The False Claims Act and How it Can Affect Your Practice

The False Claims Act was designed many years ago to prevent fraud and abuse against the government. In modern times, the act specifically relates to claims filed by medical providers that violate Medicaid and Medicare guidelines. These cases are hybrid in nature and can have a civil and criminal impact. Since it’s important for medical providers to maintain these contracts with these governmental insurers, it’s important that they’re treated seriously. This article will address matters under the False Claims Act and how they can be handled by a highly skilled and competent federal courts experienced attorney.

How False Claims Act Violations are Reported

There are many ways that charges can arise that place you at the target of a False Claims Act case. One of the most common ways is through fraud monitoring through federal insurers or an outside auditing agency. A recent spike in claims or significant changes in claims filings can set off a red flag to auditors. Another common way is through claims that are brought by a former employee or another “whistleblower.” These cases are often initiated out of spite or some perceived financial gain to the reporting party. Regardless of who initiates the claim, there are important steps to take if you’re on the receiving end.

Typically, if you’re under investigation you’ll be notified through the government, an auditor, or another third-party such as an insurance carrier. It’s important that you have all your documentation and records handy and ready to be inspected prior to the investigation. Once you’re aware that an investigation has been initiated, you’ll want to contact a healthcare defense attorney at once. They’ll be able to review the claim and help you respond appropriately. If you’re beyond this point, you’ll want to have your attorney involved in the investigation. They’ll be able to determine if the investigation is warranted and the effects it could have on your practice. It’s important that if you’re aware of the reporting party, you don’t have any contact with them regarding the matter.

Developing a Solid False Claims Act Defense Strategy

If the investigation yields unfavorable results, an attorney can prepare a winning defense on your behalf. Often, attorneys find that the extent of the damage from false claims resulted in negligence rather than blatant fraud and abuse. In this scenario, it’s much easier to justify that severe penalties aren’t in order. These cases can also come from errors that are through no fault of your own or your practice. The attorney will be able to point out the errors and may be able to have the case dismissed quickly.

The Pitfalls of Pro Se Litigation

Representing yourself in court is never a good idea. It’s especially advisable in the complex arena of healthcare law that has many moving parts. Our courts are designed for cases to be argued by attorneys that are educated in law and court procedure. The legal system is unsympathetic to those that simply don’t feel that they need to hire an attorney. The effects in a federal-level case can be devastating if not handled correctly the first time. You’ll find professional representation to be a wise and worthwhile investment.

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Legal Scenario: What Would You Do?

Scenario

You are a physician who runs a busy internal medicine practice that accepts Medicare and Medicaid patients. A former billing clerk at your office has filed a qui tam lawsuit under the False Claims Act, alleging that your practice routinely upcoded office visits and billed for services that were never provided.

What kind of penalties am I facing under the False Claims Act, and could this lead to criminal charges as well?

Attorney's Answer

Under the False Claims Act (31 U.S.C. § 3729), you could face civil penalties ranging from $11,665 to $23,331 per false claim submitted, plus treble damages — meaning three times the amount the government overpaid. Because your former employee filed as a whistleblower under the qui tam provision, they stand to receive between 15% and 30% of any recovery, which gives them a strong incentive to cooperate with federal investigators. What makes this especially serious is that False Claims Act cases involving healthcare fraud are often pursued in parallel by both the DOJ Civil Division and the U.S. Attorney's Office, meaning you could simultaneously face criminal prosecution under 18 U.S.C. § 1347 for healthcare fraud, carrying penalties of up to 10 years in prison per count. We need to act immediately to conduct an internal audit, preserve all billing records, and develop a defense strategy that addresses both the civil and potential criminal exposure before the government decides to intervene in the qui tam action.

This is general information only. Contact us for advice specific to your situation.

Risking your career and important contracts aren’t worth the effects they’ll have on your business and personal life. Getting in touch with a qualified attorney that routinely handles False Claims Act cases in federal court should be a top priority. We’ll be happy to provide you with valuable feedback on how we’ll be able to handle your case. Call us to schedule an appointment for your case review, today!