False Claims Act. False Claims Act Provides:

Transcription

1 False Claims Act Michael A. Hirst, Esq. Hirst & Chanler LLP 455 Capitl Mall, Suite 605 Sacrament, CA (916) False Claims Act Prvides: A persn wh knwingly submits a false r fraudulent claim t the gvernment, r makes a false statement t get such a claim apprved, is liable fr bth damages and penalties. 31 U.S.C. 3729(a)

2 Persn A persn is defined bradly as: Any natural persn, partnership, crpratin, assciatin, r ther legal entity. 31 U.S.C. 3733(l)(4) Persn includes a cunty r municipality, but des nt include a state r state agency. Ck Cunty v. U.S. ex rel. Chandler, 123 S.Ct (2003), Vermnt Agency f Natural Resurces v. United States ex rel. Stevens, 529 U.S. 765, 788 (2000) Claim A claim submitted t the gvernment is: any request fr mney r prperty if the gvernment funds a prtin f the mney r prperty requested subcntractr s claim claim submitted t state prgram 31 U.S.C. 3729(c)

3 False r Fraudulent A false r fraudulent claim is: an inaccurate, deceptive r misleading claim f entitlement t mney r prperty. 31 U.S.C. 3729(a) Knwingly The Act defines knwingly as: actual knwledge that the claim is false; deliberate ignrance as t the truth r falsity f the claim; r reckless disregard as t the truth r falsity f the claim. 31 U.S.C. 3729(b)(1)(2)(3)

4 Knwingly in cntext dctr bills Medicare fr service nt prvided; makes up patient and service date (actual knwledge) dctr tells ffice manager t increase revenues: I dn t want t knw hw yu d it, just d it (deliberate ignrance) Knwingly in cntext: dctr signs a stack f blank claim frms, certifying t accuracy f infrmatin submitted (reckless disregard) NOT: dctr errneusly bills Medicare fr a nn-cvered service; a reasnably prudent dctr wuld have knwn the service wasn t cvered (negligence)

5 Damages and Penalties A defendant is liable fr: three times the damages sustained by the gvernment because f the false claim; and a civil penalty f $5,500 t $11,000 per false claim (fr cnduct after ). 31 U.S.C. 3729(a) Damages and Penalties Example 1 false claim every week, resulting in $100,000 verpayment in a year $100,000 x 3 = $300, x $5,500 = $286,000 r 52 x $11,000 = $572,000 ttal: minimum = $586,000 r maximum = $872,000

6 Qui Tam Prcedure relatr files a cmplaint under seal serves cmplaint n the Attrney General and the U.S. Attrney, alng with a statement f substantially all material evidence and infrmatin the [relatr] pssesses 31 U.S.C. 3730(b)(2) Qui Tam Prcedure gvernment is then given 60 days t investigate the facts and allegatins while the case remains under seal 31 U.S.C. 3730(b)(2)

7 Qui Tam Prcedure gvernment may btain extensins f the 60-day perid fr gd cause shwn after 60 days and any extensins, gvernment must decide whether t intervene and take ver the case r decline t intervene; it files its decisin 31 U.S.C. 3730(b)(3) Qui Tam Prcedure nce gvernment either intervenes r declines, cmplaint is unsealed and served n defendant 31 U.S.C. 3730(b)(4)

8 Once Case Is Filed gvernment may pen parallel criminal case based n alleged cnduct f defendant ne r mre agencies will becme invlved: HHS-OIG FBI DCIS Once Case Is Filed U.S. Attrney s Office has its wn ACE investigatr and health care fraud auditr need fr agency crdinatin

9 Relatr s Share if the gvernment intervenes, the relatr gets 15-25% f the ttal recvery, depending n extent t which relatr substantially cntributed t the prsecutin f the actin 31 U.S.C. 3730(d)(1) Relatr s Share if the gvernment des nt intervene, the relatr gets 25-30% f the ttal recvery a prevailing relatr gets reasnable csts, fees and expenses frm defendant 31 U.S.C (d)(2)

10 Relatr s Share a prevailing defendant can recver fees and expenses frm a relatr nly if the Curt determines the actin was clearly frivlus, clearly vexatius r brught primarily fr purpses f harassment 31 U.S.C. 3730(d)(4) Relatr s Share relatr may recver even if he/she planned and initiated the fraud, as lng as the relatr isn t criminally cnvicted f such cnduct. The Curt is authrized t award less than 15% t such a relatr. 31 U.S.C. 3730(d)(3)

11 Prhibited Qui Tam Actins Only the first relatr wh files a cmplaint may maintain a case. Rush t the curthuse may nt help the gvernment 31 U.S.C. 3730(b)(5) Prhibited Qui Tam Actins Curt lacks jurisdictin when: actin is based upn publicly disclsed allegatins r transactins Public disclsure cmes frm: criminal, civil, r administrative hearing cngressinal, administrative, r GAO reprt, hearing, audit, r investigatin; r news media

12 Prhibited Qui Tam Actins An actin may be based upn a public disclsure if the relatr was an riginal surce 31 U.S.C. 3730(e)(4)(A) Original Surce A relatr is an riginal surce if he/she: has direct and independent knwledge f the infrmatin n which the allegatins are based; has vluntarily prvided that infrmatin t the gvernment befre filing the qui tam cmplaint; and

13 Original Surce (in the 9th and 2nd circuits) was a direct r indirect surce t the entity that made the public disclsure. 31 U.S.C. 3730(e)(4)(B) Original Surce Split f authrity (6 th Circuit and D.C. Circuit hld): t qualify as an riginal surce, infrmatin must be vluntarily prvided t the gvernment befre a relatr files a private actin arising ut f the fraud cncern that a relatr culd seek payment fr silence

14 Relatr s Emplyment Prtectin Any emplyee wh is discharged, demted, harassed r therwise discriminated against because f filing a qui tam cmplaint, r assisting in anther s qui tam case, is entitled t: all relief necessary t make the emplyee whle, including: Relatr s Emplyment Prtectin reinstatement t same senirity 2 times any back pay lst interest n the back pay cmpensatin fr damages sustained as a result f the discriminatin litigatin csts and attrney s fees 31 U.S.C. 3730(h)