(FCA) Federal False Claims Act Attorneys

Doctor Reviewing Information on a Laptop Computer

The Federal False Claims Act (FCA) is a crucial piece of legislation that healthcare professionals and entities must understand to navigate potential legal challenges. This article, with the insights of our team of federal false claims act attorneys, aims to provide detailed insights into various aspects of the false claims act, including penalties, violations, protections, and defense strategy questions that you should think about and ask when hiring a false claims act defense lawyer. Our objective is to provide knowledge to healthcare professionals that enables more informed decision-making when thinking about creating a compliance plan, hiring the right legal team, and helping to ensuring protection of rights and interests in the face of FCA violations.

We at Chapman Law Group specialize in federal false claims act defense law, and have entire teams dedicated to White Collar Criminal Defense, Healthcare Fraud Defense specifically, and Healthcare Compliance. Whether you seek to understand your rights, mitigate risks, or mount a defense against FCA violations and are looking to hire the right false claims act defense attorney, this article serves as a valuable resource to bolster your confidence and resilience in the legal arena, and we hope it brings you immense value.

Table of Contents

What is the Federal False Claims Act?

The Federal False Claims Act (FCA) is a legal tool in the government’s arsenal to combat fraudulent activities involving federal funds. The FCA carries significant implications for healthcare professionals and entities participating in federal healthcare programs such as Medicare and Medicaid. A healthcare provider billing for services not rendered, or falsely inflating claims to maximize reimbursement, could find themselves entangled in FCA violations.

Additionally, practices like accepting kickbacks, up-coding services, or unbundling procedures to increase reimbursement amounts are also considered red flags under the FCA. Furthermore, not following proper healthcare compliance guidelines will leave those who are knowingly and unknowingly breaking FCA guidelines liable to qui tam whistleblower claims. The importance of healthcare practitioners and organizations being diligent in their billing practices and adhering to stringent compliance measures cannot be understated. Hiring false claims act attorneys who specifically understand healthcare law is also paramount in avoiding potential FCA violations and their penalties.

What is the Purpose of the Federal False Claims Act?

The purpose of the Federal False Claims Act (FCA) is twofold: to combat fraud against the government and to encourage individuals with knowledge of such fraud to come forward and report it. By imposing liability on individuals or entities that submit false claims, the FCA aims to recover funds and deter fraudulent practices. Additionally, the FCA encourages whistleblowers to report fraudulent activities through qui tam lawsuits.

Enacted during the Civil War era, its inception aimed to safeguard government finances from unscrupulous contractors supplying the Union Army. Since then, it has evolved into a crucial instrument in deterring fraudulent practices across various sectors, particularly within healthcare.

What Does the Federal False Claims Act Forbid?

The Federal False Claims Act (FCA) forbids the submission of false or fraudulent claims for payment to the government. This includes claims made to Medicare, Medicaid, and other federal healthcare programs. Providers must ensure the accuracy and integrity of their billing practices to avoid violating the FCA.

Knowingly Submitting False Claims

One of the primary prohibitions under the FCA is the knowing submission of false or fraudulent claims for payment or approval by the government. This includes submitting claims for services not rendered, billing for medically unnecessary procedures, or misrepresenting the nature of services provided.

Concealing Overpayments

Healthcare providers are prohibited from knowingly concealing, avoiding, or decreasing an obligation to repay funds received from the government in excess of the amount owed. Failure to report and return overpayments promptly can result in liability under the FCA.

Retaliating Against Whistleblowers

The FCA prohibits retaliation against individuals (whistleblowers) who report suspected violations of the law to the government or participate in FCA investigations or proceedings. Healthcare professionals and entities are prohibited from taking adverse actions, such as termination or demotion, against whistleblowers in response to their protected activities. A whistleblowers who has been retaliated against can seek double the damages and other remedies.

