Since the mid-1980s, the federal False Claims Act has been the government’s primary tool for fighting fraud against government programs, including Medicare and Medicaid. The law’s qui tam provisions allow whistleblowers to bring lawsuits against companies and individuals that defraud the government, and whistleblowers have collectively received billions of dollars in rewards for blowing the whistle on fraud.
Recently, a medical product manufacturer was held liable in a false claims lawsuit, and the whistleblower, a former sales manager for the company, is expected to receive 20 percent of the $1.25 million recovery, meaning her share of the settlement comes to $250,000.
The lawsuit relates to the actions of California-based Fox Hollow Technologies from 2006 to 2007. According to the suit, Fox Hollow violated the False Claims Act by causing hospitals to submit false Medicare claims. Specifically, to get hospitals to use a medical product for removing plaque from blood vessels, Fox Hollow advised hospitals to bill for more expensive in-patient procedures when the plaque removal could have been done in a less expensive outpatient setting.
Fox Hollow’s use of this kind of financial incentive was part of a nationwide marketing strategy, according to the lawsuit.
EV3, which is a part of Covidien PLC, acquired Fox Hollow after 2007, and EV3 is responsible for paying the $1.25 million settlement.
Individuals who would like to learn more about the False Claims Act are encouraged to see our qui tam claims overview. With offices throughout the United States, Shepherd, Finkelman, Miller & Shah can handle whistleblower cases nationwide.