Don't Let Your Qui Tam Whistleblower Action Get Dismissed Prematurely

By Erica N. Cordova, HR Esquire – The Cordova Law Firm LLC

QUI TAM PROTECTION

The False Claims Act allows a private individual or “whistleblower," with knowledge of past or present fraud on the federal government to recover stiff penalties and triple damages. The Act also protects qui tam plaintiffs who are demoted, suspended, threatened, harassed or in any other manner discriminated against in the terms and conditions of employment for acts done in furtherance of filing a claim under the Act. This provision allows reinstatement, double back pay, interest on the back pay, plus special damages including litigation costs and reasonable attorneys’ fees.

WHAT IS FRAUD UNDER THE ACT?

Fraud under the False Claims Act means that a contractor has knowingly presented a false claim for payment to the United States.

Types of Medical Fraud:

• Billing for tests not performed
• Performing inappropriate or unnecessary procedures
• Charging for equipment/supplies never ordered
• Billing Medicare/ Medicaid for new equipment but providing the patient used equipment
• A drug or equipment supplier completing a Certificate of Medical Necessity instead of the physician
• Reflex Testing
• Defective Testing
• Code Jamming
• Offering free services or supplies in exchange for your Medicare or Medicaid number
• Unbundling
• Double Billing
• Up Coding
• Phantom Employees
• Improper Cost Reports

STATUTE OF LIMITATIONS

A civil action under § 3730 may not be brought:

• More than 6 years after the date on which the violation of § 3729 is committed, or
• More than 3 years after the date when facts material to the right of action are known or reasonably should have been known by the official of the US charged with responsibility to act in the circumstances, but in no event more than 10 years after the date on which the violation is committed.

TO STATE A CAUSE OF ACTION

A qui tam plaintiff may allege that defendants either:

1. Knowingly presented or caused to be presented to an officer of the US government…a false or fraudulent claim for payment or approval;
2. Knowingly made, used or caused to be made or used, a false record or statement to get a false or fraudulent claim paid by the government;
3. Conspired to defraud the government by getting a false or fraudulent claim allowed or paid.

FILING A CLAIM

A complaint under the False Claims Act MUST:

• be served on the government, but 
• NOT be served on the defendant until ordered by the court
• be filed under seal
• be buttressed by a comprehensive memorandum not filed in court, but served on the government, detailing the factual underpinnings of the complaint, together with copies of all relevant documents.

After the complaint and supporting memo and documents are served on the government, the government has 60 days to:

• intervene or decline to intervene**
• move for an extension of time to determine whether to intervene (often occurs)
• seek dismissal of the action; or
• settle the case (does not require whistleblower approval)
• The action may be dismissed only if the court and the Attorney General give written consent to the dismissal and their reasons for consenting.

**Regardless of whether the government intervenes, the whistleblower, if he or she followed the right procedure, is still entitled to a share of the recovery, and may pursue the case him or herself on behalf of the government.

If the qui tam suit is successful, the whistleblower will also be entitled to 15-30% of the government’s total recovery, which includes damages for the false bills, tripled, plus civil penalties of $5000-$10,000 per false claim. These damages can be reduced by factors such as defendants cooperation with the investigation.

IMPORTANT WARNING

It is not permissible for the attorney or the plaintiff/relator to discuss the case or to disclose its existence to anyone, including the defendant and the media, as to do so could impair the government’s ability to investigate allegations in secret. Failure to follow these unique statutory requirements can result in dismissal of the action.

Erica N. Cordova is the Managing Attorney of HR Esquire - The Cordova Law Firm LLC. At HR Esquire, we believe in passing the savings along to our clients through our part-time law firm model. We strive to help small businesses develop a solid foundation and legal strategy so they can be successful. We will work to improve legal compliance and employee relations. Our goal is to improve your business' performance and provide legal advice for a successful human resources strategy via our Offsite General Counsel. Find out how we can help you and your business today! If you have questions about this article, please email contact@hresquirelaw.com.