Criminal Law
federal funding and then fails to use the money as directed or promised); (3) government set-aside contracts (e.g., a business that poses as being woman- or minority-owned, when in fact it is not, to receive government contracts set asides for such disadvantaged businesses); (4) emergency relief programs; (5) housing programs; (6) “reverse false claims” (e.g., bulk or mass mailers certifying that their mailing is eligible for fourth-class postage rather than third class, which carries a higher rate).
Health Care Fraud Today, the FCA is mainly used to recover losses from
Medicare and Medicaid fraud.31 In 2010, health care related
cases accounted for the majority of fraud settlements and judgments—the United States recovered $2.5 billion due to health care fraud in both qui tam and government-initiated cases.32
Te total False Claims Act recoveries for fiscal year 2010
were $3 billion, meaning that about 83 percent of the year’s recovery was related to health care fraud.33 As the examples listed earlier illustrate, health-care fraud
will nearly always exceed what has been taken from it even after the relator’s share and costs are deducted. Said another way, the relator makes the government whole for fraud the government knew nothing about or did nothing about. Te modern FCA also includes a civil penalties provision.
Specifically, the statute imposes liability from $5,500 to $11,000, indexed for inflation, for each false claim submitted for payment.29
Even if the actual damages resulting from false
claims are small—for example, a defendant who intentionally overbilled repeated small amounts to avoid detection—the penalties allow the wrongdoers to be punished, the government to be compensated for its losses, and future fraud to be deterred.
Modern False Claims Act Litigation
Beginning with the Civil War and continuing with the 1986 amendments, the FCA primarily targeted defense contractor fraud.30
Today, however the FCA widely applies to
almost any situation in which federal dollars are involved. Te range of FCA cases has grown and will continue to grow, limited only by fraudsters’ ingenuity and creativity. Tey include, but are certainly not limited to, fraud involving: (1) defense contracting; (2) federal educational grants (e.g., a researcher who receives
29 31 U.S.C. § 3729(a)(1)(G); 28 C.F.R. 85.3(a)(9). 30 Sylvia, supra note 2, at § 2:13.
26 Trial Reporter / Summer 2011
can manifest in many ways. For example, a nurse in a hospital or doctor’s office may choose to “blow the whistle” after observing physicians billing for services that were not actually provided to patients, such as blood tests or medical examinations. Health care fraud may also take the form of billing for medically unnecessary procedures, billing for services provided by untrained personnel (for example, a CT scan technician performing procedures designated as physicians’ services), “upcoding” (for example, billing for a 30-minute patient visit when the physicians only spent 5 minutes with the patient), or “unbundling” (billing extra for services already paid for as part of a global fee). One extensive kind of fraud scheme involves “off-label marketing,” in which a pharmaceutical company markets drugs for purposes not approved by the FDA. Other examples include paying unlawful remunerations or “kickbacks” to physicians in exchange for patient referrals or drug prescriptions; double billing; and providing inadequate patient care. Since November 2010, at
least 28 states—including Maryland—have enacted their own versions of the FCA.34
31 See Press Release, U.S. Department of Justice, supra note 24. 32 Id. 33 Id. 34 State “false claims” statutes have been enacted in at least California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Oregon, Rhode Island, Tennessee, Texas, Virginia, Wisconsin, and the District of Columbia. See CAL. GOV’T CODE §§ 12650-12656; COL. REV. STAT. §§ 25.5-4- 303.5 to 25.5-4-310; CONN. GEN. STAT. ANN. §§ 17B-301 to 17A-301P; DEL. CODE ANN. tit. 6, §§ 1201-1209; FLA. STAT. §§ 68.081-68.09; O.C.G.A. §§ 49-4-168 to 49- 4-168.6; HAW. REV. STAT. §§ 661-21 to 661-29; 740 ILL. COMP. STAT. §§ 175/1 to 175/8; IND. CODE §§ 5-11-5.5-1 to 5-11-5.5-18; LA. REV. STAT. ANN. §§ 46:437.1-440.3; MD. HEALTH GEN . §§ 2-601 to 2-611; MASS. GEN. LAWS 12 §§ 5A; MICH. COMP. LAWS §§ 400.601-400.613; M.S.A. §§ 15C.01 to 15C.16; MONT. CODE ANN. §§ 17-8-401 to 17- 8-412; NEV. REV. STAT. §§ 357.010 to 357.250; N.H. REV. STAT. ANN. §§ 167:61 to 167:61- e; N.J. STAT. ANN §§ 2A:32C-1 to 2A:32C-17; N.M. STAT. §§ 27-14-1 to 27-14-15; N.Y. STATE FIN. LAW §§ 187-194 (McKinney); N.C.G.S.A. §§ 1-605 to 1-618; OKLA. STAT.
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