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Important takeaway from hospital’s recent FCA win

The False Claims Act (FCA) is a federal law that provides accountability for anyone that submits false claims to the government. This law applies to any hospital or healthcare provider who submits claims for payment from Medicare or Medicaid, along with other government providers.

Essentially anyone with information about a violation could begin a claim. Why would someone do this? There are any number of reasons. A former employee could be disgruntled about how they were treated, a competitor might look for an edge or someone may have legitimate concerns. Whatever the reason, if the claim is successful, this individual also stands to profit. This is because the person who initiates the suit, the whistleblower, can get a percentage of any settlement or award.

Although this system can be effective, it can also lead to problems. In a recent case, a medical equipment company owner sued a local hospital under the FCA. The business owner stated the hospital was engaged in an illegal kickback scheme with two of her competitors. Ultimately, the court reviewed the evidence and found the claim “implausible.” It stated the hospital had a number of reasons to use the other businesses and that she did not provide an adequate explanation or evidence to back up her claim of illegal activity.

The case provides an opportunity to remind healthcare leaders to regularly review their practices to make sure they are in full compliance with the FCA. A competitor like in this case, or other individual could attempt to fight back using claims of a violation. Proactive steps to ensure compliance can prove the best defense in these types of situations.