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What is a qui tam whistleblower lawsuit?

 

 

SEC whistleblower awards The False Claims Act authorizes whistleblowers, also known as qui tam “relators,” to bring suits on behalf of the United States against the false claimant and obtain a portion of the recovery, otherwise known as a relator share. The phrase “qui tam ” is short for qui tam pro domino rege quam pro se ipso in hac parte sequitur, meaning “who [qui ] sues in this matter for the king as well as [tam ] for himself.” U.S. ex rel. Bogina v. Medline Indus., Inc., 809 F.3d 365, 368 (7th Cir. 2016).

False Claims Act whistlebowers (also known as relators) are eligible to receive 10% to 30% of the recovery.  In an intervened case, the relator can obtain 15% to 25% of the recovery, depending upon the extent to which the person substantially contributed to the prosecution of the action.

In a non-intervened case, the relator can obtain between 25% to 30% of the recovery.  Additionally, a qui tam relator (whistleblower) who prevails in an FCA action—regardless of whether the government intervenes—is entitled to “reasonable expenses which the court finds to have been necessarily incurred, plus reasonable attorneys’ fees and costs.” 31 U.S.C. § 3730(d).  Qui tam whistleblower lawsuits have enabled the government to recover more than $60 billion.

The False Claims Act also protects whistleblowers from retaliation.

False Claims Act Qui Tam Whistleblower Lawyers

If you are seeking representation in a False Claims Act qui tam action, call our whistleblower lawyers today at 202-262-8959.  We also represent whistleblowers in False Claims Act retaliation and NDAA retaliation actions.

Examples of Successful Qui Tam Actions

Examples of the type of fraud that can qualify for a qui tam whistleblower award or bounty include:

  • Paying kickbacks to refer patients for services that will be reimbursed by Medicare;
  • Fraudulently inducing a contract, i.e., making false representations to induce the government to enter into a contract;
  • Bid rigging;
  • Violating good manufacturing practices;
  • Double-billing Medicare;
  • Defective pricing, including noncompliance with the requirement to submit current, accurate and complete certified cost and pricing data under the Truth in Negotiations Act;
  • Inaccurate disclosure of pricing information and practices, such as Hewlett-Packard’s $55 million settlement for providing incomplete commercial sales practices information to GSA contracting officers during contract negotiations and Informatica LLC’s $21.57 million settlement to resolve allegations that it provided false information concerning its commercial discounting practices for its products and services to resellers, who then used that false information in negotiations with GSA for government-wide contracts.
  • Billing Medicaid for unnecessary medical services;
  • Overbilling for services performed, such as Northrop Grumman’s $27.45 million settlement for overstating the number of labor hours its employees worked on two Air Force contracts by individuals stationed in the Middle East.
  • Providing defective products, such as Sapa Profiles Inc.’s $34.6 million settlement to resolve claims that it falsified thousands of certifications after altering the results of tensile tests designed to ensure the consistency and reliability of aluminum.
