False Claims Act - Double Trouble
November 21, 2012
Taxpayers Against Fraud recently released information about fiscal year 2012 recoveries under the False Claims Act. The $9 billion collected in 2012 doubled that collected in 2011. The 2012 sum includes criminal fines and civil settlements from both federal and state FCA cases. The largest settlements were from the pharmaceutical and banking industries. Notably, 28 of the 30 largest settlements were related to whistleblower claims. This is not too surprising given the increased effort by the Obama Administration to stop fraud, waste, and abuse especially in the healthcare industry. In fact, as was previously reported here, the Affordable Care Act contains enforcement provisions that strengthen the Government’s ability to combat healthcare fraud.
Given the ongoing budget issues in federal and state agencies, the False Claims Act often provides an avenue for easy money for the agency. Whistleblower or qui tam actions have increased substantially over the last several years, and such claims will likely continue to accelerate. This is due in part to the fact that it now is easier for Whistleblowers to initiate cases and the increase in the enactment of state versions of the False Claims Act.
Any organization that receives or requests payment from Federal or State Governments for work or services performed must take action to assure proper compliance plans are well-prepared, fully implemented and carefully followed to minimize the risk of false claims investigations and/or qui tam or whistleblower actions. Effective compliance plans minimize and sometimes eliminate the risk of criminal prosecutions and will likely result in significant civil penalty savings.
William Powell is the attorney responsible for the content of this article.