False Claim Act/Whistleblower Suits: The Basics of Whistleblower Suits (Qui Tam Claims) | Shapiro, Washburn & Sharp

In the USA, it’s no secret that large government programs like Medicare and Medicaid, with the vast resources oversight requires, are ripe for fraud. As enrollment in these programs increase, the opportunities for scamming the government increase, too. In Virginia and Washington, DC, as in states across the USA, false hospital claims for pharmaceuticals and patient care are examples of fraud that can run into the tens of millions of dollars. In addition to its own agencies, the government relies on whistleblowers to report illegal activity resulting in such waste. As more whistleblowers come forward to report employer fraud against the government, lawsuits to protect their rights are also on the rise.

The False Claims Act (FCA) protects people who report businesses that are defrauding the government. The common law principle of qui tam allows an individual to sue on behalf of the government, even if they are not an employee of the government. Until the last decade, most qui tam cases involved filings against defense contractors. In recent years, health care providers and pharmaceutical companies have received more attention. This is probably due to the fact that Medicare loses between $40-60 billion every year in fraud.

Why would someone become a whistleblower? Often they don’t intend to. They may notice an irregularity and tell their manager about it, thinking the company will correct the mistake. It’s often not until the company makes no effort to correct the irregularity that the employee feels obligated to blow the whistle. In 1986, changes made to the FCA encouraged more fraud reporting by offering more protections.

Qui tam provides a potential reward of 15 to 30 percent of any recovery secured by the government. Since 1986, attorneys representing whistleblowers can further demand that their client be made whole, that is, the client may recover their position (with seniority), receive twice the amount of back-pay plus interest as well as any other losses, recovery of attorney fees and costs incurred during litigation and pain and suffering. In 2009, Congress expanded these protections to cover agents and contractors.

The statute of limitation for qui tam claims is six years. Qui tam cases require that attorneys follow the FCA’s strict procedures for filing, service, investigation and maintaining the case under seal. This means attorney and client must be financially and emotionally prepared for a long course of action—sometimes years. Qui tam cases cannot be settled without the government’s consent.

Qui tam cases have a major public policy benefit:  reducing fraud that costs taxpayers millions of dollars.  For these reasons, qui tam cases may be viewed by the courts in a favorable light when the evidence of fraud and wrongdoing is clear and convincing.  Only experienced attorneys familiar with organizing major trials should represent you if you are a person who can expose major economic fraud perpetrated on the federal government.