The Invalid Claim Act , also called " Lincoln Law ") is an American federal law that imposes liability on people and companies (usually federal contractors) who deceive government programs. This is the Federal Government's primary litigation tool in combating fraud against the Government. This law includes the provision of qui tam which allows persons not affiliated with government, called "relators" under the law, to file action on behalf of the government (informally called "whistleblowing" especially when relators employed by organizations accused in the lawsuit). People who submit themselves under the Act stand to accept a portion (usually about 15-25 percent) of any damage restoration. In 2012, more than 70 percent of all FCA Federal Government actions are initiated by the complainant. Claims under the law usually involve health care, military, or other government spending programs, and dominate the list of the largest pharmaceutical settlements. The government recovered $ 38.9 billion under the False Claim Act between 1987 and 2013 and this amount, $ 27.2 billion or 70% came from the case of qui tam brought by the relators.
Video False Claims Act
Histori
Qui tam The law has a history dating from the Middle Ages in England. In 1318, King Edward II offered a third of the penalty to the relator when the relator successfully sued a government official working as a wine merchant. The 1540 Maintenance and Consolidation Act of Henry VIII provided that a public informant may demand certain forms of disruption to the course of justice in the legal proceedings relating to land rights. This action is still valid today in the Republic of Ireland, although in 1967 it was put out in the UK. The idea of ​​a general informer bringing reparations to the Commonwealth was then taken to Massachusetts, where "a penalty for fraud in the sale of bread was to be distributed one-third to the inspectors who discovered the fraud and the rest for the benefit of the city where the offense took place." Other legislation can be found in Connecticut's colonial law books, New York, Virginia, and South Carolina.
The American Civil War (1861-1865) was marked by fraud at all levels, both in the northern Union and the southern Confederacy. During the war, unscrupulous contractors sold Elderly Federation horses and donkeys in sickness, wrong guns and ammunition, and disgusting quarters and provisions, among other immoral acts. In response, Congress passed the False Claim Act on March 2, 1863, 12 Stat. 696. For being ratified under the administration of President Abraham Lincoln, the False Claim Act is often referred to as the "Lincoln Law".
Importantly, a prize is offered in what is called the qui tam provision, which allows citizens to sue on behalf of the government and be paid a percentage of the recovery. Qui tam is a shortened form of the Latin legal phrase qui tam pro domino rege quam pro se ipso in hac parte sequitur ("he who brought the case on behalf of our lord the King, himself ") In action qui tam , the lawsuit filing a citizen is called" relator ". As an exception to the rule of law standing generally, the court has considered that the volunteers were "partially assigned" partly from government law injuries, thus allowing relators to proceed with their clothing.
US Senator Jacob M. Howard, who sponsored the legislation, confirmed the giving of the gift to the whistle blower, many of whom were involved in unethical activities themselves. He said, "I have based the [qui tam] provision on ancient ideas about resisting temptation, and" arranging mischief to catch the mischievous, "the safest and quickest way I have ever found bringing a rogue to court. "
In large-scale military spending ahead of and during World War II, the US Attorney General relied on criminal law provisions to deal with fraud, rather than using the FCA. As a result, lawyers will wait for the Department of Justice to file criminal cases and then promptly file a civil lawsuit under the FCA, a practice that was denounced as a "parasite" at the time. Congress decided to remove the FCA, but at the last minute decided to reduce the share earned from the results obtained.
The law was re-amended in 1986, again due to problems with military spending. Under the military buildup of President Ronald Reagan, reports of massive scams among military contractors have made headlines, and Congress acts to strengthen the FCA.
The law was always used primarily against defense contractors but in the late 1990s, health care scams began to receive more focus, accounting for about 40% of the recovery in 2008 Franklin v. Parke-Davis , filed in 1996, was the first case of applying the FCA against fraud committed against the government, due to bills filed for Medicaid/Medicare payments for care not paid by those programs because they were not FDA approved or not listed on a government formulary. The case of FCAs in the health care field is often associated with the marketing of illegal drugs by drug companies, which are illegal under different laws, the Federal Food, Drug and Cosmetics Act; intersections occur when unlabeled marketing leads to filled recipes and bills for prescriptions submitted to Medicare/Medicaid.