Implications for Healthcare Professionals and Entities and The Importance of Compliance

For healthcare professionals and entities, compliance with the FCA prohibitions is critical to avoiding potential civil and criminal liabilities. Healthcare professionals and entities should implement healthcare compliance programs which include:

  • Policies and procedures addressing FCA requirements and guidelines.
  • Employee training on identifying and reporting potential FCA violations.
  • Internal monitoring and auditing of billing and documentation practices.
  • Mechanisms for reporting suspected violations and investigating allegations of wrongdoing.
  • Collaboration with legal counsel to address compliance concerns and respond to FCA investigations or litigation.

A false claims act lawyer who specifically specializes in healthcare will be able to walk you through the steps and help you generate a robust compliance program that can prevent a false claims act lawsuit.

What is a Qui Tam Lawsuit?

A Qui Tam lawsuit, also known as a whistleblower lawsuit, is when a private individual, known as a relator, brings legal action on behalf of the government against an entity or individual that has defrauded a government program. The term “Qui Tam” is derived from a Latin phrase meaning “he who sues on behalf of the king as well as for himself.” These lawsuits are a key tool in combating fraud against the government and are authorized under the False Claims Act. This qui tam action is what many times triggers false claims act cases.

How Does the Qui Tam Process Work?

In Qui Tam cases, the relator, often a current or former employee of the defendant, files a qui tam complaint in federal court alleging that the defendant has submitted false or fraudulent claims for payment to the government. The complaint is initially filed under seal, meaning it is kept confidential while the government investigates the allegations. During this time, the government decides whether to intervene in the case and take over primary responsibility for prosecuting the lawsuit.

If the government intervenes, it assumes control of the qui tam litigation, and the relator continues to participate as a party to the case. If the government declines to intervene, the relator may proceed with the lawsuit on their own, although the likelihood of success is generally lower without government support. In either scenario, the relator may be entitled to receive a percentage of any funds recovered by the government as a result of the lawsuit, typically ranging from 15% to 30%.

Qui Tam lawsuits typically conclude through settlements negotiated between the government, relator, and defendant, with legal counsel representing each party. These settlements involve monetary payments by the defendant, often substantial, along with remedial actions or changes in business practices to prevent future violations. If unresolved, qui tam cases proceed to trial, where providers face potential liability for treble damages, civil penalties, and legal fees, which can amount to significant financial repercussions and reputational harm.

What Are Three Major Categories of False Claims Act Cases?

In the context of False Claims Act (FCA) cases, violations can occur in three major ways, leading to different categories of cases. Understanding these categories is crucial for health care providers, entity reps, and FCA attorneys who represent them. These three major categories of the Federal FCA are:

    1. Healthcare Fraud: This category encompasses a wide range of fraudulent activities within the healthcare industry, such as submitting false claims for reimbursement to government healthcare programs like Medicare and Medicaid. Examples include billing for services not rendered, upcoding (charging for a more expensive service than provided), and providing kickbacks or inducements in exchange for patient referrals. Healthcare fraud cases often involve healthcare providers, including hospitals, physicians, pharmacies, and medical device companies.

    2. Government Contracting Fraud: Government contracting fraud involves contractors who provide goods or services to the federal government and then submit false claims or make false statements related to those contracts. This can include overcharging the government, delivering substandard goods or services, or failing to comply with contract requirements. Examples of government contracting fraud include inflating costs, misrepresenting product specifications, and falsifying performance reports.

    3. Financial and Banking Fraud: Financial institutions and entities involved in federally funded programs are subject to False Claims Act liability if they engage in fraudulent activities related to government funds. This category includes mortgage lenders, banks, and financial institutions that misrepresent information to obtain government subsidies, loan guarantees, or other financial benefits.

Types of False Claims Act Violations

In the context of False Claims Act (FCA) cases, violations can occur in three major ways, leading to different categories of cases. Understanding these categories is crucial for health care providers, entity reps, and FCA attorneys who represent them. These three major categories of the Federal FCA are:

    1. Kickbacks: Offering, soliciting, or receiving kickbacks in exchange for patient referrals or the purchase of healthcare products or services is prohibited under anti-kickback laws. Kickback schemes can involve cash payments, gifts, discounts, or other forms of remuneration intended to induce referrals or purchases.
    2. Stark Law Violations: Violations of the Stark Law, which prohibits certain physician referrals for designated health services, can result in False Claims Act allegations. This may include referrals involving financial relationships that do not meet Stark Law exceptions.
    3. Services Not Rendered: Billing for services that were never provided is a straightforward violation of the False Claims Act. This can include instances where healthcare providers submit claims for appointments, procedures, or treatments that never took place.
    4. Ghost Patients: Similar to billing for services not rendered, ghost patients refer to fictitious individuals for whom healthcare services are fraudulently billed. These patients may not exist at all, or their identities may be fabricated to facilitate fraudulent billing schemes.
    5. Unbundling: Unbundling involves billing separately for services that should be billed together as a single procedure. This practice artificially inflates reimbursement claims and can result in allegations of False Claims Act violations.
    6. Up-coding Services: Upcoding occurs when healthcare providers use billing codes that represent more expensive services or procedures than those actually performed. Upcoding can lead to higher reimbursement rates and is a common form of healthcare fraud.
    7. Lack of Medical Necessity: Billing for services that are not medically necessary is another violation of the False Claims Act. This includes ordering tests, procedures, or treatments that are not justified by the patient’s medical condition or clinical guidelines.
    8. Research Grant Fraud: Misuse of research grant funds or fraudulent reporting of research data can also give rise to False Claims Act liability. This may include falsifying research results, misrepresenting expenses, or failing to disclose conflicts of interest.
    9. Utilization of Excluded Providers: Employing or contracting with healthcare providers who have been excluded from participation in federal healthcare programs can lead to False Claims Act violations. Reimbursement claims involving excluded providers may be deemed false or fraudulent.
    10. Insufficient Physician Supervision: Billing for services performed by non-physician staff without adequate physician supervision can constitute False Claims Act violations. Healthcare services must meet applicable supervision requirements to qualify for reimbursement.
    11. Duplicate Billing: Submitting duplicate claims for the same services or procedures to government healthcare programs is considered fraudulent and violates the False Claims Act. Providers must ensure that each claim accurately reflects the services provided and is submitted only once.
    12. Accepting Money or Gifts From a Drug or Device Company: Accepting improper payments, kickbacks, or gifts from pharmaceutical or medical device companies in exchange for prescribing or promoting their products can lead to False Claims Act liability. This includes incentives such as speaking fees, lavish meals, or expensive gifts intended to influence prescribing behavior.

What is an Example of a Violation of the False Claims Act?

    • A Miami-based developer of electronic health records software products and related services will pay $3.8 million to resolve allegations that it paid unlawful kickbacks to generate sales of its EHR products. The FCA is involved here, because the kickback payments rendered the claims, which were submitted by the developer for federal incentive payments under the Medicare and Medicaid Electronic Health Records Incentive Programs (a.k.a. the Meaningful Use Programs) and the Merit-Based Incentive Payment System (MIPS), false.
    • Two Orlando, Florida surgery centers are paying $3.4 million for FCA violations after being accused of submitting claims for kidney stone procedures that were not medically justified and for engaging in an illegal kickback arrangement.
    • Two men from Gulf Stream, Florida and Fort Lauderdale, Florida agreed collectively to pay at least $4 million to resolve FCA allegations of engaging in schemes to generate prescriptions for compounded drugs, then referring those prescriptions to pharmacies in exchange for illegal kickbacks.
    • In May 2021, the University of Miami agreed to pay $22 million on allegations that it violated the FCA, by ordering medically unnecessary laboratory tests (for patients who received kidney transplants at the Miami Transplant Institute, which is operated by UM), then submitting false claims through both its lab and off-campus hospital-based facilities.

Elements of the Federal False claims act that False Claims Act Attorneys take into account when defending healthcare professionals and entities.
Chart showing six elements of the FCA

What Are the Six Elements of the Federal False Claims Act?

These six elements outlined are commonly recognized and defined within legal discourse surrounding the Federal False Claims Act (FCA). They represent key components that courts and legal experts consider when evaluating potential FCA violations. While there may be variations in how these elements are articulated in different sources, they reflect established principles derived from statutory language, case law, and legal analysis.

