The attorneys at The Criminal Defense Firm represent businesses in qui tam litigation nationwide. Here, you will find information on qui tam defense strategies and steps you can take to help protect your company.
Qui tam litigation is not like any other type of lawsuit that most businesses face on a day-to-day basis. With no more than a simple allegation, a competitor, disgruntled former employee, or other business or individual can thrust your company into the federal government’s crosshairs, exposing it to a drawn-out legal process and the potential for substantial financial liability.
At The Criminal Defense Firm, we provide vigorous representation for healthcare providers, defense contractors, and other companies that have federal government contracts and claim reimbursements under federal government benefit programs (such as Medicare and Tricare). We know what a qui tam lawsuit can mean for your company, and we can use decades of experience to fight the allegations against it. One of the keys to a successful qui tam defense is to intervene early, so we encourage you to review the information below and then contact us immediately to schedule a free case evaluation with our defense team.
What is a Qui Tam Lawsuit?
Someone Has Accused Your Company of Federal Fraud
If your company is facing a “qui tam” lawsuit, this means that someone has accused your company of defrauding the federal government. This could mean anything from allegedly substituting inferior products or cross-charging under a government contract to billing Medicare, Medicaid, or Tricare for non-reimbursable services, medical equipment, or medications. Whatever the specific allegations maybe, a private citizen (referred to in the lawsuit as the “relator”) has initiated a lawsuit against your company on behalf of the government, and now attorneys at the Department of Justice (DOJ) are going to review the case and decide whether the government should intervene.
Why would someone choose to sue your company on behalf of the government? The False Claims Act’s qui tam provisions were originally enacted so that taxpayers could help protect the federal government against wasteful spending. Unfortunately, since it is so easy to initiate a qui tam lawsuit and since relators can collect up to 30 percent of any amounts recovered by or on behalf of the government many so-called “whistleblowers” have much less altruistic intentions.
Resources to Prepare for Your Qui Tam Defense
To learn more about preparing your company for its qui tam defense, we encourage you to review our firm’s resources on the False Claims Act and qui tam litigation:
- About: Government Contract Fraud
- About: Medicare Fraud
- About: Tricare Fraud
- Qui Tam Lawsuits Target Physicians, Pharmacies and Government Contractors
- The Perfect Storm: Disgruntled Former Employee Combined with the False Claims Act
- Inspector General is Actively Pursuing Physicians for Anti-Kickback Statute Violations
Potential Defenses in Qui Tam Litigation
When it comes to defending against a qui tam lawsuit, most companies will have a variety of potential defenses available. These can range from technical, procedural arguments (i.e., the relator failed to meet the necessary requirements to initiate a qui tam lawsuit) to substantive defenses (i.e., your company did not defraud the federal government). Knowing which defenses (i) are available, and (ii) should be pursued requires a thorough evaluation of the relator’s complaint, a careful assessment of the current status of the litigation, and intimate familiarity with the False Claims Act and cases involving allegations of federal fraud.
- The relator failed to follow the Rules. While it only takes a simple allegation to initiate a qui tam lawsuit, there are certain rules (called the Federal Rules of Civil Procedure) with which the relator must comply. If the relator failed to follow the rules by, for example, failing to properly serve the complaint or plead subject matter jurisdiction, this can often be grounds to argue that the complaint should be dismissed.
- No disclosure statement. When a relator files a qui tam complaint, he or she must also file a written disclosure of substantially all material evidence and information [he or she] possesses. If the relator fails to prove this mandatory disclosure statement, the complaint should be dismissed.
- Inadequate allegations of fraud. Submitting an improper claim for payment or reimbursement does not automatically establish a violation of the False Claims Act. A certain level of “intent” is required. In order to validly assert a qui tam cause of action, the relator must allege that your company has done more than simply make an administrative mistake.
These are just a few examples of the numerous potential defenses that your company may have available. When we take your case, we will work quickly to develop a comprehensive defense strategy designed to:
- Avoid criminal charges. In some cases, allegations of False Claims Act violations can lead to criminal charges. We want to make sure your case stays civil so that jail time stays off of the table.
- Avoid government intervention. If we can convince the government not to intervene, this is an important step toward avoiding liability.
- Mitigate liability as much as possible. Our first goal is always to use the available defenses to help our clients avoid liability entirely. But, if some liability is inevitable, we will strategize, negotiate, and fight to limit your company’s liability as much as possible.
Steps to Take When Facing a Qui Tam Lawsuit
When facing a qui tam lawsuit, there are several steps you (and your attorneys) need to take as soon as you find out that your company is a party to the litigation. These include, but are not limited to:
1. Be Proactive.
As the defendant in a qui tam lawsuit, you need to take the reins. This means being proactive about your defense. If you are always waiting for the relator and the government to make the next move, you are putting yourself at a disadvantage. Building an effective qui tam defense strategy requires making decisions about what to do next before the relator or the government makes the decision for you.
2. Get Prepared.
Qui tam lawsuits take time, focus, and resources. Most relators (i.e., competitors and former employees) know this, and this is the reason why many qui tam lawsuits get filed. But, now that you are in litigation, you need to be prepared to do what is necessary to protect your company.
3. Avoid Discussing the Litigation.
At this stage, you should avoid discussing the litigation with anyone other than a member of your legal defense team. You do not want to say anything or inadvertently disclose any information that could hinder your defense, and you should let your attorneys communicate with the relator’s lawyer and the attorneys at the DOJ on your behalf.
4. Avoid Costly Mistakes.
When facing allegations under the False Claims Act, many people, unfortunately, make bad decisions. These include decisions to do things like destroy records or wait until the last minute to hire defense counsel. There are several reasons why both of these are bad ideas, and now is not the time to make hasty decisions or get complacent about protecting your company.
5. Understand What is At Risk.
In a civil False Claims Act case, the potential penalties include treble damages (three times the government’s actual losses) and fines of up to $11,000 per false claim. Qui tam lawsuits often involve millions (if not tens or hundreds of millions) of dollars in potential exposure, and you need to do everything possible to support your defense.
6. Retain Experienced Qui Tam Defense Counsel.
Of course, the most important thing you can do is to hire experienced defense counsel. You need a lawyer or, preferably, a team of lawyers who not only know the False Claims Act but who are also familiar with your business and industry. Now is not the time to spend days educating your attorney about the government contracting process or the Medicare billing system. You need a team that can hit the ground running immediately.
About The Criminal Defense Firm’s “Emergency Defense Package”
At The Criminal Defense Firm, a key component of our defense strategy in False Claims Act cases is to deploy what we call our “Emergency Defense Package.” The Emergency Defense Package provides an immediate action plan for company executives and in-house counsel to follow to avoid common mistakes and begin collecting the information that will be needed for your company’s defense. The Emergency Defense Package includes:
- General Protocols: What to Do
- Instructions for Management: How to Deal with Agents
- Instructions for Management: How to Deal with Employees
- Instructions for Employees
- Document Retention Forms
- Compliance Examination Instructions
- Important Contact Information
Schedule Your Free Case Evaluation Now
The Criminal Defense Firm’s nationally recognized defense attorneys and former federal prosecutors bring decades of experience to representing healthcare providers and government contractors in qui tam litigation nationwide. If your company has been sued, call (888) 356-4634 or submit our online case evaluation form to schedule a free, confidential consultation with our defense team today.
Dr. Nick Oberheiden is a national litigation and trial criminal defense attorney who practices exclusively in the area of federal law.