In 2012, more than 70 percent of all FCA federal actions are initiated by the complainant. The government recovered $ 38.9 billion under the False Claim Act between 1987 and 2013 and this amount, $ 27.2 billion or 70% is from the qui tam case brought by the relator. In 2014, whistleblower filed more than 700 lawsuits Claim Claims. In 2016, the Justice Department has the third highest annual recovery in the history of the False Claim Act, earning more than $ 4.7 billion in settlement and appraisal of civil cases involving fraud and false claims against the government. Since 2009 alone, the federal government has recovered $ 31.3 billion in settlement and assessment of the False Claim Law.
Maps False Claims Act
Terms
The law establishes liability when a person or entity improperly receives from or avoids payments to the Federal government (tax fraud is excluded). The law prohibits:
- Intentionally present, or cause a false claim to be made for payment or approval;
- Consciously create, use, or cause to be created or used, false recordings or statement material for false or fraudulent claims;
- Conspiring to commit a violation of the False Claim Act;
- misrepresents the type or amount of property to be used by the Government;
- Declare the receipt of a property on a document without actually knowing that the information is correct;
- Consciously purchases Government property from unlawful government officials, and;
- Consciously create, use, or cause to be created or use false records to avoid, or to reduce the obligation to pay or transfer property to the Government.
Certain claims can not be acted upon, including:
- specific actions against members of the armed forces, members of the United States Congress, members of the judiciary, or senior branch executive officers;
- claims, records or statements made under the 1986 Internal Revenue Code that would include tax fraud;
There is a unique procedural requirement in cases of the False Claim Law. As an example:
- a complaint under the False Claim Act must be filed with a stamp;
- complaints should be served by the government but should not be served by the defendant;
- The complaint should be sustained by a comprehensive memorandum, not filed with court, but presented to the government that lays out the factual foundations of the complaint.
In addition, the FCA contains anti-revenge provisions, which allow the relator to recover, in addition to his award for reporting fraud, double indemnity plus attorney's fees for retaliation for reporting fraud against the Government. This provision specifically provides the relator with personal claims for double damages for damages and remedies.
Under the False Claim Act, the Justice Department is authorized to pay rewards to those who report fraud against the federal government and is not punished for fraud-related crimes, in the amount of between 15 and 25 (but up to 30 percent in some cases) of what is recovered based on a whistleblower report. The relator section is determined based on the FCA itself, the legislative history, the Ministry of Justice guideline released in 1997, and the court decision.
1986 changed
(Amendment to the Wrong Claim Law (Pub.L. 99-562, 100Ã, Stat.Ã, 3153, adopted October 27, 1986)
- The removal of "government-owned information" prohibits lawsuits qui tam ;
- Establishment of the defendant's accountability for "deliberate ignorance" and "careless indifference" to the truth;
- Recovery of the "dominant standard of evidence" for all elements of the claim including damage;
- The imposition of a treble damage and civil fine of $ 5,000 to $ 10,000 per wrong claim;
- Increased rewards for plaintiffs between 15-30 percent of funds obtained from the defendant;
- The defendant's payment of the plaintiff's fees and attorney's fees are successful, and;
- Employment protection for the reporter includes recovery of seniority status, special damage, and double repayment.
2009 changed
On May 20, 2009, the Fraud Enforcement Act Act 2009 (FERA) was signed into law. This includes the most significant changes to the FCA since the change in 1986. FERA enacted the following changes:
- Extend the scope of potential FCA liability by eliminating the "presentation" requirement (effectively disregarding the Supreme Court's views on Allison Engine Co. v. (2008));
- Redefine "claims" under the FCA to mean "any request or request, whether by contract or for money or property and whether the United States has the right to money or property" which (1) is presented directly to the United States, or (2) "to contractors, grantees or other recipients, if money or property should be used or used on behalf of the Government or to promote the Government's program or interest" and the government grant or reimburse the cost of any part of the requested funds;
- Changed the terms of the FCA intent, and now only requires false statements as "material for" false claims;
- Extensible conspiracy obligations for any breach of FCA provisions;
- Changing the provision of "false false claims" to extend responsibility to "consciously and inadvertently avoid [ing] or decreas [ing] the obligation to pay or send money or property to the Government;"
- Enhanced protection for qui tam plaintiffs/relators outside employees, to include contractors and agents;
- Procedurally, the complaints of the government will now reconnect with the applicant for the plaintiff/relator;
- Provided that every time a state or local government is referred to as a joint plaintiff in an action, the government or the relator "shall not prevent [d]... from serving a complaint, any other defense or written disclosure of all material evidence" li>
- Increase the Attorney General's power to delegate authority to conduct Civil Investigation Claims prior to intervening in FCA actions.