  • Falsifying admission criteria and regularly diagnosing patients with “disuse myopathy,” an invented medical term meaning generalized weakness, in order to qualify for higher levels of reimbursement as an Independent Rehabilitation Facility (IRF).  Encompass Health paid $48 million to resolve allegations that some of its IRFs provided inaccurate information to Medicare to maintain their status as an IRF and to earn a higher rate of reimbursement and that some admissions to its IRFs were not medically necessary;
  • Creating a fraudulent joint venture to secure government contracts that are set aside for businesses that participate in the Service-Disabled Veteran-Owned Small Business program.  In 2019, A&D General Contracting agreed to pay approximately $3.2 million for fraudulently obtaining over $11 million in government contracts which had been set aside for service-disabled veteran-owned small businesses.
  • Violating the federal Anti-Kickback Statute and the FCA by billing millions of dollars for unlawfully forcing patients to endure 72-hour hospital stays for observation and mental illness treatment against their will.  Pacific Health Corp. paid $16.5 million to settle claims that it doled out kickbacks for referrals of homeless patients and provided them with unnecessary treatments.
  • Making improper payments to doctors to get them to write prescriptions for two Teva products. In 2020, Teva agreed to pay $54M to settle a qui tam case alleging that it paid doctors speaker fees and pricey to prescribe multiple sclerosis drug Copaxone and Parkinson’s disease drug Azilect.
  • Paying doctors and kickbacks or financial incentives to get patient referrals.  In 2020, Agnesian HealthCare paid $10M to settle a qui tam case alleging that its compensation plan for doctors violated the Stark Law, the Anti-Kickback Statute, the federal False Claims Act and the Wisconsin False Claims by rewarding and offering incentives to its network of affiliated doctors to refer Medicare and Medicaid patients exclusively to Agnesian doctors and facilities.
  • Upcoding in the form of billing for 14,000-level tissue transfers, which should have been billed as lower-level wound repairs.
  • Making misrepresentations regarding certified cost or pricing data in violation of federal procurement laws and regulations.  See 10 U.S.C. 2306a; 41 U.S.C. Chapter 35; FAR 15.403-4 and 15.403-5.
  • Submitting to Medicare claims for medically unnecessary treatment. United States ex rel. Riley v. St. Luke’s Episcopal Hosp., 355 F.3d 370, 376 (5th Cir. 2004).  Medicare will only pay for inpatient hospital services if “a physician certifies that such services are required to be given on an inpatient basis for such individual’s medical treatment, or that inpatient diagnostic study is medically required and such services are necessary for such purpose.” 42 U.S.C. § 1395f(a)(3).
  • Billing federal healthcare programs for unnecessary medical testing.  In April 2022, Physician Partners of America LLC agreed to pay $24.5 million to resolve allegations that they violated the FCA by billing federal healthcare programs for unnecessary medical testing and services, paying unlawful remuneration to its physician employees and making a false statement in connection with a loan obtained through the Paycheck Protection Program.  DOJ alleged that PPOA caused the submission of claims for medically unnecessary urine drug testing by requiring its physician employees to order multiple tests at the same time without determining whether any testing was reasonable and necessary, or even reviewing the results of initial testing to determine whether additional testing was warranted.

