Trillions of dollars are paid out every year through government programs. With this much money passing hands, it can be difficult to track where all this money goes, which can provide the opportunity for fraud. Laws like the False Claims Act ("FCA") and the Whistleblower Protection Act ("WPA") were implemented to help protect the government and prevent and prosecute fraud. The FCA enables the government to prosecute individuals or organizations that have committed fraud, and the WPA protects employees from retaliation for uncovering and disclosing illegal behavior within an organization. The WPA also provides substantial compensation for those willing to bring forth evidence of fraud.
In September 2015, the Fourth Circuit agreed to hear the United States ex rel. Michaels v. Agape Senior Community, Inc., cv-15-2147, case in which Agape Senior Community, Inc. ("Agape") allegedly improperly billed Medicare and Medicaid for certain hospice services, thereby violating the False Claims Act ("FCA"). When oral arguments were held on October 26, 2016, the Fourth Circuit was unlikely to determine whether statistical sampling can provide evidence of FCA liability, which has been a decision many lower courts hoped would offer guidance.
Two former executives of the nursing home chain, American Senior Communities ("ASC" or the "Company"), James Burkhart ("Burkhart") and Daniel Benson ("Benson"), are facing charges for defrauding Medicare, Medicaid, and their own company. The two former executives were having vendors overcharge the company for services, some of which the government paid for, and had vendors pay the excess funds to them directly, equating to an estimated $16 million in overcharges. Both men face charges for conspiracy to commit mail, wire and health care fraud, mail or wire fraud, money laundering, and conspiracy to violate the Anti-Kickback Statute.
The Lehigh Valley Health Network ("Health Network") has reached an agreement to pay nearly $700,000 to the federal government to settle a qui tam lawsuit alleging that it violated the False Claims Act by overbilling multiple federal healthcare programs. Hospitals and treatment centers within Health Network were allegedly misrepresenting the medical services provided to patients, and billing programs such as Medicare, Federal Employees Health Benefits, and Workers' Compensation in excess of reimbursement policy allowances.
In March 2013, Esther Grace Sullivan, a sales representative and territory business manager at Atrium Medical Corp. ("Atrium" or the "Company"), alleged that the Company was paying doctors to use its iCast stents for unapproved uses, a violation of the False Claims Act ("FCA"). Medical stents are used to stop arteries from re-closing and Atrium's stents were approved to treat tracheobronchial obstructions, but doctors have used them for other vascular system purposes. The FCA claims against Atrium involved providing doctors dinners, giving them grants, and offering other kickbacks in order to incentivize them to use Atrium's medical stents. Although the government is typically involved in FCA cases, since these cases involve defrauding the government and cheating it out of large sums of money, the government was not interested in being part of the lawsuit. Nonetheless, the Plaintiff moved forward with her claims.
Medicare is a national social insurance program that provides health insurance to Americans who are aged 65 or older, younger people with disabilities, and people with end-stage renal disease and amyotrophic lateral sclerosis. As a social insurance program, it is largely funded by payroll taxes on employers and workers, and accounts for about 17% of the 2016 proposed Federal budget. The program contracts with regional insurance companies to process fee-for-service claims per year in order to provide health insurance options for eligible Medicare patients.
Both sides agreed to walk away from a whistleblower complaint on April 7, claiming that neither party had made payments or admitted fault. A set of workers had alleged that shipbuilder, Austal USA LLC ("Austal"), had defrauded the U.S. government by billing for higher salaries than it paid out.
The False Claims Act ("FCA" or "the Act") exists as an opportunity for citizens to bring the government's attention to fraudulent conduct that unduly costs the American taxpayer. While Abraham Lincoln originally signed the Act in 1863, the two most substantial components of the Act were implemented as amendments in 1986 and 2009. The two amendments lowered the standards of proof and increased the potential damages in these types of cases.
The U.S. Department of Justice issued a subpoena to Alere Inc. ("Alere" or the "Company") this March in connection with potential violations of the Foreign Corrupt Practices Act ("FCPA"). Alere operates primarily as a provider of point-of-service diagnostic devices and services for issues such as malaria and HIV. The launch of this investigation follows the Company's announcement that it is being acquired by Abbott Laboratories for $5.8 billion, which is expected to close by the end of the year.
Back in November, False Claims Act ("FCA") Defendants scored a huge victory in United States ex rel. Purcell v. MWI Corp. On February 8, the federal government asked the D.C. Circuit Court to reverse its judgment that held that Moving Waters Industries Corp. ("MWI)" was not liable for certifications it made to Nigeria because language in those certifications was ambiguous.