    1. False or Fraudulent Claim: Prohibits individuals or entities from knowingly submitting, or causing the submission of, false or fraudulent claims for payment to the government. This encompasses various forms of deceit, such as billing for services not provided, inflating costs, or misrepresenting the nature of services rendered.
    2. Knowledge: To establish liability, it’s crucial to demonstrate that the individual or entity acted with knowledge of the falsity of the claim. This can include actual knowledge, deliberate ignorance, or reckless disregard for the truth. Lack of intent to defraud does not absolve liability if the individual or entity should have known about the false claim.
    3. Deliberate Ignorance: This occurs when an individual intentionally avoids confirming the truth or falsity of certain information. For example, a manager who chooses not to review a test or report and instead certifies its compliance without proper examination is demonstrating deliberate ignorance of the accuracy of the information.
    4. Materiality: The false or fraudulent claim must be material to the government’s decision to pay or approve the claim. In other words, the misrepresentation must have the potential to influence the government’s payment decision. Courts typically assess materiality based on whether the government would have paid the claim had it known the truth.
    5. Payment by the Government: Applies to claims submitted to, or intended for payment by, the federal government. This includes claims submitted to government healthcare programs such as Medicare, Medicaid, or TRICARE, as well as contracts, grants, or other agreements with federal agencies.
    6. Damages and Penalties: Violations can result in significant civil and criminal penalties. Civil penalties may include treble damages (three times the government’s actual damages) plus fines for each false claim submitted. Criminal penalties may involve imprisonment and substantial fines for individuals or entities convicted of knowingly submitting false claims.

What is the Penalty for Violating the Federal False Claims Act?

The penalties for violating the Federal False Claims Act (FCA) are severe, reflecting the government’s commitment to combating fraud and abuse in healthcare and other sectors. If found liable under the FCA, individuals and entities may face both civil and criminal consequences.

False Claims Act Civil Penalties

Violators may be subject to civil penalties that include:

    1. Treble Damages: Violators may be required to pay three times the amount of damages sustained by the government as a result of the false claim.
    2. Financial Penalties: As of August 1, 2016, penalties have increased to $10,781-$21,563 per false claim, plus triple the government’s damages, attorney’s fees, and costs. The new penalty applies to claims submitted after November 2, 2015. Penalties are assessed on a per claim basis and each false claim carries its own penalty.

False Claims Act Criminal Penalties

Individuals and entities found criminally liable may face:

    1. Imprisonment: Violation of the false claims act is a felony, and healthcare providers and other violators who knowingly submit fraudulent claims to the government with the awareness of their falsity can be sentenced to up to five years in prison per claim.
    2. Fines: Criminal fines for FCA violations can reach up to $250,000 for individuals and $500,000 for companies per felony conviction. Misdemeanor convictions carry fines of up to $100,000 for individuals and $200,000 for companies, per false claim.

These penalties underscore the seriousness of FCA violations and highlight the importance of developing a compliance plan in your practice to help prevent complications with healthcare laws and regulations. Healthcare professionals and entities must also be diligent in ensuring the accuracy and integrity of their billing practices to avoid facing these severe consequences.

Are There Any Safe Harbors from the Federal False Claims Act?

Healthcare professionals facing the Federal False Claims Act (FCA) often seek clarity on whether any safe harbors exist to shield them from potential liability. In legal terms, a safe harbor refers to a provision in a law or regulation that specifies certain conduct or activities that are deemed compliant with the law, even if they might otherwise be considered violations. Essentially, safe harbors offer protection from prosecution or penalties for actions that fall within their defined parameters. Here are some key safe harbors examples under the FCA:

    1. Compliance Programs: Implementing effective compliance programs can serve as a form of safe harbor by demonstrating a commitment to preventing fraud, waste, and abuse in healthcare operations. These programs should include policies and procedures designed to detect, prevent, and correct potential violations of law. By maintaining robust compliance initiatives, healthcare providers mitigate the risk of FCA enforcement actions.
    2. Voluntary Disclosure Programs: Some federal healthcare programs offer voluntary disclosure protocols that allow healthcare providers to self-disclose potential violations in exchange for leniency or reduced penalties. Participating in these programs can provide healthcare professionals with a mechanism to address compliance concerns proactively and potentially avoid harsher penalties.

