News / Blog

What Is Qui Tam? The False Claims Act & Whistleblower Law Explained

Qui tam lawsuits are civil actions that private individuals may take to court. These individuals have direct and independent knowledge of fraud against the government. However, there are specific limitations that you must consider if you are facing such a lawsuit. Here’s a closer look at this kind of law.

What Is a Qui Tam Lawsuit?

A qui tam lawsuit is a type of civil action brought in federal court where an individual, known as a “relator,” files a suit on behalf of the United States against another party alleged to have committed fraud against the government. If the qui tam relator prevails in the lawsuit, they are typically entitled to a portion of the recovery.

The qui tam provision of the False Claims Act (FCA) is the primary statutory authority under which qui tam lawsuits are brought. The FCA imposes liability on anyone who “knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval” to the federal government.

One notable qui tam lawsuit involved St. Jude Medical Inc. in the case known as “United States ex rel. Debbie Burke v. St. Jude Medical, Inc., No. 16-cv-3611 (D. Md.).” In this case, St. Jude agreed to pay $27 million after Debbie Burke filed a lawsuit against them for allegedly selling defective heart devices.

Furthermore, St. Jude implanted the devices into patients with insurance under federal health care programs. Despite knowing the defective status, they proceeded with their fraudulent activities. Burke was one of the patients who received the defective medical devices meant for recall.

What Does Qui Tam Mean?

“Qui tam” means “in the name of the king” and is the shortened term for the Latin phrase “qui tam pro domino rege quam pro se ipso in hac parte sequitur.” This phrase roughly means “he who sues in this matter does so on behalf of the king as well as himself.”

Examples of Qui Tam Lawsuits

Examples of qui tam lawsuits against companies that are defrauding the government include:

• Overbilling for Goods or Services: If you know a company charging for goods or services at unusually higher prices, you can file a qui tam lawsuit. Similar cases involve these companies charging for services or goods but never providing them.
• Overcharging for Prescription Drugs: Some pharmacies may practice “padding,” which involves marking up prices without telling anyone before selling them. This could also include falsely reporting the quality of their medications or failing to test them properly.
• Defrauding the Medicaid Program: Medicaid fraud is a serious matter that can result in large fines or imprisonment. Such cases usually involve the intentional provision of false information to obtain medical care or services. Other cases fall under medical identity theft, where someone uses another person’s medical information to obtain the government program’s healthcare benefits.
• Committing Medicare Fraud: Medicare fraud is when doctors, medical providers, or even Medicare beneficiaries willfully defraud the government program. They could be deceiving the program to obtain unapproved payments or even receive payments higher than the approved amount. For instance, a doctor could bill Medicare for an MRI when they only performed an X-ray.
• Evading Tax or Committing Tax Fraud: Tax fraud occurs when individuals or entities use illegal means to avoid paying taxes. Essentially, individuals or corporations commit tax fraud schemes by misrepresenting their income to the Internal Revenue Service.

If you face allegations of such fraudulent crimes, consider seeking assistance from a seasoned qui tam attorney to defend your case. Legal experts know how to navigate the system and protect you against these kinds of allegations.

Who Can File a Qui Tam Lawsuit?

Relators must have direct and independent knowledge of the alleged fraud. In other words, they cannot bring the suit based on public information or media reports.

Often, employees of a company alleged to have committed the fraud are those who come forward and bring a qui tam lawsuit. However, competitors or contractors can also obtain information about fraud, making them ideal candidates to file the lawsuit.

While these “whistleblowers” file the qui tam lawsuit on behalf of the United States, an attorney files the lawsuit on their behalf. These lawyers will share the title of qui tam relator if they file the suit through them.

The relator’s legal team will provide supporting documents. These must offer specific details of the alleged fraud against the government. Whistleblowers then get rewards for reporting proven fraudulent acts.

Under the FCA, qui tam lawsuits generally involve violations of the following nature:

• Knowingly presents false claims for payment or approval
• Knowingly makes false records or statements important to fraud claims for payment
• Knowingly avoids an obligation to pay the government

What Is a Whistleblower?

Simply put, a whistleblower is someone who reports fraud and associated crimes that could potentially endanger another. These people tend to work in the organization where the alleged fraud occurs — although being an insider is not a requirement to qualify as a whistleblower and file a qui tam lawsuit. As long as a person can disclose information about wrongdoings that would otherwise be unknown, they can be a whistleblower.

Following procedures is critical to being a whistleblower. For example, an employee who plans to blow the whistle on a company first needs to file a complaint internally. Once a complaint is filed, an investigation will likely follow. If the outcome of this investigation reveals that the allegations were correct, then the company may take appropriate corrective measures. These could involve terminating the employees involved in the fraud or implementing new policies and procedures to avoid future issues.

Qui Tam Whistleblower Incentives

In a qui tam lawsuit, the relator essentially acts as a private attorney general on behalf of the government. As an incentive to bring these suits, the FCA allows the relator to keep a portion of any recovery. The relator can receive anywhere from 15-25% of the total recovery. Depending on various factors of the case, the amount may increase up to 30%.

One factor affecting the incentives received is whether the government intervened in the suit. There are higher chances of getting more rewards if the government declines to get involved with the case and proceeds to trial.

Conclusion

Qui tam lawsuits incentivize people to come forward by allowing them to keep a portion of any money recovered. If you are on the receiving end of a quit tam lawsuit, it is crucial to consult with an experienced attorney. These legal experts can review the claims and determine the best approach for defense against these allegations.

Fenton Jurkowitz Law Group has seasoned attorneys with significant experience prosecuting and defending FCA cases. Our expertise is rooted in our understanding of the Medicare program, allowing us to navigate the legal system and represent your stance. Learn more about the range of our success.