The penalty phase of a whistleblower lawsuit against New Season Clinical Services, LLC and Delores Thomas, who were found guilty of submitting false Medicaid claims, ended with an order to pay $4.5 million.

New Season Clinical Services submitted false Medicaid claims for nearly two years. The whistleblower lawsuit, also known as a qui tam lawsuit, is brought under the False Claims Act.

The False Claims Act offers financial incentives for whistleblowers to report fraud by their employers by allowing the whistleblower to receive a percentage of what the government is able to recover from the defendant.

In the qui tam lawsuit against New Season Clinical Services, the magistrate judge recently recommended that the district court assess treble damages against the health care provider.

The defendant was convicted on criminal fraud charges in May 2014. Because the defendant was convicted of the criminal charges, she cannot contest liability for the civil damages. The government alleges that over 2,500 false claims were filed on behalf 66 participants.

While the 66 alleged participants were originally named in the whistleblower lawsuit, the judge dropped them from the civil case because neither the federal government nor the state of Virginia have tried to identify the participants or serve them.

According to the qui tam lawsuit, the defendant Thomas became a Medicaid provider for in-home therapy and mental health support services in 2008. The lawsuit alleges she ran her fraud scheme from January 2010 until November 2011. According to the criminal charges, Thomas received over $1.5 million in Medicaid benefit payments that she was not entitled to.

What is a Whistleblower Lawsuit?

Whistleblowers are persons who report fraud or illegal activities that are committed by their employers against the government. Common types of fraud include Medicare fraud, health insurance fraud, and government contractor fraud.

Qui tam lawsuits are filed by the whistleblower on the government’s behalf and, in return, the government will often share 15-30 percent of the recovered damages. Whistleblowers who file qui tam lawsuits are usually employees or former employees of the company, or contractors or subcontractors who have knowledge of the alleged fraud.

In order to entice whistleblowers to come forward and provide information about offending companies, the first whistleblower to file a qui tam is the person who will share in the damages. Laws exist to protect whistleblowers from retaliation by their employers. The court also tries to protect the identity of the whistleblower throughout the case.

Attorneys are looking for potential plaintiffs to bring qui tam lawsuits against various companies. Whether a whistleblower has a valid claim is a decision should be made on a case by case basis with the advice of a legal professional. Whistleblowers who have successful qui tam claims may receive significant compensation for coming forward.

The Whistleblower Lawsuit is Case No. 4:11-cv-00099, filed in the U.S. District Court for the Eastern District of Virginia, Newport News Division.