The False Claims Act and Qui Tam Lawsuit

The False Claims Act ( FCA) was originally enacted during the Civil War with the purpose of protecting the Union Army from unscrupulous suppliers. More recently, the FCA has been a powerful tool to fight fraud on the part of government defense contractors and since 1999 there have been an ever growing number of prosecutions concerning the sales, marketing and pricing practices of pharmaceutical companies.

The FCA combats fraud by imposing civil liability on individuals or entities that “knowingly presents or causes to be presented, a false or fraudulent claim for payment or approval” to the federal government. 31 U.S.C. § 3729.

Essential to the effectiveness of the FCA is the ability of whistleblowers to sue on behalf of the United States. This provision known as a “qui tam” provision allows the individual with evidence of fraud against the federal government, referred to as the “relator” to sue the perpetrator to recover the stolen funds. Qui Tam is an abbreviation of the Latin phrase “qui tam pro domino rege quam pro sic ipso in hoc parte sequitur” meaning “he who as well for the king as for himself sues in this matter.”

The FCA provides for up to treble damages, and the relator is entitled to receive between 15 and 25 percent of the amount recovered by the government through the qui tam action.

Prosecutors and whistleblowers have made headlines using the FCA to fight virtually every kind of healthcare fraud from billing for procedures that were not performed to off label marketing of pharmaceuticals. The New York Times reported on the largest FCA settlement to date in June 2012, “the British drugmaker GlaxoSmithKline agreed to plead guilty to criminal charges and pay $3 billion in fines for promoting its best-selling antidepressants for unapproved uses and failing to report safety data about a top diabetes drug. . . . The agreement also includes civil penalties for improper marketing of a half-dozen other drugs.”

However, liability extends well beyond the marketing of pharmaceuticals and into the R&D process. There is a growing trend in prosecutions associated with the falsification of data in laboratory studies and clinical trials. Should a pharmaceutical company outsource a portion of this function to a Contracted Research Organization (CRO), it is clear that pharmaceutical companies remain liable for the CRO’s actions.

Clinical and medical trial fraud occurs when a pharmaceutical manufacture provides false data to the FDA, withholds or alters negative data regarding the safety and efficacy of a drug, violates the recognized norms of research in order to influence trial outcome or fails to follow study protocol. An example of R & D fraud would be a defective pharmaceutical causing birth defects or suicidal behavior, where the manufacture concealed the risks and continued to market the drug falsely promoting the efficacy and miscoding side effects.

Clinical and medical trial fraud is actionable under the FCA as a form of healthcare billing fraud when Medicaid and Medicare (or other federally funded health program) make payments for drugs whose FDA approval was based on false information. With fraudulent FDA approval, the drug in question would not necessarily be safe or effective. And an unsafe and/or ineffective drug would not be reasonable or necessary—a requirement to be reimbursed under any federal healthcare program. Thus under the FCA, a whistleblower with knowledge of clinical trial fraud or falsification of data used in the FDA approval process, is able to bring a qui tam action against the pharmaceutical manufacturer.

Are Mental Diagnoses Based on Racial Bias?

Is the model of mental health based on an idealist concept of an educated European American?

Portrait of BoyThe American Psychiatric Association publishes the Diagnostic Statistical Manual (DSM). First published in 1952, the DSM classifies and categorizes mental conditions it supposes are mentally ill or defective. Alisha Ali, PHD, from NYU, stated “The central issue underlying the problem of racial bias in psychiatric diagnosis is the dominance of a white, Western viewpoint in psychiatry. Because of this viewpoint, the kinds of behavior most likely to be considered normal in DSM classification are those that are acceptable within mainstream society.” Ali goes on to say, “Even the inclusion of a list of so-called “culture-bound syndromes” in an appendix of the DSM perpetuates this biased viewpoint, because a clinician applying such culture-bound labels is nevertheless expected to adhere to the DSM authors’ approach to diagnostic formulation.”

Washington Post reporter Shankar Vedantam wrote in a 2005 article, “John Zeber recently examined one of the nation’s largest databases of psychiatric cases to evaluate how doctors diagnose schizophrenia . . . [t]he scientist found that blacks in the United States were more than four times as likely to be diagnosed with the disorder as whites. Hispanics were more than three times as likely to be diagnosed as whites. Zeber, who studies quality, cost and access issues for the U.S. Department of Veterans Affairs, found that differences in wealth, drug addiction and other variables could not explain the disparity in diagnoses: “The only factor that was truly important was race.”

Should a Mexican American child be labeled as ADD if the child cannot learn to read and write in English well? Should a Mexican American elderly women be labeled “hyper-religious” if they communicate with God or the Holy Spirit? The questions are moot. This is already being done. There are no absolute tests and subjectivity can be hard to interpret. However, the numbers and case studies speak for themselves. Those who feel they are being racially discriminated should take a stand. Failure to racially assimilate is not a mental disorder.

Whistleblower Alert: Is ECT Medically Necessary?

ECT machineThe government is currently paying for electro convulsive therapy (ECT) at a high cost to tax payers and at an immense profit to medical providers. Medicare, Medicaid, and TriCare often foot the bill despite questionable motivations and results. The practice of ECT is both condoned and encouraged by the American Psychiatric Association (APA), through the use of the Diagnostic Statistical Manual (DSM).

Whistleblowers are generally compensated for providing evidence of fraud relating to government programs such as Medicare, Medicaid, and TriCare. An attorney may assist a whistleblower to prepare a complaint on behalf of either or both the federal and state government so that funds may be recovered and the government has an opportunity to intervene. Cases are filed under seal and are highly confidential. Complex rules exist that regulate the conduct of whistleblowers.

Whistleblowers get terminated because they are a threat to continuing the fraud. The usual pattern is:

  1. Whistleblower gets the feeling that something is wrong in the workplace regarding schemes towards government funding and becomes concerned about participating or condoning of such action;
  2. Whistleblower points out illegal or fraudulent activity;
  3. Whistleblower becomes target to get handled or terminated;
  4. Whistleblower comes under close employment scrutiny and traps are laid; and
  5. Whistleblower gets terminated through the pretext of a carefully manipulated series of incidents.

Whistleblowers that do not come forward run the risk of facing civil and/or criminal consequences. When one experiences the feeling that something is wrong in the workplace regarding schemes towards government funded programs, smart and legal actions should be taken swiftly to avoid the inevitable consequences.

Do You Have Grounds for a Qui Tam Whistleblower Case?

The law allows a private citizen to file suit against another individual or company who is filing false bills or claims to state and/or the federal government.  The law also provides protection to those who are “demoted, suspended, threatened or harassed” for those acts done in reference to actions related to blowing the whistle on the fraud.

According to recent government audits, as much as 10% of Medicare charges are fraudulent.  Some common examples of Medicare/Medicaid fraud include:

  • billing more than once for the same service
  • kicking back money or items of value for ordering drugs or equipment
  • charging for services not performed
  • billing for expensive equipment and providing cheaper equipment instead

In 1986, the government gave the statute more teeth and made it easier for people to bring suit against offenders. Since that time, the government has recovered over $2 billion in fraudulently gotten funds and paid out approximately $340 million to whistleblowers.

Contact The Barrera Law Firm, PC at 956 428 2822 for assistance as to your rights as a whistleblower, how you put forth a claim for recovery and additional advice as to whether there are any criminal implications in your claim.