False Claims Act Qui Tam Whistleblower Lawyers’ Answers to Frequently Asked Questions

qui tam whistleblower can be eligible for a large recovery.  But there are many pitfalls and obstacles to proving liability, and there are unique rules and procedures that govern qui tam whistleblower cases.  Therefore, it is critical to retain an experienced False Claims Act whistleblower lawyer to maximize your recovery.  This FAQ provides an overview of some of the key aspects of False Claims Act claims.

2022 Qui Tam False Claims Act Settlements

AmountViolationsDatePress Release from DOJ or Relator's Counsel
$260MMallinckrodt resolved allegations that it violated the FCA by knowingly: 1) underpaying Medicaid rebates due for its drug H.P. Acthar Gel; and 2) using a foundation as a conduit to pay illegal co-pay subsidies in violation of the Anti-Kickback Statute for Acthar. March 7, 2022Mallinckrodt Agrees to Pay $260 Million to Settle Lawsuits Alleging Underpayments of Medicaid Drug Rebates and Payment of Illegal Kickbacks
$48.5MIn the largest-ever False Claims Act recovery based on allegations of small business contracting fraud, TriMark agreed to pay $48.5 million to resolve allegations that its subsidiaries, TriMark Gill Marketing and Gill Group, Inc. improperly manipulated federal small business set-aside contracts around the country. TriMark identified federal set-aside contract opportunities for the small businesses to bid on using their set-aside status; instructed them regarding how to prepare their bids and what prices to propose; “ghostwrote” emails for those companies to send to government officials to make it appear as though the small businesses were performing work that TriMark was performing; and affirmatively concealed TriMark’s involvement in the contract. February 23, 2022Government Contractor Agrees to Pay Record $48.5 Million to Resolve Claims Related to Fraudulent Procurement of Small Business Contracts Intended for Service-Disabled Veterans
$34MEargo agreed to pay $34.37 million to resolve allegations that it submitted or caused the submission of claims for hearing aid devices for reimbursement to the Federal Employees Health Benefits Program (FEHBP) that contained unsupported hearing loss diagnosis codes. April 29, 2022Hearing Aid Company Eargo Inc. Agrees to Pay $34.37 Million to Settle Common Law and False Claims Act Allegations for Unsupported Diagnosis Codes
$24.5MPhysician Partners of America LLC (PPOA), its founder, and its former chief medical officer agreed to pay $24.5 million to resolve allegations that they violated the FCA by billing federal healthcare programs for unnecessary medical testing and services, paying unlawful remuneration to its physician employees and making a false statement in connection with a loan obtained through the PPP. April 12, 2022Physician Partners of America to Pay $24.5 Million to Settle Allegations of Unnecessary Testing, Improper Remuneration to Physicians and a False Statement in Connection with COVID-19 Relief Funds
$20MBayCare Health System Inc. and entities that operate four affiliated Florida hospitals (collectively BayCare) have agreed to pay the United States $20 million to resolve allegations that BayCare violated the False Claims Act by making donations to the Juvenile Welfare Board of Pinellas County (JWB) to improperly fund the state’s share of Medicaid payments to BayCare. The four hospitals are Morton Plant Hospital, Mease Countryside Hospital, Mease Dunedin Hospital and St. Anthony’s Hospital.
Specifically, the United States alleged that during this time, BayCare made improper, non-bona fide cash donations to JWB knowing that JWB would and then did transfer a portion of the cash donations to the State of Florida’s Agency for Health Care Administration for Florida’s Medicaid Program. The funds transferred by JWB to the state were “matched” by the federal government before being returned to the BayCare hospitals as Medicaid payments, and BayCare was thus able to recoup its original donations to JWB and also receive federal matching funds, in violation of the federal prohibition on non-bona fide donations. BayCare’s donations to JWB increased Medicaid payments received by BayCare, without any actual expenditure of state or local funds.
April 6, 2022Florida’s BayCare Health System and Hospital Affiliates Agree to Pay $20 Million to Settle False Claims Act Allegations Relating to Impermissible Medicaid Donations
$14.6MMassachusetts General Hospital, the clinical teaching arm for Harvard Medical School, resolved a federal whistleblower case stemming from allegations that some of the hospital's orthopedic surgeons engaged in overlapping surgeries that violated federal Medicare and Commonwealth of Massachusetts Medicaid rules. February 19, 2022MASS GENERAL HOSPITAL TO PAY $14.6 MILLION TO RESOLVE OVERLAPPING SURGERY CLAIMS; STANDARDIZED CONSENT FORMS TO BE AMENDED
$14MGeorgia Cancer Specialists, agreed to pay $8 million to resolve allegations that GCS solicited and received kickbacks for more than a decade, first from Option Care, an infusion pharmacy and medical equipment provider, and later from Amedisys, a Medicare nursing company. The whistleblowers received $2.4 million dollars, the maximum possible relators’ share.February 1, 2022Louis J. Cohen, Whistleblower Counsel, Announces Georgia Cancer Specialists Agrees to Pay $8 Million Dollars to Resolve Medicare Fraud Kickback and Stark Law Violations; Total Settlements Exceed $14 Million
$13MCardinal Health agreed to pay $13,125,000 to resolve allegations that it violated the False Claims Act by paying “upfront discounts” to its physician practice customers, in violation of the Anti-Kickback Statute.January 31, 2022Cardinal Health Agrees to Pay More than $13 Million to Resolve Allegations that it Paid Kickbacks to Physicians
$9MAerojet Rocketdyne Holdings Inc. and whistleblower Brian Markus settled a False Claims Act suit alleging that the company misled the government about its cybersecurity practices to gain missile defense and rocket engine contracts.April 29, 2022Aerojet Rocketdyne, Whistleblower Settle Cybersecurity Suit
$7.4MSix surgery centers and medical offices affiliated with Interventional Pain Management Center P.C. settled a qui tam action for mischaracterizing acupuncture as a surgical procedure in order to dishonestly obtain millions of dollars from Medicare and the Federal Employees Health Benefit Program.

