Frauds perpetrated against government programs undermine the public whom the programs serve and the institutions that provide the services. Criminalized acts of fraud in healthcare program billing, government contracts, defense procurement, and federal grants have the potential to siphon billions of dollars out of the system every year. Although there are a number of challenges that government agencies face in detecting these types of fraud, one of the best ways to expose these types of fraud is to have an employee or former employee who has firsthand knowledge of the fraud testify.
The False Claims Act is one of the statutes that is relied upon to achieve this objective. The False Claims Act is believed to be one of the strongest of the government’s anti-fraud laws. This Act has resulted in the recovery of billions of dollars of lost revenue for the government, and has been central to the development and enforcement of anti-fraud laws.
It is critical that whistleblowers understand the False Claims Act. This law establishes the procedures to report the fraud, institute a complaint, and potentially receive an award for the exposed fraud. Furthermore, the Act establishes the procedures and protections from retaliation for those individuals who on good faith report the fraud.
Because False Claims Act investigations frequently involve Medicare and other federal healthcare programs, individuals and organizations facing allegations may need legal guidance to explore legal options for Medicare fraud defense with Khouri Law before responding to government inquiries or enforcement actions.
What is the False Claims Act?
The False Claims Act is intended to address fraud against the government. First, the Act was passed during the Civil War. It was a response to contractors sending substandard supplies to the Union Army.
This Act prevents the submission of fraudulent claims for payment to the government. It also includes submitting claims to the government to get out of a government debt.
The False Claims Act has become a powerful tool for addressing fraud, especially in the healthcare industry, defense contracting, education, and government procurement.
The Act continues to succeed because of the whistleblower provisions. Whistleblowers are the main enforcement mechanism.
False Claims Explained
What makes a claim false? A false claim is an attempt to receive government payment through a scheme. A scheme is a plan, usually to commit fraud.
Fraud can happen in multiple ways, including billing bad claims to Medicare, providing false claims, and providing false certifications to get government payments.
The Act understands that mistakes happen, and it is not the intent of this Act to punish mistakes. Fraud, however, must be the intent of a claim.
The False Claims Act has a more expansive definition of “knowingly” than most people understand. It can cover knowing wrongdoing, ignorance of the truth, or careless about the truth or falsity of the information provided to the government.
This wide definition gives the enforcement agencies the tools to capture a broad array of deceitful behavior, while also giving the enforcement agencies the ability to distinguish between intentional behavior and unintentional behavior.
The Role of Whistleblowers Under the False Claims Act
The qui tam provision is one of the most unique components of the False Claims Act. Qui tam is a Latin phrase that allows individuals to sue in the name of the government.
Through this provision, whistleblowers that know of a fraudulent scheme have the ability to sue the alleged wrongdoers. The lawsuit is filed under seal which keeps the lawsuit confidential while the government is presented with the opportunity to investigate the claims.
During the investigation, the evidence is assessed and the authorities are able to determine if they will join the lawsuit. If the government opts-in to the lawsuit, they take over the case. If the government opts-out, the whistleblower has the ability to proceed with the case on their own.
The collaboration of citizens with government agencies is a successful formula to expose fraudulent schemes that would otherwise go undetected.
Why Whistleblowers are Important
Fraud is often committed in very specialized industries that leave little visibility to the outside world. Oftentimes the most informed individuals are the employees, contractors, consultants, and compliance officers.
Billing specialists might notice activities that indicate fraudulent ways to receive reimbursements. Physicians themselves might spot an inappropriate steer toward medically unnecessary procedures for profit. Administrators might detect unlawful financial arrangements or unlawful kickbacks.
Whistleblowers offer direct insight into an organization and are therefore often the first source of a case-building lead.
In the U.S., some of the biggest fraud cases and recoveries have originated from the testimonies of these brave people.
Advantages of Whistleblowing
The False Claims Act promises whistleblowers monetary compensation for helping in the recovery of defrauded assets.
Victims of fraud who help recover lost funds may receive a significant payment. The payment is dependent on many factors and is at the discretion of the government and the whistleblowing victim’s contribution.
This payment system exists for the significant sacrifices whistleblowers make, such as the disintegration of their workplace relationships and loss of their jobs.
The system in place for the recovery of the funds defrauded from the government is an important incentive for whistleblowers. In the last several decades, whistleblowers have helped recover funds that have been defrauded from the government.