With this revision, the FCA now prohibits consciously (changes in bold):
- Sending a payment or replacing a claim that is known to be false or deceptive.
- Create or use false records or statement material for false or fraudulent claims or 'obligations' to pay money to the government.
- Engage in a conspiracy to cheat with false claim submissions.
- To hide, avoid or down "liabilities" incorrectly to pay money to the government.
2010 changes under Patient Protection and Affordable Care Act
On March 23, 2010, the Patient Protection and Affordable Care Act (also referred to as healthcare reform bill or PPACA) was signed into law by President Barack Obama. The Affordable Care Act makes further amendments to the False Claim Act, including:
- Changes to the Public Disclosure Bar. Based on previous FCA versions, cases filed by private individuals or "relators" may be prohibited if it is determined that the case is based on the disclosure of public information arising from certain proceedings, such as civil, criminal or administrative proceedings, or news media reports. As a result, defendants often use public disclosure bars as a defense against claims and the plaintiff's reasons for the same dismissal. PPACA changed the FCA language to allow the federal government to have a final decision on whether the court could refuse the case based on public disclosure. The present language states that "the court will cancel an act unless it is opposed by the Government, if substantially the same allegations or alleged transactions in such actions or claims are disclosed to the public." View 31 U.S.C. 3730 (e) (4) (A).
- Original Source Requirement . A plaintiff can overcome the public disclosure bar described above if they qualify as "original source," a definition that has also been revised by PPACA. Previously, the original source had to have "direct and independent knowledge of the information on which the allegations were based." Under PPACA, the original source is now someone who has "independent knowledge and materially adds to allegations or openly disclosed transactions." See 31 U.S.C. 3730 (e) (4) (B).
- Payment Over Payment . FERA redefines "liabilities" under the FCA to include "any overdelivery retention." Accordingly, the language is subject to FCA liability to any provider receiving Medicare/Medicaid overpayments (not accidentally or not) and failing to return the money to the government. However, FERA also asks the question of what exactly is involved in "overpayment retention" - for example, how long the provider should return the money after finding an overpayment. PPACA clarified changes to FCA made by FERA. Under PPACA, payments under Medicare and Medicaid must be reported and refunded within 60 days of discovery, or the date on which the relevant hospital report is due. Failure to make timely reports and refund overpayments will cause the provider to be liable under the FCA.
- Statutory Anti-Kickback Obligations . Federal Anti-Kickback Statute, 42 U.S.C. 1320a-7b (b) (AK) is a criminal law that makes it inappropriate for anyone to request, receive, offer or pay any compensation (money or other) in return for referring patients to receive certain services paid by the government. Previously, many courts have interpreted the FCA which means that claims filed as a result of AKS violations are false claims and therefore incurring FCA liabilities (other than AKS penalties). However, although this is a "rule of majority" among the courts, there is always an opportunity for the courts to withhold the opposite. Importantly, PPACA changed the AKS language to provide that the claim submitted violates AKS automatically is a false claim for FCA purposes. Furthermore, the new language of AKS states that "a person does not need to have actual knowledge... or any intent to commit a violation" against the AKS. Thus, providers will not be able to successfully argue that they do not know they are in violation of the FCA because they are not aware of the existence of the AKS.
Practical application of law
The False Claim Act has a detailed process for filing claims under the Act. Are complaints to government agencies insufficient to bring claims under the Act. Complaints (lawsuits) should be filed in US District Court (federal court) in camera (under seal). After an investigation by the Justice Department within 60 days, or often several months after the extension is granted, the Justice Department decides whether to continue the case.
If the case is pursued, the prize amount is less than if the Department of Justice decides not to continue the case and the plaintiff/relator proceeds the suit itself. However, his success rate was higher in cases that the Justice Department decided to pursue.
Technically, the government has several options in handing over cases. These include:
- intervene in one or more of the pending qui tam actions. This Intervention reveals the Government's intention to participate as a plaintiff in demanding that the number of complaints. Less than 25% of qui tam actions result in intervention on every count by the Department of Justice.
- refuses to intervene in one or all pending qui tam pending actions. If the United States refuses to intervene, the relator may prosecute action on behalf of the United States, but the United States is not a party to a separate process of its right to remedy. This option is often used by their relators and lawyers.
- moves to ignore relator complaints, either because there are no cases, or the case is in conflict with significant legal or policy interests of the United States.
In practice, there are two other options for the Department of Justice:
- complete the delayed qui tam action with the defendant before the intervention decision. This usually, but not always, resulted in simultaneous intervention and settlement with the Department of Justice (and included in the 25% intervention rate).
