The False Claims Act: A Gold Mine for the Federal Government and Whistleblowers

The Federal False Claims Act (“FCA”) creates civil liability for entities that falsely or fraudulently contract with the government to provide services or goods in exchange of federal funds.

Since 1986, the Department of Justice (“DOJ”) has recovered approximately $34 billion from the healthcare industry under the FCA. In fiscal year 2016 alone, nearly $2.6 billion was recovered in health care cases. The primary reason for the massive recoveries is a provision that allows “whistleblowers” to share as much as 30% of the treble damages and mandatory penalties awarded under the law.

The FCA imposes civil liability on any person who: (i) knowingly presents or causes to be presented a false or fraudulent claim; or (ii) knowingly makes, uses, or causes to be made or used a false record or statement material to a false or fraudulent claim. An entity that violates the FCA is liable to the government for three times the amount of actual damages the government sustains, in addition to a civil penalty ranging between $10,957 and $21,916 per claim.

During the past three years, the Florida Department of Health (“DOH”) has been extremely active investigating hospices and home health agencies for violations of the False Claims Act. Under Medicare Part A, payments will be made only if the individual’s attending physician and/or the medical director certify in writing that the services are medically necessary.