Healthcare Fraud and the False Claims Act
The Fraud Act is most often enacted in the healthcare sector. Oversight on Federal healthcare programs, such as Medicare and Medicaid, is challenging, as these programs handle millions of claims annually.
Fraudulent schemes in healthcare commonly include billing for procedures that were never performed, unnecessary and fabricated procedures, falsified patient records, and improperly coded billings.
Illicit activities in the healthcare industry are often difficult to prosecute due to the complex nature of the industry itself. This is one of the reasons that whistleblowers are so important for uncovering these fraudulent activities.
In the context of compliance issues and Medicare-related investigations or billing fraud claims, companies and individuals may contact Khouri Law and other Medicare fraud defense attorneys to explore their options to better understand the legal landscape and their rights and obligations.
Regulations and procedures in the healthcare industry are very complex, and having the right attorney can help clients through the maze of complications presented by government investigations.
Fear of Complaints being Ignored
One of the main obstacles to people reporting fraud is the fear of complaints not being addressed. Employees may fear they will be reported for petty reasons and will suffer workplace vengeance, and promotions may be withheld.
The False Claims Act provides excellent anti-retaliation safeguards to eliminate the aforementioned obstacles.
It is unlawful for employers to report petty complaints against employees who genuinely suspect fraud and who report their suspicions or who participate in investigations involving the False Claims Act.
Retaliation grants the whistleblower the right to be compensated for lost wages as well as the right to be reinstated.
The safeguards fail to resolve issues of undue complaints, but do encourage whistleblowers to report fraudulent acts.
Government Investigation Process
The government will begin to investigate the fraud once the private citizen has acted as a special prosecutor.
This may involve reviewing financial records, interviewing witnesses, reviewing billing records, and speaking with subject matter experts. Due to the potential breadth of these investigations, the review period may take months, if not years, based on the complexity of the case.
Before deciding to take action, government agencies weigh the quality of the evidence and the potential severity of the alleged fraudulent activity.
The purpose of the investigative stage is to rigorously assess available evidence so that the appropriate enforcement action is taken.
For whistleblowers, the most common requirement is to have a lot of patience, as the authorities typically take their time conducting a thorough investigation.
Widespread Beliefs Concerning Whistleblower Actions
There is a long list of fallacies that concern whistleblower actions taken pursuant to the False Claims Act.
The biggest fallacy is that whistleblowers can only be employees. In fact, contractors, consultants, and vendors, among others, can all be whistleblowers.
Another common fallacy is that there is a case for every report. In fact, while reports of whistleblowing are important, the government takes a lot of time and care to evaluate the case for possible enforcement.
Finally, many believe that whistleblower laws trivialize the system. In fact, there is a lot of legal scrutiny in a False Claims Act case, and for the claim to be successful, the evidence has to be overwhelming.
The False Claims Act is a good example of a case where the plaintiff has to be very well informed, as there is a lot of legal complexity, especially in the area of adherence to a specific procedure and standards of evidence.
Experienced attorneys can help determine whether a claimant has a valid complaint, explain rights, maintain confidentiality, and help a claimant meet the required procedures and deadlines.
Technological Fraud and The False Claims Act
Growth and development in technology create new methods for detecting fraud. More sophisticated methods of fraud detection are employed by government agencies using artificial intelligence and data analytics.
In parallel with the government agencies’ developments, there are new challenges for compliance with government funded healthcare programs, new methods of delivering healthcare, and new digital services.
Even with all of these changes and advancements in technology, one of the best methods for reporting fraud remains the whistleblower. The reporting of fraud should not just be a numbers game. The interpretation of the data should include the human factor.
Fraud detection in a changing regulatory environment is the aim of the False Claims Act.
The False Claims Act
One of the most significant developments in the reporting of fraud to government agencies has been the development of the False Claims Act. It has recovered billions of dollars by encouraging whistleblowers to report fraud. Reported fraud has resulted accountability in many other industries beyond healthcare.
The success of this Act illustrates that the presence of educated citizens is critical to defend common goods and stop deceptive behavior. By providing financial rewards, anti-retaliation safeguards, and a well-established framework, the Act supports the responsible reporting of matters of concern, and supports just enforcement.
To protect oneself from potential employer retaliation for reporting fraudulent practices, it’s critical that the individual understand the legal options and protections available. As fraudulent practices continue to evolve and adapt, the need to expose these practices to protect the common good will not diminish.