The defendants treated patients with electro-acupuncture devices called P-Stim and NeuroStim/NSS (“NSS”). P-Stim and NSS procedures transmit electrical pulses through needles placed just under the skin on a patient’s ear. Both treatments are considered acupuncture under Medicare and Federal Employees Health Benefit Program (“FEHBP”) guidelines and are therefore ineligible for reimbursement by the government. From January 2012 through April 2017, the IPMC surgery centers and medical offices submitted claims to Medicare and FEHBP for P-Stim and NSS treatment and associated administration of anesthesia. In submitting the claims, the defendants used a billing code that mischaracterized the acupuncture treatment as a surgical implantation of a neurostimulator.
January 12, 2022Surgery Centers and Medical Offices in New Jersey Settle Allegations of Federal Health Care Fraud
$6.85MYRC Freight Inc, Roadway Express Inc. and Yellow Transportation Inc. agreed to pay approximately $6.85 million to resolve allegations that they knowingly presented false claims to DOD by systematically overcharging for freight carrier services and making false statements to hide their misconduct.March 14, 2022Freight Carriers Agree to Pay $6.85 Million to Resolve Allegations of Knowingly Presenting False Claims to the Department of Defense
$2.1MSHC Home Health Services of Florida, LLC and its related entities (collectively “Signature HomeNow”) paid $2.1 million to the United States government to settle claims of improperly billing the Medicare Program for home health services provided to beneficiaries living in Florida. The complaint alleged that Signature HomeNow knowingly submitted false or fraudulent claims seeking payment from the Medicare Program for home health services to Medicare beneficiaries who: (i) were not homebound; (ii) did not require certain skilled care; (iii) did not have a valid or otherwise appropriate plans of care in place; and/or (iv) did not have appropriate face-to-face encounters needed in order to be appropriately certified to receive home health services.May 5, 2022Home Health Company Operating in Florida Pays $2.1 Million to Resolve False Claims Allegations
$2MHayat Pharmacy agreed to pay approximately $2M to resolve allegations that it submitted false claims to Medicare and Medicaid in 2019 for two prescription medications and switched Medicaid and Medicare patients from lower cost medications to the iodoquinol-hydrocortisone-aloe cream and Azesco without any medical need and/or without a valid prescription.January 28, 2022Milwaukee Pharmacy Chain to Pay Over $2 Million to Resolve Allegations It Violated the False Claims Act
$930,000Comprehensive Health Services, LLC agreed to pay $930,000 to resolve allegations that it violated the False Claims Act by falsely representing to the State Department and the Air Force that it complied with contract requirements relating to the provision of medical services at State Department and Air Force facilities in Iraq and Afghanistan. The United States alleged that, between 2012 and 2019, CHS failed to disclose to the State Department that it had not consistently stored patients’ medical records on a secure EMR system.March 8, 2022Contractor Pays $930,000 to Settle False Claims Act Allegations Relating to Medical Services Contracts at State Department and Air Force Facilities in Iraq and Afghanistan

False Claims Act Qui Tam Whistleblower Protections

Courageous whistleblowers that come forward to report fraud deserve robust protection against retaliation.  Below is a list of common questions about key aspects of the anti-retaliation provisions of the False Claims Act and the Defense Contractor Whistleblower Protection Act.

