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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 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).

Frequently Asked Questions About False Claims Act Qui Tam Whistleblower Law

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

AmountViolationsDateDOJ Press Release
$7.4MSix surgery centers and medical offices affiliated with Interventional Pain Management Center P.C. (“IPMC”) 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

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 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.