The false claims act and its impact on medical practices

The federal False Claims Act (FCA) is designed to prevent a wide variety of misconduct when it comes to submitting claims for payment to the government for medical services. It provides serious consequences for a medical practice improperly receiving government funds due to intentional fraudulent activities.


The FCA was originally signed into law in 1863. It was considered a way to deal with the dishonest behavior perpetrated by military contractors who defrauded the Union Army. The most common use for the FCA in recent times has been to fight the fraud surrounding payments from Medicaid, Medicare and other healthcare programs funded by the federal government. The FCA has recently been amended by Congress to improve its ability to fight fraud in all the government healthcare systems.


Any violation of the FCA can require a medical practice to pay for damages as well as civil penalties. Each individual violation could be as much as $11,000. Liability for any violation is placed on any medical practice having individuals who acted with reckless disregard for their circumstances and did so knowingly. The Act has a whistleblower provision. A whistleblower who meets the requirements can file suit to enforce the terms of the FCA. If their lawsuit is successful, they will be able to get a significant percentage of funds the government recovers from any violations.

Medical Practices

In the case of United States v. Neifert-White company, the United States Supreme Court ruled the FCA was designed to identify all forms of fraud without qualification. The type of fraud that would cause a loss to the government. When a practice violates the FCA, it is legal for it to experience serious financial damage. This applies to any and all medical practices which are billing any type of Government program for services. It is designed to eliminate practices defrauding the government. This is the case if a practice is billing for services not rendered or upcoding where they provide a service, but bill for a more expensive service. A practice could also be in violation of the FCA if they intentionally withhold medically necessary services provided under the government plan. “The type of fraud covered by the FCA does harm people. If you have been impacted by these types of fraudulent activities, contact legal help immediately” says attorney Howard Ankin.

Financial Recoveries

Financial incentives for whistleblowers in the FCA has resulted in significant recoveries. Rewards being provided to competitors, employees and other whistleblowers have been in the tens of millions of dollars. The FCA’s whistleblower provision has proven to be a very effective law enforcement tool. It has caused medical practices who violate the FCA to become targets. Anyone who discovers their fraud is now a bounty hunter.

Initiating FCA Case

A case for the FCA can begin when the Department of Justice (DOJ) uses its authority to file a case as described in the FCA. When this happens, the DOJ will file a complaint against the offending party with the federal court of proper jurisdiction. They will describe in the complaint what violations of the FCA the healthcare providers are alleged to have committed. A defendant is then required to file a response in writing within two months after receiving a copy of the complaint. It then proceeds like a common lawsuit in federal court.

Qui Tam Lawsuit

The most common method for an FCA case to be started is by a private citizen. They will file a lawsuit known as qui tam. This is not the same as other types of legal proceedings. The private citizen will file a complaint under seal. This means it is done secretly and there is no public record of it with the federal district court where it is filed. The private citizen is not permitted to notify anyone their complaint has been filed. This includes the defendant. A copy of the complaint must be provided by the DOJ. This copy must include a written statement. It should explain the material evidence, as well as information the private citizen is providing in connection with what they are accusing a medical practice to have committed.

 The FCA has been designed to uncover a broad range of fraudulent conduct in the healthcare industry. Penalties for any violation are intended to be severe. The financial incentives provided by the FCA to competitors, employers and other whistleblowers have been successful in discovering and punishing fraud. The FCA is a set of statutes that all individuals involved in the healthcare industry should be aware are in place.