The False Claims Act and the Role of Whistleblowers in Stopping Health Care Fraud

At The Brod Firm, we believe that the law can be a powerful instrument of good, helping people in times of need and bringing justice to our communities. Sometimes, however, justice requires the bravery of honest individuals willing to stand
healthcash.jpg up for what is right. An example is the important role of whistleblowers in shedding light on health care fraud, including Medicare fraud, pursuant to the False Claims Act. We have referenced some of these cases before, but wanted to provide a more general overview of this area of law. We hope this brief primer helps people gain a better understanding of these cases and our work as a California whistleblower’s law firm. This is merely an overview; witnesses to healthcare fraud are encouraged to call us and arrange a free consultation to discuss specific concerns (including the contours of attorney confidentiality) and the role of health care fraud whistleblowers in more detail.

Fraud & The False Claims Act
Often healthcare fraud (including Medicare fraud) involves an individual or company demanding payment from the government for services that were not actually provided, such as a medical provider asking for Medicare reimbursement for treatment that was never delivered to the patient. Liability for this form of fraud generally falls under the False Claims Act (the California equivalent is similar, but this post will focus on the federal law) which addresses fraudulent demands for payment from the government. These cases involve deliberate fraud, often to the tune of millions of dollars, not simple mistakes in calculation.

The Need for Whistleblowers & Their Role in False Claims Act Cases
It is hard to uncover these frauds and this is where whistleblowers come into play. Whistleblowers are private parties, often company employees or other insiders, who bring a case of fraud to the government’s attention. The False Claims Act includes specific provisions allowing private parties with knowledge of fraud to bring a lawsuit for the violation of the Act. While employees or members of corporate management are most likely to have the knowledge to prove a False Claims Act violation, other private parties can and do bring cases. One example is the Medicaid claimant who noticed a company had billed for services he had not received and whose meticulous records helped produce a settlement involving more than $150 million (see link at the conclusion of this post to our prior discussion of that particular case).

The government can decide whether it wants to take over the litigation and bring the claim itself or allow the private party to play that role. In the latter instance, the case may be referred to as qui tam action and the whistleblowing party is known as a realtor. Standing principles normally prevent someone from bringing a claim without a personal stake (taxpayer status is typically not enough), but the Act specifically allows a private party to bring the claim.

Protections & Rewards for Whistleblowers
Not surprisingly, companies that commit fraud are not happy to have the whistle blown. The statute recognizes this and provides protection against retaliation. It protects the whistleblower against harassment, termination, lack of promotion, and other forms of retaliation. A court may award the whistleblower their job back, double back pay, and the value of lost opportunities.

In recognition of the risks taken and the work performed, whistleblowers are also eligible for financial reward if the case is successful. The amount depends on a variety of factors, primarily the extent of the individual’s contribution to the suit. If the government takes over a case based on the whistleblower’s information, the whistleblower is eligible to receive between 15% and 25% of the money recovered by the government through litigation or settlement (or up to 10% if the information was publicly available). If the government declines involvement and the whistleblower/realtor brings a successful qui tam action, the reward is between 25% and 30% of the money due to the government pursuant to a verdict or settlement. The defendant is also responsible for litigation costs and the attorney’s fees incurred by the whistleblower.

A Law Firm for California Whistleblowers
If you have knowledge of a fraud committed against the government, including a company or individual submitting false requests for payment under Medicare or Medicaid, call and talk to our health care fraud law firm serving San Francisco and all of California. We can help ensure you are protected as you help bring these crimes against our government and its citizens to light.

See Related Blog Posts:
Health Care Fraud & Whistleblower Suits: A $150 Million Example

Settlement Reached in California Medicare Fraud Case

(Photo by Flicker user 401(K) 2013)