What Happens in a False Claims Act Investigation?

In the most general of terms, the false claims act (FCA), 31 U.S.C. §§ 3729-3733, imposes liability for any person or entity who knowingly submits a false claim to the federal government, knowingly makes a false record or statement to get a false claim paid by the government, or knowingly fails to repay an amount owed to the government.  FCA claims are often, but not always, initiated by a relator (also called a whistleblower), who files the claim under seal, prompting the government to investigate. 

After its investigation, the government decides whether to intervene in the case or allow the relator to pursue the claims on its behalf.  As most in the healthcare industry already know, the government has been very aggressive, and very successful, in recent years in pursuing FCA liability against healthcare companies it believes have submitted false claims for reimbursement from Medicare, Medicaid, and other federal payors. 

The Federal False Claims Act prohibits any individual or institution from submitting payment claims to the Federal Government if the applicant/entity knows, or ought to know, that the allegations are false or fraudulent.

While the False-Claims-Law is aimed against “fraud,” breaches often become suave and sophisticated, thereby generating publicity for many health care professionals who don’t find themselves to be “fraudulent” or breaching such laws. As any health care professional knows, the vast majority of the False-Claims-Law investigations and convictions are against individuals.

The Violations

Often, federal and state prosecutors use the False Claims Act to combat fraud and abuse of healthcare. The False Claims Act is also used to battle healthcare providers for infringements and can take several forms, but the main one is when an individual or facility makes allegations.

The False Claims Law is a penalty law. For civil offenses, the rules on fines require a fin three times the amount charged by the government in respect of each false claim, plus an additional penalty of as much as $11,000 per false claim. In the sense of healthcare, provided that a facility is free to apply in any given time span and because of the accumulated monetary value of these claims, some of the most significant penalties levied on providers of healthcare are the result of lawsuits under the False Claims Act.

This last example is particularly noteworthy because a whistleblower launched the federal investigation, which led to the $124 million fine by the provisions of the False Claims Act. The qui tam clause of the Federal False Claims Act dramatically adds to the proliferation of offenses, as it allows someone with a knowledge of a violation of a lawsuit to bring legal action against a violator on behalf of the United States.

Punishment

Persons can also be punished for violations of the False Claims Act. The Federal Government has demonstrated a strong determination, primarily using the Department of Justice (DOJ), to investigate and prosecute fraud in federal programs and government contracts and criminal prosecution of violators where they feel the behavior warrants them.

The criminal penalties for violating the False Statements Act include substantial fines and incarceration. Because companies can not be put under the prison, the government often initiates an investigation of a company but ends up pursuing criminal charges against individuals controlled in the case of a healthcare facility such as the Chairman, CEO, CFO, or Medical Director.

Whenever anyone brings a lawsuit, the federal government may interfere and assume primary responsibility for the conviction, dismissal, or resolution of the suit. Whether or not the Federal Government interferes, whether the whistleblower or relator succeeds, who originally took action could be given a portion of the recovered funds. Given the scale of possible penalties and damages awards of the False Claims Act, these tam cases can be very lucrative, and thus lead to increased coverage by private parties of suspected wrongdoing.

False Claims

In addition to the Federal False Claims Act, several states have enacted False Claims Laws of the same nature. State False Claims Acts generally operate in the same manner as federal False Claims Act, except that they are implemented by the state, usually the Office of the State Attorney-General, and are designed to prevent and punish fraudulent claims submitted to the state for payment. In the healthcare sense, this also applies to the making of misleading statements.

Damage from the False Claims Act investigation and not to mention civil enforcement or criminal prosecution of individuals can lead to the operations and reputation of a healthcare provider, not to mention the detriment of defending an extensive false claims act prosecution on the merits of that provider.

Given the extent of monetary damage and reputational damage, healthcare providers are wise to employ legal counsel, who is not just familiar with the health sector, but also who have experience in defending criminal white-collar fraud cases under the False Claims Act and other Federal Anti-Fraud Statutes. Therefore, health practitioners must include lawyers at the very first instance of an investigation.

This usually takes the form of a relatively benign summons, a civil investigation or some other governmental demand for records, that will probably not state or even suggest that the recipient will eventually face significant civil or criminal exposure.

Regardless of what the notice says, healthcare providers should always remember that a law enforcement agency sends it. The earlier the recipient of such a notice engages experienced healthcare litigants, the better the chances of successfully navigating the investigation and preventing an enforcement action from the recipient or, to the very least, the lowering of possible liabilities.You can read more here Mimy Online.

The federal False Claims Act protects workers who report a breach of the False Claims Act from prejudice, abuse, job suspension, or termination because of potential fraud reporting. Employees reporting fraud and therefore discriminated against can (1) be granted double back pay plus interest, (2) reinstatement without loss of seniority, and (3) indemnity for any costs or damages.

Takeaway

Evidence of intent to constitute a civil breach of the FCA is not necessary, and even providers who do their best to comply with the complex Medicare and Tricare regulations that be liable under the FCA. Any health professional who is facing an investigation will pursue skilled legal counsel as soon as possible to mitigate the impact of an FCA investigation.