What Is the False Claims Act?

Imagine you’re at work and discover that your employer may be defrauding the government of millions of dollars. What should you do? Fortunately, Congress enacted the False Claims Act (FCA) to deal with this scenario. Several states have followed suit and enacted their own false claims act, which resembles the federal FCA in many ways.

The FCA is the U.S. government’s major weapon in fighting fraud. It allows a whistleblower — also called a “Relator” — who discovers fraud to file suit against those individuals or entities who are stealing from the government. If the claim is successful, the government may recover the fraudulently-obtained funds and the whistleblower may receive compensation in the form of a percentage of the recovery.

If you think a company is committing fraud against the federal government, it is essential to have a False Claims Act attorney help you file a whistleblower lawsuit. The FCA attorneys at Nix Patterson can evaluate your case at no cost today.

What Is the False Claims Act?

The False Claims Act is also called Lincoln’s Law because it was passed during the Civil War to fight fraud by contractors who provided goods to the U.S. military. In recent years, the FCA has been updated to improve the federal government’s ability to claw back money it lost from fraud.

A vital part of the FCA is the qui tam provision where someone aware of the fraud against the federal government can file a sealed lawsuit on behalf of the U.S. government. If the case succeeds, the whistleblower can share in the funds the government recovers — usually 15% to 25% of that amount. In addition, the whistleblower also may recover legal fees and costs from the company that engaged in fraud.

Congress passed monetary incentives and regulations protecting whistleblowers from retaliation in hopes of encouraging citizens to step forward and fight government fraud. The False Claims Act has been remarkably successful over the years; in 2022, False Claim Act settlements from whistleblower lawsuits totaled $2 billion. Since 1986, at least $72 billion has been recovered in FCA lawsuits.

What May Qualify as a False Claims Act Case?

Many types of fraud can cost the government tremendous money if whistleblowers don’t stop it. If you believe a company is engaging in any of the following illegal actions, talk to a False Claims Act attorney at Nix Patterson now.

  • Overbilling the government. If you think a company is charging the government more than it should for goods and services, consider filing an FCA or qui tam lawsuit with your attorney’s help. Some companies may charge for goods or services but do not provide them.
  • Overcharging for prescriptions. Some pharmacists engage in padding, which means marking up prices and not telling anyone. This also may involve not properly testing drugs or lying about drug quality.
  • Defrauding Medicaid. These cases often involve providing false information to obtain medical care and services.
  • Defrauding Medicare. This usually happens when medical providers deceive Medicare into receiving unauthorized payments or even get payments above approved amounts. For instance, a doctor may bill the program for a CT scan when they only did an X-ray.

What Is a False Claim?

The False Claims Act targets fraud in the form of false or fraudulent claims to the government for reimbursement. Government contractors — from physicians to treat Medicare insureds to manufacturers who produce supplies for the Department of Defense — provide goods or services to the government and then seek reimbursement pursuant to applicable agreements, laws, regulations, and rules.

A false claim is one that seeks reimbursement for goods or services that were not as described. In the healthcare setting, this may be an injection that was never performed or an injection with ultrasonic guidance where the guidance was not used. The fraudster bills the government for the service despite the fact that the government doesn’t actually owe the fraudster for the service, as billed.

False claims also arise when the fraudster’s violation of another law, regulation, or rule taints the provision of services and the resultant claim to the government. Most commonly, this arises in cases where physicians provide services to Medicaid or Medicare insureds while taking part in an illegal kickback relationship; even if the physician performed the services properly, the physician cannot bill the government for the services if they were referred pursuant to an illegal kickback relationship

What Is a Relator or Whistleblower?

A whistleblower is someone who discovers wrongdoing — usually fraud — and brings that wrongdoing to public light. In many instances, federal or state law provides protection to whistleblowers, including protection from retaliation for blowing the whistle. These protections are complicated, so whistleblowers usually need legal representation by competent attorneys experienced in whistleblower law.

There are several whistleblower laws that prescribe ways in which private citizens can report fraud to the government. In many instances, these laws repay private citizens who report government fraud with a portion of the funds recovered.

Commonly, whistleblowers uncover fraud in federal/state programs like Medicare and Medicaid, housing, small business development loans, as well as federal defense contracting.

Under the False Claims Act, Relators provide key knowledge, evidence, and other information and file the case, despite the fact that the United States and certain states remain the true plaintiff in the action.

Who Can File a False Claims Act Lawsuit?

A qui tam Relator must possess direct knowledge of the fraud that is allegedly occurring. This means you cannot file a whistleblower lawsuit based on information available to the public or in the press.

In many qui tam cases, company employees alleged to have engaged in fraud come forward and file the lawsuit. But contractors and competitors also may possess vital information about fraud.

Whistleblowers file the case for the U.S. government, but attorneys handle the legal work. The attorneys involved share the qui tam Relator title if they file suit on behalf of their client.

The qui tam Relator provides documents to their attorneys supporting the fraud allegations. There must be specific details of fraud committed against the US government. Most False Claims Act cases involve one or more of these violations:

  • Knowingly presenting a false claim to the government for approval or payment
  • Knowingly creating fraudulent statements or records to support a fraudulent claim to the government
  • Knowingly avoiding payment to the government what it is owed

How the False Claims Act Works for Whistleblowers

Filing a whistleblower lawsuit can be intimidating, but the U.S. government offers incentives and protections. For example:

  • A successful whistleblower case can result in 15 to 25% of the government’s recovery to the qui tam Relator
  • Entities and firms that defraud the government may have to pay treble damages and fines
  • Whistleblowers are shielded from company retaliation for filing an FCA claim. People who investigate the claim and testify also receive protection
  • You may be eligible for reinstatement, double back pay, interest, attorney’s fees, and more if there is company retaliation 

Can I Remain Anonymous?

FCA cases are filed “under seal,” which means they are kept in strict confidence. The case remains under seal during the pendency of the government’s investigation. So, while the case remains under seal, the identity of a whistleblower should remain a secret. If the government chooses to intervene in the case, the whistleblower may very likely remain anonymous.

However, once the case is unsealed, the protection of the whistleblower’s identity becomes much more challenging. And, if the government declines to intervene in the case, a Relator who chooses to proceed with litigation may find it challenging to maintain anonymity. While attorneys can use “Doe” filings and file lawsuits under disguised names, defendants often challenge the validity of this practice.

Contact Nix Patterson’s FCA Attorneys Today

Do you suspect your employer is defrauding the US government? You could have a False Claims Act case that may result in substantial compensation for you, and you also are protected from employer retaliation.

A qualified attorney can determine the strength of the case and help you file your whistleblower lawsuit. Contact Nix Patterson today to discuss your potential FCA case or any other complex litigation issues.

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