What payers need to know about the False Claims Act
FierceHealthPayer:Anti-Fraud spoke to Sean McKenna, J.D., to learn how the False Claims Act--a federal law dating back to the Lincoln administration--helps combat today's healthcare fraud. McKenna (pictured) is a partner in the Dallas office of Haynes and Boone, LLP. His professional background includes 15 years in law enforcement, most of which he spent working for the federal government as an assistant U.S. attorney.
FierceHealthPayer:Anti-Fraud: Why has the False Claims Act become such an important tool for the federal government in fighting healthcare fraud?
Sean McKenna: The False Claims Act (FCA) is the signature anti-fraud weapon of the United States because of broad liability provisions that can lead to significant damage awards for any person or company doing business with the federal government.
The statute authorizes not only treble damages but a mandatory penalty of between $5,500 and $11,000 per false claim. The FCA's severe remedies, along with attendant costs of responding to FCA lawsuits, the loss of goodwill and employee morale, and the specter of exclusion or debarment push most defendants to settle allegations before trial.
That's why, since 1986, the United States has recovered almost $40 billion under the FCA, with $12 billion from healthcare cases since 2009 and sometimes more than $1 billion from a single company.
Defendants face dire economic consequences if they lose and receive an adverse judgment. In the recent Tuomey Healthcare case, for example, the hospital system went to trial and lost twice. Now the system is appealing a $238 million judgment.
Because of those dynamics, the FCA has grown more powerful in recent years. Its "qui tam" provisions allow private citizens to bring claims on behalf of the federal government and even pursue those allegations on their own and receive a share of the proceeds if successful.
Virtually every large settlement against healthcare defendants began with a sealed complaint by a whistleblower (or relator). In 2013, relators received nearly $350 million from more than $4 billion in FCA recoveries.
Recent legislation under the Fraud Enforcement and Recovery Act and the Affordable Care Act strengthened the ability of government and relators to bring these cases and contributed to a significant increase in FCA cases filed. This trend will only continue.
Comments