At BU yesterday, the Health Care Fraud and Abuse did its first deep dive into the False Claims Act, the government’s primary weapon in this field and an extraordinarily versatile tool. The statute allows federal prosecutors to seek treble damages, plus penalties of $11,000 per false claim, plus possible exclusion and debarment from the government health insurance programs.
For reading, the class took on the statute itself, as well as Department of Justice statistical records showing how much money has been recovered over the years via the False Claims Act (over $40 billion). Moreover, the trend is clear that increasingly each year, the government relies on whistleblower suits for its investigative leads, as these suits now account for a greater amount of recovery that suits initiated by the government itself.
Several key points were stressed in the review of the statute:
How the liability provisions include not only the submission of false claims but causing them to be committed, conspiring to have them be submitted, and also the retention of overpayments.
How the intent standard of the law does not require “specific intent” but can be satisfied with a lesser showing of intent, like “reckless disregard” for the law.
How certain hurdles are embedded on the statute that can make success in these cases difficult to predict, like: the first to file requirement, the public disclosure bar, the Rule 9(b) specificity pleading standards, and 4) the “government knowledge” and “materiality” issues. And
How the federal FCA and 30 state FCAs inter-relate and how law enforcement coordinates on these matters.
Of course, we covered as well the role of whistleblowers and their counsel in identifying these cases, bringing them to the government, and helping the government investigate and prosecute them.
The students asked excellent questions throughout.
Next week: The FCA in action: theories of liability, First Amendment defenses to “off-label” cases, and the new materiality standard of Escobar.