This column is written and sponsored by Alan Lescht & Associates, PC, an employment litigation firm in Washington, DC, that handles cases involving contract disputes, wage and hour issues, discrimination and retaliation, wrongful termination, whistleblower retaliation and security clearances.
That’s right. The federal government rewards individuals who properly report companies that overcharge or otherwise defraud the government. Last year, the federal government paid out more than $519 million to people who came forward with information that led to the discovery of fraud against the government. These individuals filed lawsuits under the False Claims Act (FCA), which prohibits companies, people, and even local and state governments from submitting false claims for payment to the federal government.
What is a false claim?
Under the FCA, it is illegal to submit a claim for payment to the federal government that you know or should know is false. Some claims are expressly false, like when a doctor bills Medicare for services the doctor did not provide.
Other claims are impliedly false. In a recent case, a company had a contract with the government to provide armed guards. The contractor hired guards that did not meet the shooting accuracy requirements in the contract. Although no one explicitly told the government the guards actually met the contract requirements, the contractor knew the guards were unqualified but billed the government anyway.
FCA violations can occur in any industry that is connected to federal funding. Here are some real-life examples:
- Medicare/Medicaid: IPC Healthcare, Inc., recently paid more than $60 million in settlement after billing Medicare and Medicaid for more expensive services than it provided (commonly known as “up-coding).”
- Defense contractors: A court ordered a defense contractor to pay $24 million for engaging in a bid-rigging conspiracy to inflate prices the contractor charged to ship goods for military families.
