Common False Claims

A person or company who in legal language “makes material misrepresentations” to obtain money from the government can be liable for false claims.

This kind of activity could create a case under the False Claims Act. If you are interested in filing for any of the common false claims listed, contacting a distinguished False Claims Act attorney may be critical to your case. Such common false claims include:

  • Overbilling:
  • Double billing:
  • Upcoding;
  • Billing for services that are not provided,:
  • Providing worthless material or services.

These are just a few of the most obvious and general categories of false claims made against the United States, which are actionable under the law.

Defining the False Claims Act

The federal False Claims Act includes provisions that create liability for attempting to defraud the government, including provisions for submitting a false claim.

It also includes provisions creating liability for:

  • Creating a false statement in order to get a claim paid;
  • Conspiring to submit false claims or to use false statements to get claim paid;
  • Making Reverse false claims. A reverse false claim can occur when a company holds on to property or money belonging to or owed the government.

Any of these types of False Claims Act liability are also subject to treble damages under the Act. That means if there is a judgment at trial the government would be awarded three times the amount of damages that it suffered because of the defendant’s actions.

Recent Amendments

There have been important changes in the way false claims cases are handled under the law over the years. For example, the government now has the authority to waive the restriction on the right of a person to file a case under the False Claims Act when there has been a public disclosure. In addition, the law’s success has led to additional whistleblower reward laws including the SEC Whistleblower Program, for example. The federal False Claims Act is the model for whistleblower reward laws generally and especially for state False Claims Acts.

Now there are at least 30 State False Claims Act and local statutes throughout the country. Some state False Claims Acts are restricted to healthcare programs, some state acts are restricted only to recovering state funds. Other state acts are not restricted to specific programs, and several allow an individual to sue if a county or a political subdivision, for example, has been the subject of the fraud not just when the state’s money is at issue.

The state acts can be filed in their own courts, but commonly, a nationwide scheme may be alleged in which both federal and state money is at stake. When this happens, the federal False Claims Act provides jurisdiction over state and federal law claims, so it is possible to file multiple claims at once under the federal False Claims Act.

Restrictions and Public Records

The False Claims Act has certain restrictions on who may file successfully and maintain an action. No action is possible if the government has already proceeded with the same facts in the civil court, and no action will be maintained if the government is already proceeding on any monetary penalty.

There is also a public disclosure bar. The public disclosure bar was amended in 2010 as part of the Affordable Care Act so that it is not the complete restriction it once was regarding individuals filing cases and it can be waived by the government

In addition, a whistleblower can file a case if they can established that they are an original source of the information, which usually means having independent knowledge of that information and providing information about the allegations to the government prior to filing a case in court.

False Claims Cases

False claims cases include everything from selling drugs, for off-label uses (meaning uses, which are not approved by the FDA) and or lying about their efficacy to get them approved, or marketing medical services and devices through kickbacks when the bill is paid by any government program or making misrepresentations about equipment and services provided by defense contractors. ,All of these areas have created cases, under the False Claims Act. Even within defense contracting and healthcare, there are specific kinds of cases and violations, which have created new and different subcategories of false claims.

Fraud Laws

Understanding common false claims requires an understanding of fraud laws and on government activity. For example, Medicare takes are a huge portion of the federal budget so there are many different kinds of services and products the government pays for from medical providers. These providers include everything from hospitals to pharmaceutical companies and medical device manufacturers. When those entities as with any provider engage in fraud, it can create False Claims Act violations.

In this regard, two more laws worth knowing about are the Stark Anti-Self-Referral Law and the Anti-Kickback Statute.

Both of these laws create liability when somebody engages in kickbacks in the medical field. It is illegal to incentivize medical care and have people pushed to one medical provider or another if that provider is charging government programs for the service.

Both the Stark Law and the Anti-Kickback Statute confer automatic False Claims Act liability if they are violated. The False Claims Act itself is extremely powerful as it allows for treble (three times) damages. Three times the amount of damages any fraud causes the government is what the defendant would be liable to pay in court.

How Does Healthcare Fraud Commonly Happen?

There are lots of ways medical providers have been found liable and for large amounts of money. Sometimes there are service providers who conduct medically unnecessary procedures on a routine basis. Other times, they simply charge for work that was not done.

Charging for work not done is a form of fraud, which does not occur solely within the province of healthcare. However, the way claims are billed to the government for healthcare matters can make it more likely that someone would bill for no actual work in this industry. In a bill charged to Medicare, for instance, the actual service is not provided directly to the government, but rather to the individual who needs health care. It can, therefore, be more difficult for the government to know exactly what happened, and there are some service providers who have tried to take advantage of this process.

Other times, a pharmaceutical company will market a drug for what is called an “off-label” use. Since doctors can prescribe a drug for any use, if a drug company illegally markets the drug for a use which is not approved by the FDA, it can create many sales paid by Medicare. While the doctor is allowed to prescribe a drug for any condition, the drug company cannot promote the drug for a use the FDA has not approved. So, such prescriptions can become the subject of a False Claims Act case.

Sometimes the way companies steer business can be the subject of a case. The Anti-Kickback Statute and the Stark Laws now broadly prohibit most practices that illegally influence doctors to use one form of medical service or recommend one form of medical service over another. Violations of those laws can make for strong cases under the False Claims Act.

Defense Fraud

The next largest area of False Claims Act cases involves defense contractor fraud. This is somewhat eerily appropriate, insomuch as the False Claims Act was originally created to fight fraud committed against the Union Army in the Civil War. Back in 1863, unscrupulous contractors were providing threadbare uniforms and taking advantage of the government at every opportunity, and that is how the law got its start. Alas, defense contractor fraud still occurs today.

Civil Fines

Civil fines can be awarded against the Defendants and the amount of the fines continues to rise as a result of legislation that requires those fines to increase with inflation. They can be assessed for each and every violation of the False Claims Act.

While civil damages are not always applied in common false claims settlements involving large amounts of damages, they do increase the potential liability for defendants and they do create additional exposure for them.

Rewarding Whistleblowers

The rewards to the plaintiff-relator, which is another name used to discuss an individual whistleblower or plaintiff under the False Claims Act, are meant to be considerable. The reward was intended to encourage the act of blowing the whistle on fraud committed against the government. A successful plaintiff-relator is in a position to obtain between 15 to 30 percent of any governmental collection depending on how the action proceeds. If the government intervenes and takes over the case, the private party relator can obtain 15 to 25 percent of a collection IIf the government does not take over the case but the individual plaintiff-relator decides to go forward with the case then the range is from 25 to 30 percent.

Some of the States, which have False Claims Acts modeled on the federal False Claims Act have even higher individual reward provisions than the federal law.