As front-line professionals responsible for dispensing medications to Medicaid beneficiaries, pharmacists are particularly well positioned to discover and report Medicaid fraud. As a result, pharmacists have initiated a number of highly successful qui tam actions under the False Claims Act. Time after time, successful qui tam whistleblower actions by pharmacist relators have successfully recovered taxpayer funds.
Why Whistleblower Laws Are So Important
Whistleblower laws form the foundation of the False Claims Act and are are crucial because they provide protection and incentives for qui tam whistleblowers (also called relators) to bring information to the government. Under federal and state laws, defendants who violate the False Claims Act are liable for triple damages (plus penalties) to the government.
Medicaid and the False Claims Act
Healthcare is the largest single cost in the federal budget – approximately 22 percent of the total — and the cost increases dramatically from year to year. With fraud following that money, the government is highly incentivized to investigate and prosecute corruption in the healthcare and pharmaceutical industries.
False Claims Act violations involve making fraudulent medical billing claims for payment from the government healthcare programs. One of the largest programs is Medicaid, healthcare for the indigent. Fraudulent conduct can involve overbilling, or receiving payments under these programs while not in compliance with healthcare regulations. Qui tam law suits brought by Medicaid fraud attorneys have recovered billions of dollars from companies committing health care fraud.
Billions in Recoveries For Qui Tam Whistleblowers
More than $30 billion has been recovered in Federal civil actions under the False Claims Act (“FCA”) since the statute which originated in the Civil War era, was amended in 1986 to provide enhanced rewards and protections for qui tam whistleblowers.
In fiscal year 2014, $5.69 billion in fraud against the government was recovered for taxpayers. Most of these cases were brought by qui tam relators, whistleblowers who come forward with their qui tam attorneys to report alleged fraud, and can receive 15-to-25 percent of the recoveries. This was another record year for Federal False Claims Act recoveries, according to the U.S. Department of Justice.
Without qui tam whistleblowers, billions of dollars of fraud payments or demands for payment hidden from the Government would have gone unnoticed. This stolen money would have remained in the pockets of individuals and entities responsible for the frauds, but courageous whistleblowers stepped up to return defrauded dollars to the U.S. Treasury and, as a result, shared in those recoveries.
Higher Penalties, Sentences Imposed in Qui Tam Whistleblower Cases
According to a recent study published by Andrew C. Hall, Gerald S. Martin, Nathan Y. Sharp and Jaron H. Wilde, when qui tam whistleblowers participate in financial misrepresentation enforcement actions, the wrongdoers face significantly increased penalties and prison time.
The study’s authors analyzed over a thousand qui tam financial fraud enforcement actions between 1978 and 2012 and determined 145 cases (almost 13% of the total) involved whistleblower information. Due to whistleblowers’ assistance, the government obtained an additional $20.75 to $21.27 billion in judgments, the study estimates. Prison sentences for guilty corporate executives and managers also increased by roughly two years when qui tam whistleblowers were linked with the enforcement action. [Read more…]
SEC Division of Enforcement Breaks Record in Judgements Obtained
The SEC Division of Enforcement recently released its fiscal year 2016 budget request, providing a detailed account of the Division’s activities during FY 2014 as well as an estimated budget for upcoming years.
Of particular note, the Division set a record by obtaining judgments worth more than $4.16 billion in disgorgement and penalties. The Office of the Whistleblower received approximately 3,600 leads from whistleblowers (more tips than ever before), made the largest number of awards, and announced its largest single award ever to an individual ($30 million). During the same time period, the Division’s total costs came in around $455 million. Thus, for every dollar spent, the Division returned more than nine times that amount.
Department of Justice Announces Record Amount Recovered in 2014
The Department of Justice (DOJ) recently announced that it has collected a record $5.69 billion in settlements involving fraud and false claims against the government for fiscal year 2014. The largest recoveries were in mortgage fraud and healthcare fraud, where the government obtained $3.1 billion and $2.3 billion respectively. Recoveries in qui tam whistleblower cases (actions brought by a whistleblower, known as a relator) totaled nearly $3 billion.
“It has been an extraordinary year for civil fraud recoveries, but the true significance is not in breaking records or making history; it is in the billions of dollars restored to the federal treasury,” said Acting Assistant Attorney General Joyce Branda.
Johnson and Johnson Pays $149 Million to Settle Risperdal Kickback Case
On November 4, 2013, after nearly six years of litigation, Johnson & Johnson, the self-proclaimed “family company,” agreed to pay $149 million to the federal government, the states of California, Kentucky, Indiana, and Massachusetts, and the Commonwealth of Virginia, to settle Medicaid fraud claims under the False Claims Act. (Johnson & Johnson Press Release)
The qui tam action alleged that pharmaceutical manufacturer Johnson & Johnson paid Omnicare pharmacies kickbacks for switching nursing home patients from their anti-psychotic to the Johnson & Johnson product Risperdal® to significantly increase sales and profits. Omnicare is the largest pharmacy supplying drugs to nursing homes in the United States. The qui tam lawsuit was brought by Chicago whistleblower law firm Behn & Wyetzner, Chartered and led by qui tam lawyers Linda Wyetzner, Michael Behn, and William W. Thomas. The Philadelphia whistleblower law firm of Kenney & McCafferty, P.C. also worked on the case.
Whistleblower Lawsuits Secure $2.9 Billion for the Federal Government Under the False Claims Act in Fiscal Year 2013
According to a press release issued by the Department of Justice, the federal government recovered over $3.8 billion from False Claims Act cases in 2013. Of the $3.8 billion, $2.9 billion resulted from whistleblower suits filed under the qui tam provisions of the Act. This is the fourth year in a row recoveries under the False Claims Act have topped $3 billion, and this year’s number is surpassed only by last year’s record-breaking recovery of nearly $5 billion. Although health care fraud continues to drive record recoveries, this year prosecutions of procurement and defense contracting fraud returned a record setting $890 million to the U.S. Treasury.
“It has been another banner year for civil fraud recoveries, but more importantly, it has been a great year for the taxpayer and for the millions of Americans, state agencies and organizations that benefit from government programs and contracts,” said Assistant Attorney General Delery.