Frequently Asked Questions

  1. What is a "FALSE CLAIM"?
  2. What is the difference between a "FALSE CLAIM" and FRAUD?
  3. Can the FALSE CLAIMS ACT enhance PATIENT CARE?
  4. What if the WHISTLEBLOWER was involved in the WRONGDOING?
  5. What LIMITATIONS are there on WHISTLEBLOWERS?
  6. What if your EMPLOYER is involved in the FRAUD?
  7. How does the case WORK?


WHAT IS A "FALSE CLAIM"?

A defendant may be liable if it submits a claim to the federal government, or to a third party -- so long as the government must eventually provide reimbursement for the claim, or so long as the Government helps fund the entity to which the claim is submitted.  Therefore a "false claim" maybe any of the following examples:

WHAT IS THE DIFFERENCE BETWEEN A "FALSE CLAIM" and FRAUD?

The False Claims Act has a much easier standard of proof than most fraud statutes.  To prove a doctor or hospital has submitted false claims, one need only prove "deliberate ignorance or reckless disregard" of the actual facts.  This language was deliberately written to prevent the "head in the sand" defense where a provider simply closes his or her eyes to what is going on, all the while raking in the money.

This is easier than proving fraud, which requires proof of "intentional deception or misrepresentation" which the defendant knows is false.


CAN THE FALSE CLAIMS ACT ENHANCE PATIENT CARE?

Tired of seeing patients abused and neglected?  A nursing home operator was recently fined $600,000 for patient abuse and agree to sweeping policy changes in the way its homes are operated -- all through the False Claims Act.

Here's how it worked: The 1988 Medicare Amendments included the Nursing Home Reform Act.  Now, each time a long-term care facility submits a Medicaid or Medicare bill, it is impliedly certifying that a high level of quality care is being delivered and that the patients are safe.  (This act may be found at <42 U.S.C. §1395i-3, §1396r>.  The key regulations are at <42 C.F.R. §§483.20-483.25(c)-(d)).

The United States Attorney for the Eastern District of Pennsylvania (Philadelphia) sued the nursing home owners for falsely certifying that patients were receiving proper care.  The owners had to repay $600,000 in fines and penalties, and agree to broad changes in how they ran their facility - with regular monitoring by patient rights groups.


WHAT IF THE WHISTLEBLOWER WAS INVOLVED IN THE WRONGDOING?

Congress has created a three-part scale where the whistle blower (called the "relator" in legal parlance) was involved in the fraud.  A whistleblower whose involvement is minor is still eligible for a 15-30% recovery.  One who was a mastermind or "architect" of the fraud may receive from 0-10%.  Only a whistleblower whose conduct was so flagrant that the Government prosecutes and convicts them may not recover anything.


WHAT LIMITATIONS ARE THERE ON WHISTLE BLOWERS?

If there has been prior disclosure of the wrongdoing, through a suit, a government investigation, etc., private citizens cannot file false claims act suits unless they are one of the "original sources" of the information.

The whistleblower laws are intended to encourage people who would not normally come forward with evidence of fraud.  In many cases employees of the federal government whose job it is to detect and report fraud cannot bring false claims suits.


WHAT IF YOUR EMPLOYER IS INVOLVED IN THE FRAUD?

"I feel like the getaway driver at a bank robbery." Anonymous R.N.


Situations where your own agency is involved in fraud are the most complicated and demanding a health care or insurance professional may ever encounter.  Balancing ethics, honesty, and concerns about economic security is intellectually and psychologically demanding.  Here is one factor to consider:
Whistleblower Survival Tips



HOW DOES THE CASE WORK?

The whistleblower's role will typically involve providing information, explaining records and documents, helping prepare for legal proceedings, and coordinating with his/her lawyer and the government lawyers.  If the case goes to trial, it may also involve assistance preparing charts and tables summarizing the evidence, as well as courtroom testimony.  The more help the whistleblower can offer, they greater his or her percentage of the recovery.

A corporation submitting a false claim is liable for: treble damages, a mandatory fine of between $5-10,000 for each false bill submitted, and paying the whistleblower's attorney's fees.  Here is a small example.  A hospital with a psychiatric unit falsely attests that two psychiatrists have been giving in-service education to the hospital staff.  It is a way of giving the doctors a kickback.  This has been going on for four years, with each doctor getting $20,000 per year.  The hospital filed false cost reports with Medicare twice a month, claiming this in-service education took place.  Here is what the damages look like: $20,000 x four years x 2 MD's x treble damages or $480,000, 24 false reports/year x four years x $5-10,000=$480,000-960,000.  Therefore the hospital's liability range is $960,000 - $1,440,000 which would usually result in a share for the whistleblower of $144,000 - $432,000.

This was a small example.  Remember that health care fraud is so huge that there are many cases ranging in the millions, and tens of millions of dollars.  Three whistleblowers recently received $51 million as their share of the recovery in a false claims case.


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