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We are attorneys that investigate False Claims Act cases nationwide, including in the state of New Jersey for Medicare fraud, tax fraud, contractor fraud and more against a range of employers including healthcare providers, medical device companies, defense contractors, and pharmaceutical companies. We stand ready to provide a free case evaluation to you; please call us today.

FALSE CLAIMS ACT CASES IN THE NEWS

The Sixth Circuit Court of Appeals recently reversed an $82,000,000 judgment under the False Claims Act limiting a governmental theory of False Claims Act liability.  In United States Ex Rel Williams v Renal Care Group, Inc., No. 11-5779, 2012 WL 4748104 (6^th Cir. October 5, 2002), the Sixth Circuit rejected the Government’s assertion that taking advantage of loop holes in federal programs for the purpose of maximizing profits necessarily begets a false claim.

In the late 1990’s, Renal Care Group, Inc. formed a wholly owned subsidiary to provide equipment and supplies to patients.  Renal Care Group provided dialysis services and equipment to patients with in-stage renal disease.  RCG formed the subsidiary expressly to obtain certain Medicare reimbursements that were only available to companies that provided equipment and supplies, not services.  In other words, patients that RCG, as a service provider, was not itself entitled to collect but could collect through the wholly owned subsidiary that it formed. The facts show that RCG played a dominant role in its subsidiary’s corporate structure, and the profits and expenses of the two entities were comingled.

The Sixth Circuit Court of Appeals looked at two crucial elements of False Claims Act liability, falsity and knowledge.  The Sixth Circuit rejected the government’s argument that the subsidiary was merely an alter ego of RCG.  The Court disagreed with the Government’s position that the subsidiary should be disregarded, and the Court noted that the parent/subsidiary structure, even if designed solely to increase corporate profits, did not contravene the legislative purpose of the statute.  The Court noted in its opinion that “why a business ought to be punished solely for seeking to maximize profits escapes us.”

As to the issue of knowledge, the Court noted that to be liable under the False Claims Act, the defendants must have either actual or constructive knowledge that their actions violated Medicare regulations.  As there was no actual knowledge in this case, the Court examined whether or not the defendant acted with reckless disregard.  The Court did not find any reckless disregard according to the following seven factors:

1.         The defendants sought outside legal counsel concerning the legality of the subsidiary structure.

2.         Outside legal counsel sought clarification of the regulations from the federal agency that administers Medicare.

3.         Outside legal counsel memorialized the conversation with the official of that agency in which the official had affirmed the company structure.

4.         The defendants were aware of other dialysis providers in the industry who had created subsidiaries for the same purpose.

5.         Industry publications had encouraged the use of these Medicare reimbursements to increase profits.

6.         The subsidiary was incorporated separately from RCG, and had its own Medicare supplier number.

7.         The subsidiary was forthright about its ownership structure, repeatedly disclosing to the Government that it was owned by RCG.

In our opinion, the Williams case provides a good example of when the Courts will limit the reach of the False Claims Act in the area of regulatory compliance.  The Sixth Circuit Court of Appeals in its opinion set forth that the False Claims Act was not the proper means of enforcing complex and ambiguous regulations where, as the facts showed in this case, RCG attempted via numerous ways to show that it was trying to comply with the provisions and spirit of the Medicare regulations.  The above seven facts are specific examples of the medical company’s efforts to comply with Medicare regulations.

In many other instances, there are companies that do not act in good faith in terms of Medicare regulations.  Companies on a daily basis take advantage of Medicare regulations, and our firm stands ready to discuss the specific situation with you on a confidential basis.

Does this sound familiar? We would be honored to help you. You may have some additional questions about False Claims Act claims. If you would like more information on False Claims Act cases, please continue reading as we will accept nationwide case evaluations to try and help you pursue justice.

THE SCOPE OF FRAUD

Amazingly, some estimates have suggested that approximately 10% of the entire annual United States budget is lost to companies or individuals who are defrauding the government. The United States Federal budget for 2010 was $3.456 billion, meaning around $345.6 million was wrongfully wasted on fraud.

The entities defrauding the government do so in a variety of ways: Medicare or Medicaid fraud whereby they bill the government for services which they never provided or overbill for services that were provided; SEC Trading; Tax Fraud; TARP Fraud; Military/Defense contract fraud; Pharmaceutical Manufacturing;contract fraud involving any number of large government spending programs; or other types public benefit fraud.

HELPING THE PUBLIC.

As a whistleblower attorney, we are interested in speaking with persons willing to make known the truth about company practices and are willing to file a qui tam or whistleblower action. One area in particular we are interested in discussing are lawsuits involving medical device companies where the company is alleged to have overcharged, engaged in kickback programs, and the like. We will nevertheless investigate claims in a variety of areas.

Workers and persons all across the country witness actions at their work that may be unlawful or even corrupt. Unfortunately, some employees and workers feel that they will be fired, terminated, harrassed or punished if they report an unlawful or corrupt action. These reporters, however, are protected by the law as a Whistleblower and can receive compensation because of the False Claims Act or the Medicaid False Claims Act. If you have reported actions that may be fraudulent, then you should talk to a Whistleblower or qui tam lawyer about your facts.

Whistleblowers help the government to get back billions of dollars each year with the help of the False Claims Act. In fact, fraudulent Medicaid claims are also caught by whistleblowers having the Medicaid False Claims Act on their side. If you report a false claim or fraudulent action to the government, then the government will give you, the whistleblower, a part of the money that gets recovered. This is because of qui tam requirements. Qui Tam means that a person files a lawsuit for the king and also for him or herself. The phrase is qui tam pro domino rege quam pro se ipso in hac parte sequitur, or, “he who sues for the king as well for himself.”

These requirements and lawsuits were made popular during the Civil War when many people were getting away with fraudulent actions against the government. In 1986, the False Claims Act was amended to raise the total compensation given to people who reported fraudulent actions, or whistleblowers. If a whistleblower works with a lawyer then it may be possible for them to get three times the amount the government would get in damages and also get additional compensation for general fines.

TYPES OF CASES

The most common situations that could form the basis of a Qui Tam action include:

• Submitting a false or fraudulent record, bill or statement to the government in order to fraudulently obtain money such as reporting a medical service that was never performed for Medicare or Medicad;
• Conspiring with a third party to submit or present have a false or fraudulent claim to the government;
• Withholding property of the government with the intent to defraud or conceal the property from the government;
• Fraudulently buying property of the government from someone not authorized to sell that property; and
• Making a false statement to fraudulently avoid paying money to the government or to avoid delivering property to the government.

FOR HELP, PLEASE CONTACT US.

We help whistleblowers on a contingency basis, meaning there is no fee charged for our work unless there is a recovery. We also front any and all expenses. No matter where you are located — we will represent you. We will come to you, you will not have to come to us.

Attorneys in our firm and attorneys that we work with on Whistleblower, Qui Tam, False Claims Act cases have represented a host of persons making claims, for violations of federal tax law, Medicare law and more.

For more information, please contact our team of whitsleblower and qui tam attorneys today.

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