- notifies the relator that the Justice Department intends to refuse intervention. This usually, but not always, resulted in the dismissal of qui tam actions, according to the US Attorney's Office in Eastern District of Pennsylvania.
There are law cases in which claims can be prejudiced if disclosure of alleged unlawful acts has been reported in the media, if a complaint is filed with an agent instead of filing a lawsuit, or if the person making the claim under the law is not the first person to do so. Each state in the US has different whistleblowing laws involving state governments.
Federal income tax on awards under FCA in the United States
U.S. Internal Revenue Service (IRS) takes the position that, for Federal income tax purposes, the payment of qui tam to the relay under the FCA is the ordinary income and not the capital gain. The position of the IRS was challenged by a relator in the case of Alderson v. United States and, in 2012, the US Court of Appeals for the Ninth Circuit reinforced the attitude of the IRS. In 2013, this remains the only circuit court decision on the tax treatment of these payments.
Relevant decisions by the United States Supreme Court
In the case of 2000, Natural Resources Agency Vermont vs. United States ex rel. Stevens, 529 U.S. 765 (2000), the United States Supreme Court declares that a private individual may not file a lawsuit in federal court on behalf of the United States against a State (or state body) under the FCA. At Stevens, the Supreme Court also supports a partial "partial assignment" approach to qui tam a standing relative for demands previously articulated by the Federal Ninth Circuit Appeal Court and is an exception to the rule general law to stand.
In the 2007 case, Rockwell International Corp v. United States of America , the United States Supreme Court considered several issues related to "original source" exclusions on the FCA public disclosure bar. The Court provides that (1) the original source requirements of the FCA provisions for the exclusion of indigenous sources on the public disclosure bar in the jurisdiction of federal courts are jurisdictions; (2) the official sentence "information on which the allegation" refers to relator accusations and not openly expressed charges; the term "conjecture" is not limited to the charge in the original complaint, but includes, at a minimum, the allegation in the original complaint as amended; (3) the knowledge of the relator in connection with pondcrete falling short of direct and independent knowledge of the information underlying the allegation is required for him to qualify as an original source; and (4) government intervention does not provide an independent basis of jurisdiction with respect to the relator.
In the 2008 case, Allison Engine Co. v. United States ex rel. Sanders, the US Supreme Court considers whether false claims should be filed directly with the Federal government, or whether it should only be paid with government money, such as a false claim by a subcontractor to a major contractor. The court found that such claims need not be presented directly to the government, but false statements must be made with the intention that it will be relied on by the government in paying, or approving payments, claims. The Fraud Enforcement and Recovery Act of 2009 reverses the Court's decision and makes the type of fraud that the Fraudulent Claim Act applies more explicitly.
In the case of 2009, United States ex rail. Eisenstein v. New York City, the United States Supreme Court considers whether, when the government refuses to intervene or actively participates in the qui tam action under the False Claim Act, United States is a "party" for the suit for the purposes of Federal Rules of Appeals Procedure 4 (a) (1) (A) (which requires that an appeal notice in federal civil action is generally filed within 30 days of the entry of an assessment or order from which the appeal is taken). The Court stated that when the United States has refused to intervene in a privately-initiated FCA act, it is not a "party" for FRAP 4 purposes, and therefore, an applicant's petition filed after 30 days is time too soon.
In the case of 2016, Universal Health Services, Inc. v. United States ex rel. Escobar , the United States Supreme Court seeks to clarify materiality standards under the FCA. The Court unanimously reinforces the theory of certification implied FCA responsibility and reinforces the FCA's materiality requirements.
Country False Claim Act and application in other jurisdictions
In 2014, thirty states and the District of Columbia have also filed fraudulent claims laws to protect their publicly funded programs from fraud by including the provisions of the qui tam, enabling them to earn money at the state level. Some of these laws state that the Fraudulent Claim Act provides the same protection as federal law, while others limit recovery to fraudulent claims related to the Medicaid program.
The California False Claim Act came into effect in 1987, but was relatively inactive until the early 1990s, when public entities, frustrated by what they saw as a barrage of unjust and dishonest claims, began using the False Claim Act as defensive action.
In Australia, there have been calls since 2011 for laws that cite the False Claim Law and for its application to the tobacco industry and the carbon pricing scheme.
