The vast majority of physicians and other health care providers endeavor to provide services and bill for them in an ethical, legal manner. Trust is at the core of the federal government’s provider reimbursement scheme under Medicare and other federal health programs. The federal government relies upon health care providers submitting accurate and truthful claims. The fact that some health care providers have exploited federal health programs for illegal economic gain has resulted in laws intended to combat fraud and abuse, improve patient care and protect tax payer money. Currently, there is a strong push in federal law enforcement to aggressively enforce federal fraud and abuse laws.1
The Federal False Claims Act (FCA)2 makes it illegal for health care providers to submit claims for payment to Medicare that the provider knows, or should know, are false or fraudulent. The FCA contains a whistleblower provision that authorizes a private citizen or “relator” to file a lawsuit on behalf of the federal government, and entitles relators to a percentage of any recovery. FCA whistleblower cases often assert violations of other federal fraud and abuse laws, such as the Anti-Kickback Statute (AKS),3 the Physician Self-Referral Law (Stark Law),4 the Exclusion Authorities,5 and the Civil Monetary Penalties Law (CMPL).6
For relators, “blowing the whistle” becomes more than an abstract notion when it comes time to “plead,” or state, the claim in court. Assuming a claim has legal merit, getting it right in court is what determines success or failure. Following the law in reporting alleged wrongdoing is essential, including procedural law dictating how to properly plead a case. Rule 9(b) of the Federal Rules of Civil Procedure requires that “[t]he whistle must be blown not only loudly, but with Rule 9(b) particularity in the Complaint before the courts will listen.”7 The concept of “particularity” is important to a federal whistleblower’s opportunity for success. This means is that a whistleblower complaint must state “facts as to time, place, and substance” of the alleged wrongdoing, and that “an actual false claim for payment [was] made to the Government.”8
A whistleblower must allege not only a fraudulent scheme but also that the fraud resulted in the submission of false claims to the government. If the complaint fails to include details of the presentment of actual false claims, the case, even if meritorious, could be dismissed at the outset. It’s not enough to plead with particularity the circumstances establishing the elements of an alleged scheme to defraud; rather, the whistleblower must “meet the minimum pleading requirements for the actual presentment of any false claims.”9 A qui tam complaint that fails to do so is subject to dismissal. The rationale behind this strict pleading requirement is that a trial court should be satisfied from the complaint that there is a “sufficient indicia of reliability to support the assertion that the defendants submitted false claims.”10
Take, for example, a Medicare whistleblower case filed against a company providing medical testing services to long-term care facilities. The complaint alleged in detail six fraudulent schemes to defraud the federal government with unauthorized, unnecessary or excessive medical tests. However, the suit was dismissed because the relator failed to provide sufficient factual details regarding the presentment of actual claims to the government.11 In another healthcare qui tam case, the 11th Circuit appeals court affirmed a dismissal because the whistleblower failed to identify amounts and dates of charges submitted to the government.
As a practical matter, whistleblowers with direct knowledge of fraudulent conduct often lack access to specific evidence of the submission of false claims. Recognizing such evidence is typically in the defendant’s exclusive possession, courts often look to other factors in determining if there is “sufficient indicia of reliability” to allow a case to proceed. One important factor is the nature and extent of a relator’s personal knowledge. For example, a professional employee with knowledge of how the healthcare services she provided to patients were billed by her employer may be viewed as sufficiently credible to overcome a lack of detailed knowledge about the submission of individual claims.12
The rule requiring whistleblowers to plead federal qui tam cases with particularity serves an important purpose of alerting defendants to the precise misconduct they are charged with, and protecting against unsupported charges of fraud. Due to this and other procedural rules, however, it is paramount for potential whistleblowers to seek legal advice about whether and how to blow the whistle in court.
*Disclaimer: Thoughts shared here do not constitute legal advice. Please consult with an attorney to discuss your legal issue.*
About the authors
Jay Brownstein and Kevin Little are experienced litigators who often represent parties in complex disputes pending in state and federal courts and before administrative agencies, including whistleblower matters. To learn about the authors, please visit their websites at www.bnlawatlanta.com and www.ksllawfirm.com, or email them at firstname.lastname@example.org or email@example.com.
1 In addition to record civil recoveries in healthcare fraud cases alone (over $12 billion from 2009-2013), a multi-agency task force called the Health Care Fraud Prevention and Enforcement Action Team (HEAT) has led to a 75% increase in criminal prosecutions of Medicare fraud from 2008 to 2011 alone. Since 2007, HEAT’s Medicare Fraud Strike Force has brought criminal charges against over 1,400 defendants accused of collectively falsely billing Medicare more than $4.8 billion.
2 31 U.S.C. §§ 3729-3733.
3 42 U.S.C. § 1320a-7b.
4 42 U.S.C. 1395nn.
5 42 U.S.C. § 1320a-7.
6 42 U.S. Code § 1320a-7a.
7 U.S. v. McInteer, MD, et al., 470 3d 1350, 1357 (11th Cir. 2006)(“McInteer”).
8 McInteer, supra at 1357.
9 McInteer, supra, at 1358.
10 McInteer, supra, at 1358.
11 U.S. ex rel. Clauseen v. Lab. Corp. of Am., 290 F.3d 1301 (11th Cir. 2002).
12 U.S. v. R&F Properties of Lake County, Inc., 433 F.3d 1349, 1360 (11th Cir. 2005)(nurse practitioner’s knowledge that services were billed “incident to” physician services sufficient for pleading purposes).