleblower filing a qui tam lawsuit confidentially, allowing the government to investigate the allegations discreetly before deciding whether to intervene. This period of investigation is crucial, as it determines the substance and potential impact of the case. Whistleblowers play a vital role here, providing insider knowledge and evidence that might otherwise remain hidden.

Government Intervention: Once a qui tam lawsuit is filed, the government evaluates the information and evidence provided to decide whether to take over the prosecution of the case. If the government intervenes, it leads the litigation, though the whistleblower can still remain involved and continue to provide assistance. If the government declines to intervene, the whistleblower has the right to continue the case on their own.

Litigation Process: False Claims Act cases can be lengthy and complex, involving substantial document discovery, expert testimony, and intricate legal arguments. These cases often hinge on demonstrating the defendant’s knowledge of the fraud, the materiality of the false claims, and the actual harm or potential risk to government funds.

Settlements and Judgments: Many FCA cases are resolved through settlements, where the defendant agrees to pay a certain amount to avoid the conclusion of the trial process. Settlements benefit all parties by reducing the costs and uncertainties of continued litigation. However, if a settlement isn’t reached, the case proceeds to trial, where it will be decided by a judge or jury. Judgments in FCA cases can result in significant penalties, including treble damages and penalties per false claim.

Relief and Penalties: Defendants found liable under the FCA can face substantial financial penalties, including three times the government’s losses plus additional penalties for each false claim. For whistleblowers, successful litigation can result in a reward of 15% to 30% of the recovery if the government intervened, and up to 30% if they proceeded without government intervention.

Protection for Whistleblowers: An essential element of FCA litigation is the protection it offers whistleblowers. The FCA includes provisions to shield whistleblowers from retaliation, such as job termination, demotion, or harassment, providing remedies like job reinstatement, back pay, and compensation for any damages incurred.

False Claims Act litigation serves as a powerful deterrent against fraud on government programs and contracts, ensuring that entities think twice before misappropriating public funds. Through these legal proceedings, the Act not only recovers funds for the government but also holds wrongdoers accountable for their actions, thus upholding the integrity of government expenditures.

False Claim Act FAQ

Q. What is the main purpose of the false claims act?
The main purpose of the False Claims Act (FCA) is to combat and deter fraud against federal programs and contracts. It provides a legal mechanism for the government to recover funds that have been falsely or fraudulently claimed by individuals or entities. Additionally, it includes provisions that encourage whistleblowers to come forward with information about misconduct involving government funds, by offering them a portion of the recovered damages as a reward.

Q. When was the false claims act enacted?
The False Claims Act was originally enacted during the American Civil War on March 2, 1863. It was signed into law by President Abraham Lincoln in response to defense contractor frauds, where suppliers to the Union Army were found to be delivering faulty materials and goods. The law has been amended several times since its original enactment to enhance its effectiveness and broaden its scope.

Q. What is the Whistleblower provision of the false claims act?
The whistleblower provision of the False Claims Act, also known as the “qui tam” provision, allows private individuals, known as “relators” or whistleblowers, to sue on behalf of the United States government for false claims. If the lawsuit is successful, the whistleblower can receive between 15% and 30% of the recovered amount. This provision is crucial as it empowers individuals with insider knowledge to come forward without waiting for the government to initiate action, thereby playing a significant role in uncovering and prosecuting fraud.

Q. Who does the false claims act protect?
The False Claims Act protects the federal government from being overcharged or sold substandard goods and services. It safeguards government expenditure and ensures that the government receives value for its money. Additionally, the Act also protects whistleblowers from retaliation. Individuals who report fraud involving government funds are shielded from adverse employment actions such as termination, demotion, suspension, threats, harassment, and other forms of discrimination as a result of their whistleblowing activities. This protection is crucial to encourage more individuals to come forward with information about fraud against the government.

Q. What does ‘qui tam’ mean?
Qui tam is a provision of the False Claims Act that allows a private individual to file a lawsuit on behalf of the U.S. government. The term comes from the Latin phrase “qui tam pro domino rege quam pro se ipso in hac parte sequitur,” meaning “he who sues in this matter for the king as well as for himself.

Q. What kinds of actions constitute a violation of the False Claims Act?
Common violations include knowingly submitting false claims to the government, making false records to get a false claim paid, and conspiring to defraud the government by getting a false claim paid.

Q. How does the government decide whether to intervene in a qui tam lawsuit?
After a whistleblower files a qui tam complaint, the government investigates the allegations, usually under seal. Based on the evidence, the government will decide whether to intervene and take over the prosecution of the case or allow the whistleblower to proceed alone.

Q. Can False Claims Act cases be settled?
Yes, many FCA cases are settled before reaching trial. Settlements can result in significant recoveries for the government and awards for whistleblowers while avoiding the uncertainty of a trial.

Q. What are the penalties for violating the False Claims Act?
Entities found liable under the False Claims Act (FCA) may face severe penalties, which include treble (triple) damages based on the amount the government was defrauded, and additional fines ranging from $11,665 to $23,331 for each false claim submitted, as adjusted for inflation. These stringent penalties are designed to deter fraudulent activities and compensate the government for the losses incurred due to the fraud, as well as the additional costs of investigating and prosecuting the fraudulent acts.

