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Qui Tam Whistleblower Lawsuits

by James Bendell on Apr. 20, 2013

Lawsuit & Dispute Litigation Government  Government Contract Health Care  Medicare & Medicaid 

Summary: Private persons can sue for fraud committed against government.

What is a Qui Tam Whistleblower Suit?

If you work for a company that submits bills to government programs such as Medicare or Medicaid and find yourself the subject of discrimination, harassment, or joblessness after reporting suspected billing fraud to your boss, federal law may provide you with a remedy. A little-known statute provides job protection plus a substantial monetary reward if you follow specified legal procedures.


Fraud against the government is widespread. For example, according to government audits, as much as 10% of Medicare charges are fraudulent. Some examples of fraud are:


  • Billing for the same service two or more times.
  • Charging for services that were never performed.
  • Billing for expensive equipment while only providing cheaper equipment
  • Someone other than a licensed physician completing the Certificate of Medical Necessity


A federal statute enacted during the Civil War "deputizes" private citizens to combat fraud against the government - not just health care fraud - and rewards them if the government recovers money as a result of information they supplied.

The Civil False Claims Act allows a private person to sue a person or company who is knowingly submitting false bills to the federal government. The Act also protects qui tam plaintiffs who are "demoted, suspended, threatened, harassed or in any other manner discriminated against in the terms and conditions of employment" because of actions taken to file the qui tam claim.  This provision allows re-instatement, double back pay, interest on the back pay, plus special damages including litigation costs and attorneys' fees.


More than 2,400 qui tam suits have been filed since 1986, when the statute was strengthened.  The federal government has recovered over $2 billion as a result of the suits, of which almost $340 million has been paid to the whistleblowers.


If the qui tam suit alleging false billings is successful, the whistleblower is  entitled to 15-30% of the government's total recovery, which includes damages for the false bills, supplemental damages, plus civil penalties of from $5,000 to $10,000 per false claim.


In March, 2013, it was revealed that Chattanooga-based nursing home chain Grace Healthcare LLC and its affiliate, Grace Ancillary Services LLC had agreed to pay $2.7 million, plus interest, to resolve allegations that they violated the False Claims Act by knowingly submitting or causing the submission, to Medicare and the Tennessee Medicaid program, of false claims for medically unreasonable and unnecessary rehabilitation therapy.


According to the settlement agreement, federal and state investigators alleged that from 2007 through June, 2011, Grace pressured physical, occupational and speech therapy staffs in at least ten nursing home facilities to increase the amount of therapy provided to patients in order to meet targets for Medicare revenue that were set without regard to patients’ individual therapy needs and could only be achieved by billing for a large amount of therapy per patient. 


If you are seeking redress for wrongful termination or employment discrimination, or are suspicious about unusual billing practices, ask your lawyer about the remedies offered by the False Claims Act.



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