The False Claims Act allows private parties -- often the employees of companies that contract with the government -- to file lawsuits on the government's behalf. When these whistleblowers have evidence of fraud, waste or abuse in a government contract, they can sue to help the government reclaim the money. In exchange for their service, the whistleblowers receive between 15 and 30 percent of the total recovery as a reward.
In some cases, the government, typically represented by the Justice Department, takes over responsibility for trying these cases. Government contractors who are found in violation of the False Claims Act, they can be held responsible for three times the government's losses, plus penalties.
Companies accused of offering unlawful inducements to patients
The Justice Department recently intervened in a False Claims Act case against Arriva Medical LLC and its parent company Alere Inc. The allegations have not yet been substantiated, but Arriva, acting under Alere's oversight and approval, is accused of routinely supplying medically unnecessary glucometers to Medicare patients with diabetes. It is also accused of unlawfully waiving co-pays in order to induce patients to purchase its services and supplies.
Specifically, Arriva advertised "free upgrades" to all new Medicare patients' glucometers. This offer was misleading because Arriva already required every new patient to be given a new meter regardless of whether their existing meter was functioning. Further, that policy resulted in numerous patients receiving new meters, billed to Medicare, when those new meters were medically unnecessary.
In addition, the Justice Department claims that Arriva "made no meaningful effort to collect copayments" for the meters or for any diabetic testing supplies patients' purchased for use with the meters. The Justice Department characterizes this as essentially waiving the required copays. Waiving copays or providing other benefits in an effort to induce patients to buy a specific company's products is illegal under the federal Anti-Kickback statute, and billing such claims violates the False Claims Act.
The government is asking for you to step up
If you work in healthcare or another industry that contracts with the government, you may be in a position to notice wasteful, fraudulent or abusive practices such as offering unlawful inducements in exchange for choosing a specific supplier, for example. The government is relying on people like you to blow the whistle on wrongdoing.
Before you take any concrete step, however, have an attorney experienced with whistleblower laws review your case. This can ensure you receive your share of the recovery and help prevent unlawful retaliation.