Qui Tam Lawsuit Overview
If you have witnesses fraudulent behavior, you may be able to file a qui tam lawsuit on behalf of the federal government.
A qui tam suit, otherwise known as a whistleblower lawsuit, is legal action taken by a private citizen on behalf of the federal government. According to Wikipedia, “Qui tam” is an abbreviation for “qui tam pro domino rege quam pro se ipso in hac parte sequitur”, a Latin phrase meaning “[he] who sues in this matter for the king as well as for himself.” Qui tam lawsuits may informally be called “whistleblower” lawsuits.
False Claims Act
Most qui tam lawsuits are filed under the federal False Claims Act. This law was passed during the American Civil War to crack down on cases of fraud against the federal government. Instead of the government directly seeking justice for fraud, the False Claims Act allowed non-government affiliated individuals to take action on behalf of the justice department.
To entice private citizens into filing qui tam lawsuits, the False Claims Act allows plaintiffs (also called relators) to recover a percentage of the compensation earned by the government. Relators will usually receive between 15 and 25 percent of the award.
In order to qualify as a relator under the False Claims Act, an individual must legally qualify as an “original source” for fraudulent behavior. The relator doesn’t need to be directly harmed by the behavior in order to bring a lawsuit against a defendant.
When Can Fraud Prompt a Qui Tam Lawsuit?
Healthcare fraud is the most common type of behavior to trigger a whistleblower lawsuit. This type of fraud often makes false claims to programs such as Medicare and Medicaid which reimburse doctors and pharmacies for eligible transactions. Abuses under this category may involve a variety of fraudulent schemes by pharmaceutical companies, medical device companies, hospitals, and physicians.
Healthcare fraud claim settlements have been paid out in the tens of millions by all of the above listed organizations. The types of healthcare fraud activities can be broken down into those committed by medical device and pharmaceutical companies, and smaller violations undertaken by doctors and medical facilities.
Pharmaceutical and medical device companies may commit the following types of healthcare fraud:
- Price fraud: concealing discounts received from the government despite being obligated to pass those discounts on to Medicaid patients
- “Off-label” marketing: marketing products for uses not approved by the U.S. Food and Drug Administration (FDA) in an attempt to boost sales
- Defective devices: if a company knows of a defect with a product but conceals the defect from the government
Hospitals and physicians may commit the following types of healthcare fraud:
- Phantom billing: charging government insurance programs for services that were not provided to a patient
- Billing for unneeded procedures: providing a procedure and billing for it despite the care not being medically necessary; for example – ordering a costly MRI for a patient despite the patient only needing an X-ray
- Up-coding: billing medical procedures as a higher insurance code in order to recover more money from the government
- Kickbacks: illegally receiving money, products, trips, or other benefits in exchange for referrals or business
- Stark violations: violating the legal limits placed on physician referrals
Fraud may also occur in the financial industry, in the military by military contractors, and with grants – any of which are eligible for a qui tam suit.
