Watch Out For the Federal False Claims Act

Are you a physician or other healthcare provider who treats patients covered by Medicare, Medicaid, or any other program which is paid for, in whole or in part, by Federal Government funds? If you are, you must be mindful of the Federal False Claims Act, 31 U.S.C. §§ 3729 – 3733 (“FCA”). This statute, originally enacted in 1863 to combat fraud on the part of contractors supplying equipment and material to the government during the Civil War, has over the past several decades become a powerful tool to redress fraud against the Federal Government.

It is enforceable either directly by the Government, through criminal or civil actions, or by private citizens, called “relators,” by means of qui tam suits brought on behalf of the United States. In a successful qui tam action, the relator may receive a percentage of the amount awarded to the Government, ranging from fifteen to thirty percent of the award. According to the Department of Justice, in the fiscal year ending September 30, 2022, it recovered more than $2.2 billion in settlements and awards under the FCA.

The FCA applies to any person who knowingly submits, or causes to submit, false claims to the Government and provides for an award of three times the Government’s damages, plus an additional penalty tied to the rate of inflation. Regarding the practice of medicine, FCA actions most often arise through the submission of claims for reimbursement for treating Medicare or Medicaid patients.

Such claims may arise either from qui tam actions brought by “whistleblowers” (for the most part, disgruntled ex-employees), or as a result of investigations or audits conducted by Recovery Audit Contractors (“RACs”) under contract with the Centers for Medicare & Medicaid Services (“CMS”), based upon overbilling, over-utilization, improper coding, lack of back-up in charts, and just outright billing for services never actually rendered.

It is of utmost importance that you contact competent healthcare counsel as soon as possible after the threat of an FCA action arises. If you would like a consultation on this, or any legal matter, do not hesitate to contact Scaringi Law at 717-657-7770.