Federal False Claims Act

The Federal False Claims Act is intended to combat fraud in any government or government-funded program. In recent months and years, two elements of the act, the whistleblower and qui tam provisions, have taken on a more significant role. This is especially true with regard to healthcare fraud. The Federal False Claims Act has been around since the Civil War, when it was enacted to combat fraud by Union Army suppliers. For this reason, it is sometimes referred to as “Lincoln’s Law.” However, the False Claims Act became much less effective at combatting fraud over time, until 1986 when the statute resulted in a dramatic surge in claims.

Amendments to the act were largely in response to reports of abuses by defense contractors. Claims that the government was being charged thousands of dollars for items such as toilet seats raised serious concern. The 1986 amendments added increased protection and financial incentives for whistleblowers, and less restrictions on bringing actions against those found guilty of committing fraud.

The amendments have been remarkably successful. In fact, the False Claims Act is now recognized as the most effective tool at combatting fraudulent activity against the United States government. The federal government recovered more than $40 billion as a result of the False Claims Act between 1986 and 2013, and almost half of those funds came from healthcare-related cases. Whistleblowers have played an integral role in this success.

Prior to the 1986 amendments, would be-whistleblowers had little to no financial incentive for exposing possible fraud. In fact, they were more likely to face retaliation from the individuals or entity being exposed. However, with the amendment comes significant financial reward for unique information, whistleblower protection, and a reduction in the legal barriers that previously existed. The False Claims Act specifically protects whistleblowers from retaliation. In Section 3730(h) it states, "Any employee who is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment by his or her employer because of lawful acts done by the employee on behalf of the employee or others in furtherance of a [qui tam action], including investigation for, initiation of, testimony for, or assistance in a [qui tam] action filed or to be filed . . . , shall be entitled to all relief necessary to make the employee whole. Such relief shall include reinstatement ... 2 times the amount of back pay, interest ... compensation for any special damages ... including litigation costs and reasonable attorneys' fees ... An employee may bring an action in the appropriate district court of the United States for the relief provided in this subsection."

In accordance with qui tam provisions, any person can file a False Claims Act case on behalf of the government.The government recognizes that private citizens are vital to uncovering fraud that may have otherwise been overlooked. Considering that whistleblowers can be awarded between 15% and 30% for unique information that leads to financial recovery, the incentive to expose fraudulent activity is substantial. Since 1986, whistleblowers have been paid more than $2 billion in statutory rewards.

At Altman & Altman, LLP, our highly skilled legal team understands the complexities surrounding False Claims Act and Whistleblower cases. We will be by your side throughout the entire process to make sure that you fully understand your rights and options. Our lawyers will examine every detail of your case to determine the best strategy for moving forward. Altman & Altman, LLP represents clients across New England. Whistleblowers protect the safety and well-being of the general public. If you have information about fraudulent activity, we encourage you to come forward. Contact us today for a free consultation.