The False Claims Act was passed on the federal level to make it a crime for any individual or organization to file fraudulent claims to obtain government money or benefits. There are many different examples of false claim act violations, which can result in significant financial penalties to those who break the law. Businesses or organizations found in violation and convicted of submitting false claims can be required to pay back three times the value of the money misappropriated, as well as additional penalties of $5,500 to $11,000 for each claim.
While false claims can lead to criminal prosecutions, civil lawsuits can also be filed. Whistleblowers can bring qui tam lawsuits to bring evidence of false claims to light. If the government is able to recover misappropriated funds or improperly paid benefits under a qui tam lawsuit, the whistleblower who brought the case is financially rewarded with a portion of the recovery.
Examples of False Claims Act Violations
One recent example of a false claim act violation occurring when three cardiologists at the Citizens Medical Center in Victoria, Texas discovered that an administrator had allegedly created a system to improperly compensate cardiologists and emergency room physicians for referring patients to the hospital's Chest Pain Center. The cardiologists and ER physicians were rewarded with above-market salaries and with financial bonuses in exchange for making patient referrals, despite the fact the law bars compensation for medical referrals.
The three cardiologists who discovered the alleged kickback scheme filed suit under the False Claims Act, indicating the overcompensation of the doctors for the referrals was leading to false claim submissions to Medicare. The defendants tried to assert they had qualified immunity because of their work for the government, and argued provisions of the Anti-Kickback Act and Ethics in Patient Referrals Act exempted direct employees. The court dismissed the arguments the defendant's made, and the Fifth Circuit upheld the decision made by the lower court denying qualified immunity.
The federal government intervened in the false claims act case before it went to trial, with the case settling for more than $23 million. The plaintiffs were paid close to $6 million for bringing the wrongdoing to the attention of the government.
This is just one of many examples of false claims act cases in which government money was saved and whistleblowers were rewarded for coming forward. Other examples of wrongdoing in the healthcare industry which could lead to claims under the False Claims Act include making false statements to obtain benefits payments for services performed; double billing for services that were performed; unbundling or separating out procedures into multiple codes instead of billing under one code; and billing for services which were not actually performed.
Employees and those in the medical profession should be on the lookout for situations in which fraud is occurring and government benefits and funds are being improperly paid out. Coming forward helps to save taxpayer money and can lead to direct financial rewards for whistleblowers.