Tips For Employment Lawyers: Spotting a False Claims Act Case

I’m renewing my Membership in the National Employment Lawyers Association today, even though, strictly speaking, I don’t handle very much in the way of traditional employment law.  I work with employment lawyers to handle False Claims Cases and just attended the organization’s outstanding conference in Atlanta.

It’s amazing how willing lawyers are to share their experience and expertise with each other—especially this group of employment lawyers. They work together to make sure that everyone is well informed and can help represent the people who need their help.

At the conference, I learned a lot about what employment lawyers need from those of us who handle whistleblower reward and False Claims Act cases.  It may seem obvious, but I got a lot of requests to learn what to look for, and how to explain to the people in the law office who have the difficult job of screening cases to try to determine what kind of claim the client may have.  Many lawyers I speak with wanted to make sure that they and the people answering the phone can be at least a little prepared to see if there is the possibility of a qui tam matter.

Word of the idea of being a whistleblower has spread. Smaller cities may have large health care facilities, nursing homes, or hospices.  Rural health care uses government funds. Defense Contractors have facilities throughout the country, and the government it seems is building something almost everywhere.  As a result, more people want to know what may create a case under the False Claims Act.

False Claims Basics for Employment Lawyers

Of course, there are some basics, which can help lawyers to ask and potential clients to know how to answer:

• The source of the money is important. Is the company/healthcare facility/fraudster obtaining funds from Medicare or another government program? Many states now have False Claims Acts so a State program may provide the basis for a case. If the company is a subcontractor amendments to the False Claims Act have made it more possible to file a case than in years past, even when the sub contractor did not directly get paid by the government, but rather by the prime.

• What did they lie about or falsify to get the money? It can strengthen the case if there is some form of “certification” or statement that the company makes explicitly to obtain funds.

Under the False Claims Act everything starts with knowing how a defendant obtained money from the government. It can, unfortunately, get complicated very quickly. From the standpoint of screening, though, —of being able to say pretty quickly this is not a False Claims Case and moving on to another issue, —just knowing if in fact there was a misrepresentation of some kind to obtain money from the government is important.

Health Care False Claims

By far the greatest number of cases are in health care.

If it’s just bad practices or even malpractice, that alone is not going to make a False Claims case. If there are facts that relate to the misrepresentation and to a government source of funds, it becomes important to delve into the systematic nature of the effort to obtain money through false claims. For example:

• Were the activities those of a rogue manager or were higher ups also involved in directing people to charge?
• Is the billing centralized in a department that likes to “up code” every bill that goes out of the hospital?
• Who told the prospective whistleblower how to bill or what to bill?
• Did they even perform the service they billed to the government?

Government Contractor False Claims

If it’s not a health care case, the more the client knows about the contract between the government entity and the contractor, the better. For example:

• What specifically did the contract require?
• What did the contractor lie about either to obtain the contract or in the performance of the contract?
• Did any government official approve the billing or the work done under the contract?
• Did somebody lie to the contracting officer?

Damages

Then damages (what the government, not what your client, lost) get tricky, but sometimes the client may know a lot about this too, so ask:

• How much was the contract?
• How much did the government lose as a result of this case?
• If it’s a health care case or really any other case it can be helpful to know if the fraud creates an ongoing safety or health issue as well. No U.S. Attorney wants a medical center committing fraud and endangering patients in her back yard.

There is a lot to ask about with respect to filing and determining if a case is worth pursuing. Before it is possible to get to the second level and determine if it is a good case and if there is enough money involved to make it worthwhile for a client and attorney to pursue, it is certainly worth seeing if you can establish the lie for the money and the source of the funds.