The federal government is cracking down on fraud in the healthcare industry, prioritizing False Claims Act (FCA) whistleblower complaints, and perhaps targeting the medical technology industry more than ever before. MedTech companies must understand FCA liability risks and step up their compliance programs, because your company could still have significant exposure even if you do not directly submit claims for government funds. This Insight explains everything the MedTech community should know and offers a five-step action plan.
Quick Background on the False Claims Act
- What is it? The civil False Claims Act (FCA) imposes liability on any person who, among other things, knowingly submits, or causes to submit, false claims for government funds. The law defines “knowingly” broadly and does not require proof of specific intent to defraud.
- Who enforces it? The FCA is enforced by the US Department of Justice (DOJ). In addition, private citizens may file FCA suits on behalf of the government in federal district court. In fact, these “qui tam” suits filed by whistleblowers (who are often employees of the company being sued) make up most FCA cases. Successful whistleblowers may receive a significant portion of the government’s recovery.
- How costly is noncompliance? An FCA violation can lead to (and this is per “claim”):
- a civil penalty (currently, between $14,308 and $28,619); plus
- three times the amount of damages the government sustained as a result of the violation.
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