Impact of Government Decision Not to Intervene in a Qui Tam Action

If the DOJ does not intervene in a qui tam action, the qui tam relator (whistleblower) can prosecute the claim on behalf of the government.  As DOJ argued in a Statement of Interest in United States ex rel. Fischer v. Cmty. Health Network, Inc., No. 1:14-cv-1215, “[t]he Government’s decision to decline certain allegations, however, does not give rise to any inferences related to the materiality or the merits of those allegations. Moreover, allowing a qui tam defendant to draw an inference that materiality cannot be established because the United States declined to intervene would significantly and negatively impact the statutory scheme established by Congress, which permits and encourages qui tam relators to proceed with FCA allegations even when the Government has declined to intervene upon those allegations. The Seventh Circuit has expressly stated that “[t]here is no reason to presume that a decision by the Justice Department not to assume control of the suit is a commentary on its merits.” U.S. ex rel. Chandler v. Cook County, Illinois, 277 F.3d 969, 974 n.5 (7th Cir. 2002). This presumption is not valid because “[t]he Justice Department may have myriad reasons for permitting the private suit to go forward including limited prosecutorial resources and confidence in the relator’s attorney.” Id.; see also U.S. ex rel. Atkins v. McInteer, 470 F.3d 1350, 1360 n.17 (11th Cir. 2006) (noting that the United States “may have a host of reasons” for declining to intervene that have nothing to do with the merits of a particular allegation). As the Supreme Court has recognized, there are real costs and burdens attendant to intervening in an FCA action. U.S. ex rel. Eisenstein v. City of New York, New York, 556 U.S. 928, 933-34 (2009). The United States may decline to intervene on meritorious claims when it has reason to believe that its resources would be better expended elsewhere, or that the burdens of litigating those claims are not justified by the potential recovery. “[T]he simple fact that the government did not intervene has no probative value and is not relevant.” U.S. ex rel. El-Amin v. George Washington Univ., 533 F. Supp. 2d 12, 22 (D.D.C. 2008). “[A]ssuming the government looked unfavorably upon each qui tam action in which it did not intervene,” as CHN contends, is not the law, and would be “antithetical to [the text and] the purpose of the qui tam provision[,]” which authorizes relators to litigate claims on behalf of the United States after declination. Id. at 21. Indeed, “the plain language of the [FCA] clearly anticipates that even after the Attorney General has ‘diligently’ investigated a violation [of the FCA], the Government will not necessarily pursue all meritorious claims; otherwise there is little purpose to the qui tam provision permitting private attorneys general.” U.S. ex rel. Berge v. Bd. of Trustees of Univ. of Ala., 104 F.3d 1453, 1458 (4th Cir. 1997); see also 31 U.S.C. § 3730(a) (“[i]f the Attorney General finds that a person has violated” the FCA, “the Attorney General may bring a civil action…” (emphasis added)); U.S. ex rel. Williams v. Bell Helicopter Textron, Inc., 417 F.3d 450, 455 (5th Cir. 2005) (finding that the FCA “does not require the government to proceed if its investigation yields a meritorious claim”). Thus, the mere fact that the Government declined to intervene as to some allegations in this case cannot support the conclusion that materiality is lacking as to those allegations.”

Qui Tam Whistleblowers/Relators Have Standing to Recover Assets to Satisfy a False Claims Act Judgment

As Judge Wyngate recently held in Aldridge v Cain et al, 2022 WL 985603 (March 30, 2022), a qui tam relator has Article III standing to bring an action to protect their interest in collecting on an FCA judgment:
In deciding whether a qui tam Relator had standing to bring an FCA action, the United States Supreme Court, in Vermont Agency, reviewed the history of qui tam actions in England and the American Colonies. The qui tam action seems to have originated around the 13th century in England, when private individuals who had suffered injury began to bring actions in the royal courts on both their own and the Crown’s behalf. See e.g., Prior of Lewes v. De Holt (1300), reprinted in 48 Selden Society 198 (1931) (as cited in Vermont Agency at 774-75). Beginning in the 14th century, common-law qui tam actions fell into disuse, but Parliament began enacting statutes providing for qui tam lawsuits. Some allowed injured parties to sue on behalf of their own interests as well as on behalf of the Crown. (citations omitted). Other statutes allowed informers to obtain a portion of the penalty as a bounty for their information, even if they had not suffered an injury themselves. (citations omitted).
Although common law qui tam actions seem not to have been in existence in the Colonies, the First Congress created quite a few qui tam causes of action by statute. See Vermont Agency at 774-75. Some of them allowed the injured parties only to collect a bounty. Others provided for both a bounty and an express cause of action.
Given the purpose of qui tam actions, and of the FCA, in particular, to curb fraud against the government, and the history of such actions as outlined by the Supreme Court, it only makes sense that a Relator, authorized to bring suit on behalf of the government, and as a partial assignee, would have the right to protect and recover debtors’ assets that should be made available to the creditors. This is consistent with the public’s interest in successfully enforcing the FCA and the Relator’s private interests. The interests of the government and the Relator are intertwined, rather than conflicting. United States ex rel. Kelly v. Boeing Co., 9 F.3d 743, 760 (9th Cir. 1993).
This court is persuaded that Aldridge has Article III standing and that his interests fall within the zone of interests required to bring this lawsuit under the federal Fraudulent Transfer Act.

Qui Tam Resources

False Claims Act

DOJ False Claims Act Primer

Guidelines for Taking Disclosure, Cooperation, and Remediation into Account in False Claims Act Matters

 

Jason Zuckerman, Principal of Zuckerman Law, litigates whistleblower retaliation, qui tam, wrongful discharge, and other employment-related claims. He is rated 10 out of 10 by Avvo, was recognized by Washingtonian magazine as a “Top Whistleblower Lawyer” in 2015 and selected by his peers to be included in The Best Lawyers in America® and in SuperLawyers.