Q. Why do you need an attorney to report false claims act violations?
Reporting violations under the False Claims Act (FCA) often requires an attorney due to the legal complexities and procedural nuances involved. An experienced attorney can effectively navigate the specific requirements and deadlines set by the FCA, ensuring that your claim is filed accurately and efficiently. Additionally, an attorney plays a critical role in protecting your rights as a whistleblower, offering legal protection against potential retaliation, and helping secure any entitled rewards. Given the high stakes and potential legal ramifications of FCA cases, having legal representation is essential for providing the expertise and advocacy needed to manage the challenges of these claims.

False Claim Act Statutes

The False Claims Act (FCA), codified at 31 U.S.C. §§ 3729 – 3733, comprises several key statutes that outline the provisions, liabilities, and procedures related to combating fraud against the federal government. Here’s a comprehensive list of the main statutes within the False Claims Act:

31 U.S.C. § 3729 – False Claims:

This section defines the liability for the actual submission of false claims to the government. It states that any person who knowingly submits a false claim to the government, causes another to submit a false claim, or knowingly makes a false record or statement to get a false claim paid, is liable for penalties.

31 U.S.C. § 3730 – Civil Actions for False Claims:

(a) Provides the provisions for private persons (whistleblowers or relators) to bring a civil lawsuit on behalf of the United States.

(b) Details the rights of the parties in qui tam actions, including the rights of the government to intervene and take over the action.

(c) Discusses the rights of the whistleblower if the government decides not to intervene.

(d) Outlines the whistleblower’s share of the recovery and protections against employment retaliation.

(e) Describes certain bars to qui tam actions, such as public disclosure and original source exceptions.

(f) Specifies the government’s power to dismiss or settle a qui tam action.

(g) Defines the statute of limitations for actions under the False Claims Act.

31 U.S.C. § 3731 – False Claims Procedure:

This section specifies the responsibilities and procedures in False Claims Act cases, including statute of limitations for filing FCA actions and the burden of proof requirements.

31 U.S.C. § 3732 – False Claims Jurisdiction:

Defines the jurisdictional requirements for courts to hear FCA cases.

31 U.S.C. § 3733 – Civil Investigative Demands:

Provides the Attorney General the authority to issue civil investigative demands during FCA investigations, which require an individual or entity to produce documentation, answer written questions, or give oral testimony.

These statutes collectively provide the framework for the operation of the False Claims Act, detailing everything from the definitions of fraud and the process for filing claims, to whistleblower incentives and protections, and the government’s enforcement powers. They are designed to effectively deter fraud against federal programs and to involve private citizens in uncovering and prosecuting fraudulent activities.

Report Healthcare Fraud / False Claims Act Violations

Navigating the complex landscape of healthcare fraud, especially in Medicare, is a task fraught with legal intricacies and significant consequences. Recognizing these challenges, consulting with a specialized Healthcare Fraud Attorney becomes not just advisable but essential. Whether you are a healthcare professional aware of questionable billing practices or a concerned citizen who has noticed potential fraudulent activities, your proactive steps are vital in maintaining the integrity of Medicare and protecting its critical resources.

At Di Pietro Partners, we have a dedicated team of experienced Healthcare Fraud Attorneys, supported by healthcare professionals and former government administrators, expertly equipped to handle the subtleties of Medicare fraud cases. Our firm brings a robust background in healthcare law combined with a proven track record in managing complex legal challenges, ensuring we provide the highest level of representation and support.

We recognize the bravery required to come forward and the necessity of safeguarding your rights and interests throughout the legal process. That’s why we offer a confidential, no-obligation consultation to discuss your situation and evaluate your legal options thoroughly. Our commitment extends to our contingency fee structure for whistleblower cases, where you incur no legal fees unless we successfully recover funds on your behalf. This approach ensures our goals align with yours, allowing you to pursue justice without financial risk.

If you suspect Medicare fraud and are contemplating action, you need not face this daunting challenge alone. Contact Di Pietro Partners to schedule your free consultation. By partnering with us, you can play an instrumental role in holding fraudulent entities accountable, recovering misappropriated funds, and helping to preserve Medicare as a sustainable resource for future generations who rely on it. Together, let’s take a stand against healthcare fraud.

This page was legally reviewed by David Di Pietro. David has been a practicing healthcare and medical malpractice lawyer for over a decade. Throughout this time, he’s represented client’s through various complex issues involving the healthcare system. This includes misdiagnosis, missed strokes, child birth injuries, medication errors and more. He regularly appears on national TV to provide his expertise on well known medical malpractice/personal injury matters such as the multi billion dollar Purdue Pharma Opioid Lawsuit. David is an experienced and aggressive trial attorney that has tried over fifty (50) jury trials and numerous bench trials. David is also a member of the Trial Lawyers and Health Law Sections of the Florida Bar.

This page was medically reviewed by Dr. Tiffany Di Pietro. Dr. Tiffany Di Pietro serves as the medical advisor for Di Pietro Partners’ medical malpractice and product liability cases. She graduated Magna Cum Laude with a Bachelor of Science degree in Psychobiology from Florida Atlantic University at 19 years old. She then went on to become the youngest graduate from the College of Osteopathic Medicine at Nova Southeastern University in Ft. Lauderdale, FL. Dr. Di Pietro is quadruple board-certified in cardiology, internal medicine, echocardiography and nuclear cardiology. She also frequently appears on national news outlets as a medical expert and commentator.

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