The False Claims Act is a federal statute that was enacted in 1863 as a means to combat contractor fraud during the American Civil War. As it is known today, the False Claims Act provides the following with regard to fraudulent/false claims:

The FCA provided that any person who knowingly submitted false claims to the government was liable for double the government’s damages plus a penalty of $2,000 for each false claim. The FCA has been amended several times and now provides that violators are liable for treble damages plus a penalty that is linked to inflation.

In addition to providing the United States with the ability to fight fraud on its own, the False Claims Act also provides private citizens with a right to file suits on behalf of the government against those who have defrauded the government. These actions are called qui tam suits and allow for private citizens to receive a portion of the recovery the government may obtain. According to the United States Department of Justice (the “DOJ”), more than $3 billion in settlements and judgments were obtained from civil cases alone for the fiscal year ending September 30, 2019. These cases involved fraud and false claims against the government.

At the core of this statute is the government’s ability to combat and prosecute healthcare fraud and abuse. However, when the scope of the statute allows for a broad range of actions to be investigated, some of which are innocuous and benign, stakes and exposure for liability skyrocket. It is no wonder, then, why hiring a knowledgeable and experienced professional that is well-versed in this subject matter is essential.

Penalties. Under the False Claims Act, each violation of the False Claims Act can cost anywhere from $5,000 to $10,000. Even more shocking is the fact that these penalties are adjusted for inflation and now currently amount to a range of $11,666 to $23,331.

The False Claims Act, 31 U.S.C. 3729, states that anyone who violates the law “is liable to the United States Government for a civil penalty of not less than $5,000 and not more than $10,000, . . . plus 3 times the amount of damages.” This means that, in practice, the False Claims Act provides, or imposes, a penalty for each violation. In addition, courts have found that penalties can amount to tens of thousands. Applying simply arithmetic then, awards for violations of the False Claims Act can reach hundreds of millions of dollars.

False Claims Act Procedures. The False Claims Act is one of the most commonly utilized healthcare enforcement statutes in the United States. This statute is one that allows for investigations and prosecutions of individuals and businesses that are a part of a government service contract. For example, even the simple act of allowing or agreeing to service Medicare opens up the doors for government agents and prosecutors to initiate an investigation. This can occur whenever any false claim is submitted.

A provider will know that it may be under investigation if and when it is contacted by federal agents or receives a subpoena. These subpoenas may issued by the Office of Inspector General within the Department of Health and Human Services. When this happens, it is imperative that the provider consult with an attorney in order to navigate the complexities involved with this statute. This is especially true as the False Claims Act provides for civil and criminal penalties.

In addition, given the very nature of this statute, qui tam suits can increase the amount of reporting regarding alleged misconduct. The awards can be very lucrative and potentially expose healthcare providers to increased scrutiny, even when misconduct is the result of a mistake. The government has the ability to intervene in the action and pursue it accordingly; this may involve prosecution, dismissal and/or settlement.

The purview and effect that an investigation can cause may be detrimental. The only option here is to consult with counsel that has years of experience not only defending these investigations, but prosecuting them as well. Our team of healthcare attorneys and professionals understand and have the knowledge how to navigate these actions and minimize any potential liability.

Healthcare Attorneys. At Oberheiden P.C., we have a dedicated practice devoted to handling healthcare practices and audits. Our practice team includes former Department of Justice officials, former federal prosecutors in charge of escalated healthcare audits and fraud investigations, and as trusted consultants to hundreds of dentists, physicians, and mental health providers across the United States.

If you find yourself as the subject of an investigation or have received an audit request, a subpoena or a letter from the DOJ, contact one of our former prosecutors and healthcare fraud defense counsel in order to guide you through this complex process and to avoid a possible criminal prosecution. Given the damage that such an investigation can do, healthcare providers would do well to consult with experienced healthcare counsel at the very beginning of an investigation. Otherwise, the result can mean civil penalties, criminal prosecution, not to mention damage to one’s career and reputation.