In October 2013, the British Government announced that it was considering a case to provide financial incentives to individuals reporting fraud in the case of economic crimes by private sector organizations, in an approach similar to the US False Claim Act. The 'Serious and Organized Crime Strategy' paper published by the UK Secretary of State for the Department of Home Affairs establishes how the government plans to take action to prevent serious and organized crime and strengthen its protection against and response to it. The paper asserts that serious and organized crime weighs more than  £ 24 billion per year on the UK. In the context of anti-corruption, this paper acknowledges that there is a need to target not only serious and organized criminals but also support those who seek to help identify and disrupt serious and organized crime. Three British agencies, Department of Business, Innovation & amp; Skills, Department of Justice and Headquarters have been tasked to consider the case for the US False False Claim Act in the UK.
Rule 9 (b) split circuit
Subject to Rule 9 (b) of the Federal Rules of Civil Procedure, fraudulent or error allegations must be requested with specificity. All appeals courts to address the issue of whether Rule 9 (b) of the applicable standard applies to the qui tam action held that the high standards apply. The Fifth Circuit, the Sixth Circuit, the Seventh Circuit, the Eighth Circuit, the Tenth Circuit, and the Eleventh Circuit have all found that plaintiffs have to accuse certain false claims.
In 2010, First Circuit decisions in the US. ex rails. Duxbury v. Ortho Biotech Prods., L.P. (2009) and the decision of the Eleventh Circuit in US. ex rails. Hopper v. Solvay Pharms., Inc. (2009) both appealed to the US Supreme Court. The court dismissed certiorari for both cases, however, refused to settle a different appeals court decision.
ACLU et al. v. Holder
In 2009, the American Civil Liberties Union (ACLU), the Government Accountability Project (GAP) and OMB Watch filed a lawsuit against the Justice Department challenging the "FCA stipulation" constitutionality of the FCA which requires reporters and courts to keep lawsuits. secret for at least 60 days. The plaintiffs argue that these conditions violate the First Amendment right of the public and the complainant, and that they violate the distribution of powers, since the court is not free to release the documents until the executive branch acts. The government moved for dismissal, and the district court granted it in 2009. The plaintiffs appealed, and in 2011 their appeal was denied.
Example
In 2010, a subsidiary of Johnson & amp; Johnson agreed to pay more than $ 81 million in civil and criminal penalties to resolve the allegations in the FCA lawsuit filed by two whistleblowers. The lawsuit alleges that Ortho-McNeil-Janssen Pharmaceuticals, Inc. (OMJPI) is acting inappropriately with the marketing, promotion and sale of anti-seizure medicines, Topamax. In particular, the lawsuit alleges that OMJPI "illegally markets Topamax by, inter alia, promoting the sale and use of Topamax for a variety of psychiatric conditions other than those whose use has been approved by the Food and Drug Administration (ie," off-label "uses). " It also states that "some of these uses are not medically accepted as an indication of where the Medicaid State program provides coverage" and that as a result "OMJPI consciously causes false or fraudulent claims for Topamax to be submitted to, or causes purchase by, federally funded certain health care programs.
In response to complaints from rapporteur Jerry H. Brown II, the US Government filed a lawsuit against Maersk for overcharging for shipments to US troops fighting in Iraq and Afghanistan. In the settlement announced on 3 January 2012, the company agreed to pay a fine and interest of $ 31.9 million, but did not recognize the error. Brown is entitled to $ 3.6 million from the settlement.
In 2014, CareFusion paid $ 40.1 million to resolve allegations of violating the False Claim Act by promoting the use of its product label in the case of the United States ex rail. Kirk v. CareFusion et al., No. 10-2492. The government alleges that CareFusion is promoting the sale of ChloraPrep drugs for use that are not approved by the FDA. ChloraPrep is a commercial name in which CareFusion produces chlorhexidine medicine, which is used to cleanse the skin prior to surgery. In 2017, the case was questioned and is being reviewed by the DOJ because the main lawyer for the DOJ serving as Assistant Attorney General in this case, Jeffery Wertkin, was arrested by the FBI on January 31, 2017 for allegedly trying to sell a copy of a complaint in a secret disclosure lawsuit that was under seal.
See also
- Fr. John Corapi
- Made an incorrect statement
- Medicare Scams
- The private Attorney General
- War rifle
References
External links
- An Overview of the Fraudulent Claim Act
- Blog that includes developments in the Fraudulent Claim Act
- Ministry of Justice Presentation at the University of Washington Overbilling Case from UW public website (pdf)
- Taxpayers Against the Fraud Education Fund
- What is the False Claim Act?
- masslawyersweekly.com
Source of the article : Wikipedia
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