A pharmaceutical company is currently appealing a record USD1.6 billion judgment in the US, arguing that a key part of the US False Claims Act (FCA) is unconstitutional. This case, now before the Court of Appeals for the Third Circuit, could have far-reaching consequences for how fraud against the US government is uncovered and prosecuted—especially by private individuals acting as whistleblowers.
The FCA is a US law dating back to 1863, designed to stop people and companies from defrauding the government. It makes it illegal to submit false or misleading claims for payment to government programmes, such as Medicare or Medicaid (the US equivalents of national health insurance schemes).
What makes the FCA unusual, and so powerful, is its “qui tam” provision. This allows private citizens, known as “relators”, to bring lawsuits on behalf of the government if they believe someone is cheating the system. The government may intervene as plaintiff and take over the action or, as occurs in many cases including the case on appeal, the government does not intervene, and the relator continues the litigation for the government’s benefit without the government’s input. The government may also directly bring claims under the FCA.
If a case is successful, relators often obtain a significant portion of the recovery for themselves. This financial incentive is a key driver behind many such claims.
The pharmaceutical company’s appeal...
OKLAHOMA CITY, OKLA. (KTUL) — A Broken Arrow dentist has agreed to pay more than $500,000 to the state after he allegedly violated the Oklahoma Medicaid False Claims Act. Attorney General Gentner ...