These lawsuits have a funny name (Qui Tam) but if you are a defendant targeted in a qui tam lawsuit, the situation is anything but funny. They can pose a significant threat to your business, your medical practice, or your pharmacy, unless they are aggressively defended against.
What is a “Qui Tam” Lawsuit?
“Qui tam” is a short Latin phrase that refers to a particular type of lawsuit that originated many hundreds of years ago in England, in which a private individual was allowed to sue an alleged wrongdoer on behalf of both the citizen himself and the king. In the U.S., a number of federal laws incorporate qui tam provisions most notably the False Claims Act (FCA). Under the FCA qui tam provisions, individuals, sometimes referred to as “whistleblowers” may maintain lawsuits on behalf of themselves and the government against defense contractors, healthcare providers, pharmacies, and other healthcare firms whom the qui tam plaintiffs, also referred to as “relators,” suspect have committed fraud.
Bees to Honey: Whistleblowers Are Allowed a Share of Federal Government’s Recovery
Whistleblowers have a strong financial incentive to file qui tam lawsuits. Under the False Claims Act, they can collect a portion (usually between 15-25 percent) of any recovered damages. In recent years, settlements in some qui tam suits have been in the millions of dollars. Accordingly, an aggressive, resourceful group of attorneys has begun to represent qui tam whistleblowers. As one would imagine, some defense contractors and healthcare professionals contend that all too many realtors are filing suits where the evidence of fraud is weak, since the financial incentives are just too strong.
Typical Types of Qui Tam Lawsuits
Since qui tam provisions are included in a number of different federal laws, the list of possible qui tam lawsuits is broad, but some of the more common types include:
- Product Substitution
- Cross Charging
- Improper Cost Allocation
- Lack of Medical Necessity
- Fraudulent Cost Reports
- Kickbacks/Physician Inducements
- “Upcoding” diagnoses or procedures
Criminal Investigation Sometimes Follows Qui Tam Action
As if the civil lawsuit itself wasn’t sufficiently serious, there is an additional problem with qui tam lawsuits: In some cases, the U.S. Attorney General may decide to open a criminal investigation based on the qui tam allegations. If that happens, the civil qui tam case is stayed or suspended until the completion of the criminal investigation. The qui tam defendant, however, can find that he or she is fighting a two-front war.
Following a determination by the Chief of the Criminal Division in the U.S. Department of Justice, federal criminal prosecutors now get early access to all qui tam claims filed under the FCA, to determine whether or not a criminal investigation is warranted. Particular focus is on the healthcare industry.
Qui Tam Defendants Have Some Weapons of Their Own
Defendants? quivers contain some arrows. For example, 3730(d)(4) of the FCA allows “prevailing defendants” to recoup their attorney’s fees where the claim was (clearly frivolous, clearly vexatious, or brought primarily for purposes of harassment.) The burden is on the defendant, of course, to show that the case filed against it was frivolous. A defendant needs skilled legal counsel to establish the frivolous and vexatious nature of a qui tam claim.
Are You or Your Business the Target of a Qui Tam Lawsuit or Investigation?
If you are being investigated for an FCA violation, are the defendant in a qui tam lawsuit, or have been targeted in a criminal investigation, you need to secure the most experienced, competent, and aggressive legal counsel possible. At Oberheiden, P.C., we have extensive experience and provide aggressive representation for our clients. Our legal team is prepared to do whatever it takes to help you win. If you choose to work with us, we will use our decades of experience including time spent as federal prosecutors to help protect your vital interests. To start building your qui tam or fraud defense, call 866-603-4540 or contact us online now.
Dr. Nick Oberheiden is a national litigation and trial criminal defense attorney who practices exclusively in the area of federal law.