While Stark Law exceptions and Anti-kickback safe harbors are not technically part of the FCA itself, they are closely related in terms of regulatory compliance and enforcement. Healthcare providers must adhere to these laws as well, as they are often interconnected in healthcare regulatory compliance law, meaning violations of these laws can trigger liability under the FCA. Here’s why they are relevant:

    1. Stark Law: The Stark Law prohibits physicians from referring Medicare patients for certain designated health services to entities with which they have a financial relationship, unless an exception applies. While the Stark Law itself does not involve false claims or fraud directly, violations of the Stark Law can lead to allegations of submitting false claims for reimbursement, which would fall under the purview of the FCA. Thus, compliance with Stark Law exceptions is crucial for healthcare providers to avoid FCA liability.
    2. Anti-Kickback Statute (AKS): Similarly, the AKS prohibits healthcare providers from offering, paying, soliciting, or receiving remuneration in exchange for patient referrals or the generation of business reimbursed by federal healthcare programs. Like the Stark Law, violations of the AKS can intersect with the FCA if they involve submitting false claims for reimbursement. Compliance with AKS safe harbor provisions can help mitigate the risk of FCA enforcement actions.

How Can Healthcare Professionals Defend Against False Claims Act Allegations?

    1. Conducting Internal Audits: Regular audits of billing practices can help identify potential compliance issues early on, allowing healthcare professionals to address them promptly and effectively.
    2. Healthcare Compliance Programs: Developing and implementing comprehensive compliance programs tailored to the specific needs of the healthcare practice can significantly reduce the risk of FCA violations. These programs demonstrate a commitment to compliance and can serve as a valuable defense in case of allegations.
    3. Seeking Legal Guidance: Consulting with experienced healthcare defense attorneys who specialize in FCA cases is crucial. These attorneys can provide expert guidance on responding to FCA allegations, walk you through the legal process, and with their specific knowledge in healthcare, protecting the rights of healthcare professionals.
    4. Cooperating with Investigations: It’s essential for healthcare professionals to cooperate fully with government investigations and provide any requested information promptly. Demonstrating transparency and cooperation can help build trust with investigators and potentially mitigate penalties.
    5.  Negotiating Settlements: In some cases, negotiating settlements with the government may be the most practical way to resolve allegations. Experienced healthcare fraud defense attorneys can assist in negotiating favorable settlements that protect the interests of healthcare professionals and avoid prolonged litigation.

Federal False Claims Act Lawyers

Throughout this article, we’ve broken down the Federal False Claims Act (FCA) and its implications for healthcare professionals. It’s clear that understanding this complex legislation is paramount for those operating in the healthcare industry, and we hope this detailed yet brief breakdown provided you with value that you can now use when faced with violations, or for looking for the right team to help you tackle said violations and/or future prevention. Whether you’re a physician, healthcare administrator, or representing an entity providing medical care, we cannot stress enough the importance of finding an attorney who specializes in healthcare to represent you.

Our team of seasoned healthcare fraud defense attorneys is committed to safeguarding your interests and guiding you through every step of the legal process. From compliance programs, to internal audits, and defending against FCA investigations, we offer strategic solutions to protect your practice from potential liabilities. Don’t risk facing the full brunt of FCA penalties without first consulting a healthcare defense attorney. Chapman Law Group is your steadfast advocate in healthcare fraud defense. Contact us today to learn how we can help you defend against, and prevent false claims act violations.

Need an Attorney? Contact us now!
or Call us at: 1 (877) 234-5911

"*" indicates required fields

This field is for validation purposes and should be left unchanged.

Got A Question?

Contact me now to schedule a consultation.

Other Practice Areas​

Health Care Fraud/
Criminal Defense

Related Case Results

Related Blog Posts

FREE Health Care Newsletter

Stay up to date on the latest news in health care law!

FREE eBook!

Click the link below to download our compliance eBook now!

Got A Question?

Contact me now to schedule a consultation.
Chapman Law Group Favicon

This website uses cookies to ensure you get the best experience on our website.

Send this to a friend