Page 36 - January 2020 BarJournal

FEATURECRIMINAL LAW

HEALTHCARE WHISTLEBLOWERS

HOW THE GOVERNMENT USES THE FCA’S QUI TAM

PROVISIONS TO ROOT OUT CORRUPTION FROM WITHIN

BY COLIN JENNINGS, MARISA T. DARDEN & AYAKO HOBBS

histleblowers, and avoiding or decreasing an obligation to pay government must notify the court that it is
the protections they (known as the “reverse false claim”). 6 either intervening, or declining to pursue the
receive, are one of In 1986, Congress amended the FCA to action. If the government declines to intervene,
the primary tools clarify that neither actual knowledge of fraud, the relator can proceed with the action
W the government nor an intent to defraud, need be proven. The independently. Relators are incentivized to
has historically relied upon to address fraud definition of “knowledge” remains unchanged. bring qui tam actions because they are awarded
with respect to federal programs. Healthcare The statute clarifies that defendant has a share of any recovery that is made against
providers, insurers, suppliers, and others knowledge if he (1) has actual knowledge of the a defendant. If the government intervenes,
can find themselves the subject, or target, of information; (2) acts in deliberate ignorance the relator is entitled to receive between 15
an investigation stemming from suspected of its truth or falsity; or (3) acts in reckless and 25 percent of the amount recovered by
violations of the False Claims Act (FCA), disregard of its truth or falsity. The FCA’s the government. If the government declines
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particularly from its qui tam, or whistleblower, statute of limitations requires commencement to intervene and the suit still proceeds, the
provisions. In 2018, the Department of Justice of a lawsuit within (1) six years of the false relator’s share increases to 25 to 30 percent.
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(DOJ) reported that recoveries under the FCA claim violation; or (2) three years of when There are also robust protections under the
totaled $2.8 billion, of which $2.5 billion was the responsible government official knew, or FCA designed to prevent whistleblowers from
attributable to the healthcare industry. DOJ should have known, the material facts; either being retaliated, harassed, or discriminated
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noted it was the ninth consecutive year that civil way, it must be filed within ten years after the based on their conduct. 12
healthcare fraud settlements and judgments actual date of violation. 8
have exceeded $2 billion. Over the years, DOJ The FCA is a powerful tool, largely due to Recent DOJ Guidance
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has increased their enforcement activity in the the significant damages provisions. Violations On May 7, 2019, DOJ announced new
healthcare space, changing the landscape and of the FCA can result in treble damages, as well guidelines for cooperation credit in FCA
nature of civil and criminal charges facing as a mandatory penalty of $11,181 - $22,363 cases. The guidelines are meant to incentivize
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industry actors. per false claim. The FCA defines a “claim” as a companies to voluntarily disclose misconduct
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demand for money or property made directly to and cooperate. DOJ explains that “proactive,
What is the FCA? the government or to a contractor, grantee, etc., timely, and voluntary self-disclosure” about
First enacted in 1863 in response to concerns if the government provides any of the money misconduct will receive credit. Voluntary
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Union Army soldiers received fraudulent demanded. Whether the FCA suit is initiated self-disclosure of additional misconduct
goods during the Civil War, the FCA prohibits by the government or by the qui tam realtor, discovered during a company’s own internal
a person from knowingly submitting, or the liability, damages, and penalties provisions investigation is also eligible for cooperation
causing to be submitted, a false claim to the remain the same. Defendants are also liable for credit. The guidelines also provide a non-
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government. With respect to healthcare, attorneys’ fees and litigation costs. comprehensive, non-mandatory list of
violations of the FCA vary from failure to activities DOJ might consider when evaluating
document patient care, off-label promotion, What Are the FCA’s Qui Tam Provisions? a party’s cooperation. In addition to voluntary
unnecessary medical services, to excessive The FCA allows private persons to sue for disclosure, the government may consider:
billing charges and other claims. Generally, violations of the FCA and share in a portion (1) whether the party’s assistance was timely
FCA healthcare violations implicate the of proceeds returned to the federal treasury. and voluntary; (2) whether the testimony or
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following provisions: (1) knowingly presenting Such lawsuits are known as “qui tam” actions, information provided is truthful, complete,
or causing to be presented a false or fraudulent and the person bringing the action is referred to and reliable; (3) the “nature and extent” of
claim for payment or approval; (2) knowingly as a “relator,” or, colloquially, “whistleblower.” the party’s assistance; and (4) the “significant
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making, using, or causing to be made a false The relator must file a complaint and a and usefulness of the cooperation to the
record or statement in order to get a false claim written disclosure detailing all relevant government.” The maximum credit a party
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paid or approved; (3) conspiring to commit information. The complaint is then sealed may earn “may not exceed an amount that
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a violation of the FCA; or (4) knowingly for months or years while the government would result in the government receiving less
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concealing, or knowingly and improperly investigates the allegations. Eventually, the than full compensation for the losses caused
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