Last Friday, the U.S. Supreme Court (SCOTUS) handed down an important ruling that will give healthcare organizations and practitioners relief against meritless whistleblower lawsuits. The ruling could result in saving organizations and practitioners their time, money, and reputation.

In a near-unanimous 8-1 decision, the SCOTUS affirmed the Third Circuit Court of Appeals on whether the federal government may obtain dismissal of a whistleblower lawsuit it declined to intervene under the federal False Claims Act (FCA). Upon a defendant’s request or its own volition, the federal government may move to voluntarily dismiss a FCA case over the objection of the whistleblower.

The False Claims Act

Under the federal False Claims Act (FCA), a whistleblower may file suit on behalf of the United States against anyone who commits healthcare fraud upon the Medicare or Medicaid programs. The FCA imposes civil liability on any individual or organization (e.g., physician, hospital, medical practice, lab, medical supply, pharmacy) who knowingly submits a false claim to a federally funded healthcare program. If found liable, a federal court will enter a judgment against the individual or organization for three times the amount received from the government and may impose civil penalties of up to $27,018 for each false claim.

The FCA requires whistleblowers to file their case under seal, outside the public view, and provide the U.S. Department of Justice (U.S. DOJ) or U.S. Attorney’s Office a...

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