The False Claims Act (FCA) allows others to initiate a claim on behalf of the government. If the claim moves forward, the government may choose to join. If it leads to a settlement or award, the individual who initiated the case gets a portion of the award. As a result, individuals are financially incentivized to come forward with allegations of FCA violations. This results in whistleblower, or qui tam, lawsuits.
Are these types of lawsuits common?
They are not uncommon. In a recent example, a medical manager initiated a case against her former employer, a medical supply company, and an insurance provider. The employee claimed her former employer and the insurance provider worked together to file false claims for payment from Medicare in violation of the FCA. More specifically, she stated the medical supply company was in violation of the FCA when it allowed the insurance company to view formularies or lists of products covered by insurance.
Ultimately, when faced with the allegations the medical supply company, Roche Diagnostics, and insurance provider, Humana Inc., chose to settle the claim.
How much do whistleblowers stand to gain from these types of claims?
In this case, the whistle-blower will get almost 30% of the settlement. At $12.5 million, this means the whistle-blower will get over $3.6 million with the rest going to the government.
What can other healthcare companies learn from this case?
This case provides another example of the government’s continued crackdown on FCA violations. Leaders of healthcare companies are wise to conduct internal audits to better ensure compliance. Those who face allegations of a violation have options. Healthcare leaders can build a defense and better ensure their rights are protected throughout the process.