Health Care Whistleblowers Account for 65% of False Claims Act Lawsuits

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Crop doctor with stethoscope in hospital, representing healthcare ads.

Whistleblowers provide most of the leads to the Justice Department concerning health care fraud every year. In FY 2014, 93 percent of the cases opened by the Civil Division were started by a qui tam complaint, according to the prepared remarks of Principal Deputy Assistant Attorney General Benjamin C. Mizer at the Pharmaceutical Compliance Congress and Best Practices Forum on October 22, 2015.

Mizer’s remarks provided a number of interesting statistics from the Justice Department and commentary on False Claims Act litigation. Among them was the fact that the Government has paid nearly $2.5 billion to whistleblowers in the last six years. And health care whistleblower cases account for the majority (65%) of False Claims Act lawsuits.

The remarks also provided insight into the Yates memo’s application to the False Claims Act. The Yates memo, for those who do not remember, concerned the Government’s pursuit of individuals responsible for corporate wrongdoing and a warning to companies that no cooperation credit would be offered if they did not identify the individuals responsible for breaking the law. Specific to the False Claims Act, companies are going to have to turn over all material facts about culpable individuals in order to received a reduction in the treble damages provision during settlement negotiations.

In terms of enforcement actions, the speech specifically identified the failure to provide accurate information to doctors and patients concerning clinical risks and benefits of products as an area of concern. Two examples of statements made in the sales & marketing of a product were provided. In both cases, the company failed to accurately disclose information which shed light on their claims which were not on or contradicted the FDA-approved label.

Mizer also commented on the increasing use of data by the government to identify trends and outliers in health care payment submissions and reimbursements. This information is expected to continue to influence future enforcement actions and help identify instances of fraud.

The speech also mentioned the increasing number of large, successful cases under the False Claims Act brought by whistleblowers and their attorneys even though the U.S. Government declined to intervene and proceed with the case. He highlighted in particular a $450 million settlement with a major dialysis providers and two settlements concerning underpaid rebates by pharmaceutical manufacturers. In cases where the DOJ declines to intervene, the law requires the government to pay an enhanced percentage of the recovery to the whistleblower – between 25% and 30% of the monetary recovery in the case.