Liability under the False Claims Act can result in potentially enormous payouts to individuals — and sometimes to companies — who alert the government to allegations of health care fraud.
The payouts to the whistleblower or relator, which can be as much as 30% of the proceeds of the action or settlement, do not always attract those with valid claims.[1] While many relators bring FCA qui tam actions in good faith, believing that claims submitted to the government violated the law, others may be driven by greed to bring actions unsupported by evidence.
But because of the highly punitive nature of the damages and civil monetary penalties in the statute and the enormity of the potential recoveries, sometimes far more than the actual loss to the government, any FCA lawsuit can turn into a bet-the-company case. FCA lawsuits can have particularly dire consequences for family-owned businesses and for communities where quality senior care is hard to come by.
It is this reality that provides both relators and the government with extraordinary leverage, often forcing defendants into settlements for monetary sums far in excess of what any actual exposure should be based on the law and the facts.
LINKS
Read "Qui Tam Order Shows Concern Over FCA Plaintiffs' Leverage," co-authored by Kya M. Henley and published by Law360. (Subscription)