The Federal False Claims Act

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Understanding Qui Tam

[By Dr. Charles F. Fenton III; Esqfenton]  

A civil war era law, titled the False Claims Act (qui tam [in the name of the king]), is increasingly popular with prosecutors who pursue inappropriate billing mishaps by physicians.  

Why the False Claims Act? 

The FCA rose to prominence because in 1990, the healthcare industry accounted for about 10% of all false claims penalties recovered the federal government. By 1998, the healthcare share was almost 40%. Today, it may be even more. 

The “Act”  

The False Claims Act allows a private citizen such as your patient, your employee, or a competing doctor to bring a health care fraud claim against you, on behalf of and in the name of the United States of America. The “relator” who initiates the claim is rewarded by sharing in a percentage of the recovery from the health care provider. 

Essentially, the “Act” allows an informant to receive up to 30% of any judgment recovered against government contractors (Medicare, Medicaid, CHAMPUS, prison systems, American Indian reservations or the VA systems, etc).   

With a low burden of proof, triple damages, and penalties up to $10,000 for each wrongful claims submission, these suits are the enforcement tools of choice for zealous prosecutors pursuing health fraud.   


All that must be proven is that improper claims were submitted with a reckless disregard of the truth. Intentional fraud is irrelevant to these cases, even if submitted by a third party, such as a billing company. 

It is imperative that the attending physicians review all bills before they are submitted to any state of federal agency. The Federal False Claims Act is a federal law that has been on the books since the days of the civil war and which recently has become a tool to battle health care fraud.  

So, what do you think about the Federal FCA?


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6 Responses

  1. OIG

    A final report by the inspector general’s office [OIG] of the Department of Health and Human Services [DHHS], found evidence that the Centers for Medicare and Medicaid Services [CMS] underestimated the amount of improper Medicare claims paid in 2006!



  2. FCA for Big-Pharma, Too!

    Abbott Laboratories, B. Braun Medical and Boehringer Ingelheim Roxane have just agreed to pay $421 million to settle False Claims Act allegations.



  3. Billing Medicare for Poor Care Not a False Claim, Court Rules

    A recent appellate court ruling in favor of an Illinois nursing home could shield other healthcare providers from False Claims Act allegations that involve poor quality of care.

    Last week, the 7th U.S. Circuit Court of Appeals vacated a judgment against Momence (IL) Meadows Nursing Center and in favor of two whistle-blowers, both nurses who used to work at the facility. A District Court ordered Momence to pay more than $9 million under the False Claims Act. The appeals court, however, concluded that the plaintiffs’ argument rested on an incorrect application of the “worthless services” theory.

    Experts say the ruling reaffirms that the False Claims Act is rarely an appropriate tool for policing medical negligence. “It will serve as a standard by which other circuit courts will evaluate similar cases,” said Gary Eiland, a partner in the Houston office of law firm King & Spalding who works on healthcare false claims cases.

    Source: Bob Herman, Modern Healthcare [8/25/14]


  4. Time Limits for FCA Cases Stand Under Supreme Court Decision

    Hospitals and other healthcare organizations no longer have to worry that False Claims Act (FCA) lawsuits will hit very old claims because the U.S. Supreme Court ruled on May 26 that the suspension of the statute of limitations for certain fraud laws doesn’t apply. In the final word on the subject, the highest court in the land said the Wartime Suspension of Limitations Act (WSLA), which still is in effect, applies to only criminal statutes, not civil statutes such as the FCA. The WSLA suspends the statute of limitations for fraud perpetrated against the federal government, the court noted.

    Washington, D.C., attorney Jesse Witten says the 9-0 Supreme Court decision restores “common sense” to the statute of limitations under the FCA. An FCA case may be brought (1) six years from the date of the violation, or (2) three years from the date of discovery of the violation, but not longer than a decade after the violation, he says.

    Source: Nina Youngstrom, Report on Medicare Compliance [6/1/15]


  5. Tenet Healthcare moves to settle False Claims Act suit

    Tenet Healthcare Corporation has offered the Justice Department a $238 million settlement. Four of its Georgia hospitals allegedly received kickbacks for working with a clinic that provided prenatal care to uninsured patients, which violates the False Claims Act.

    Dr. David E. Marcinko MBA


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