Legal report looks at key False Claims Act cases of 2014


A report from the District of Columbia-based law firm Epstein Becker Green reveals important False Claims Act litigation developments within the healthcare industry in 2014. The report comes on the heels of a record-setting $5.7 billion in False Claims Act recoveries announced by the Department of Justice last month.

Epstein Becker Green looked at cases that provide more specific legal definitions surrounding FCA claims. For example, the report identifies the emergence of reverse false claims, or failure to return an overpayment from the federal government within 60 days. Although this rule has been in place for three years, at least one case (Kane v. Continuum Health Partners) focused solely on an alleged violation of the rule in which the defendant received 900 overpayments totaling more than $1 million. Although the defendants repaid the sum, they allegedly made payments over the course of two years.

The report also points to the widening scope of liability for FCA retaliation. Courts have previously been divided over how language in the Fraud Enforcement and Recovery Act of 2009 applies to individual liability, such as supervisors. However, at least one district court addressed the issue this year, ruling that "the 2009 FERA amendments were not intended to create individual liability for retaliation."

Additionally, the report addresses the following:

  • The divide between appellate courts concerning what factual details must be alleged in an FCA claim.
  • The definition of public disclosure versus an original whistleblower source.
  • Conflicting decisions regarding safe harbors provided by the Anti-Kickback Statute.
  • Whether poor quality care or services that have no value can be considered a false claim.

A recent PBS Newshour segment on whistleblower rewards associated with the FCA addressed whether the act actually deters fraud. Although the government has recovered a record amount of money over the past year, thanks in large part to whistleblowers, some advocates call for reform that will effectively prevent fraud before it occurs.

PBS also lists the top five biggest payouts to federal whistleblowers in 2014. Three of the cases involve healthcare companies, including the $2.2 billion settlement with Johnson & Johnson for both criminal and civil liabilities connected to the prescription drugs Risperdal, Invega and Natrecor.  

For more:
- read the Epstein Becker Green report
- see the PBS video and list

Related Articles:
False Claims Act enforcement continues in high gear
Close-up views of False Claims Act cases paint bigger picture
What healthcare providers should know about reverse false claims