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Posts Tagged ‘whistleblower claims’

Whistleblower Settlements Increase Compliance Risk for Providers

Wednesday, May 16th, 2018

Recent Fraud Settlements Emphasize Risk of Whisttleblowers

Dermatology Risk Areas Fraud and AbuseOne of the reasons why compliance officers and health care attorneys read fraud settlements is to identify the issues that the government is focused on.  The cases that the government decides to pursue are very indicative of the areas of fraud enforcement that they feel are important.  These are not the only issues that should be considered, but government enforcement actions certainly tell us what types of arrangements the government considers important.

The misfortune of the defendants involved in these cases hold a potential learning experience for everyone else.  Others have an opportunity to focus on their own operations to identify whether they are at risk in any of the areas involved in these cases.

An ancillary lesson that these settlements hold is that each was initially raised by a whistleblower.  The False Claims Act gives whistleblowers a portion of the settlement in cases where the government decides to intervene.  This in effect creates a universe of potential claimants that can include almost anyone with original knowledge of the alleged practice.

Common whistleblowers include former or disgruntled employees.  It really does not matter of the employee is or was the worst employee in the world, they can still bring an action as a whistleblower.  Not only are they protected by a host of laws, they can also profit greatly if the claim is eventually decided in their favor.  Whistleblowers often receive awards in the millions of dollars.  This makes the area ripe for plaintiff’s attorneys who often take these cases on a contingency fee basis.  This makes it a relatively low-cost proposition for a whistleblower to bring a case forward, at least from the perspective of attorney fees.

Federal Government Will Seek Dismissal of False Claims Act Cases That Lack Merit

Monday, December 11th, 2017

The FCA is a federal law aimed at combatting fraud against the U.S. government.  The FCA has been around since 1863, in response to contractors who defrauded the Union Army by selling it defective weapons, ammunition, and equipment and unhealthy and unfit food and animals.

A prime feature of the FCA is what is called the “qui tam” provision, under which a private citizen, known as a “relator” (otherwise known as a whistleblower), can sue on behalf of the government and be paid a percentage of the amount recovered (generally 15% to 30%) plus legal fees.  Health care and military-related industries have been particularly popular targets of FCA whistleblower actions.  Under the FCA, the DOJ has 60 days within which to decide to prosecute the claim or decline involvement.  If the DOJ decides not to be involved, the relator has to decide whether to proceed alone.

Up to now, it has been the position of the government that the relator is free to continue a case that the government declines to prosecute.  Now, however, the DOJ will file a motion with the court urging it to dismiss the case if it believes it is frivolous.  The DOJ’s rationale for its new policy is that frivolous litigation imposes a burden on the government, the courts, and the health care industry.

It is important to note that this change in policy affects only those cases that the DOJ believes have no merit.  By no means should this cause any reduced emphasis on compliance activities.  It is also not known how DOJ will determine that a case is frivolous.  What is known is that this is a major shift from the policy of the previous administration and could have significant implications for the health care sector.

John H. Fisher

Health Care Counsel
Ruder Ware, L.L.S.C.
500 First Street, Suite 8000
P.O. Box 8050
Wausau, WI 54402-8050

Tel 715.845.4336
Fax 715.845.2718

Ruder Ware is a member of Meritas Law Firms Worldwide

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