False Claims Act – Qui Tam Cases – and How It May Impact Health Care Providers
Recently, a decision by a court in Florida has gained national attention as it is the first time that a court has found the federal False Claims Act’s qui tam clause to be unconstitutional. “Qui Tam” is originally a Latin term, which means “who as well,” dating back to 13th century English lawsuits where a person could sue on behalf of the King “as well” as for himself.
What is the False Claims Act (FCA)?
The False Claims Act (FCA) is a federal law, allowing private individuals known as “relators” to file suit against the United Sates, given that they have evidence of fraud. Relators were expected to present their suit first to the Government, who would then evaluate its merits. The Government then has the option to either intervene or permit the relator to proceed independently. If the relators succeed, they receive a share of the recovered damages, which often amounts to significant financial awards.
The qui tam provision is made unique by the fact that private citizens act as advocates on behalf of the United States Government, seeking to prove fraud and recover damages – without allocating its own resources to every case. The public individuals choose to take part as they get rewarded upon success.
The Florida Court Decision and Its Constitutional Implications
In the recent case United States ex rel. Zafirov v. Florid Medical Associates, LLC, Kathryn Kimball Mizelle (the district judge) stated that the qui tam relators under the FCA are acting as “officers of the United Sates,” which violates the Appointments Clause of the U.S. Constitution. According to the Appointments Clause, officers of the United States are to be appointed by the President, a court, or the head of a federal department – and since members of “qui tam” relators do not go under any such formal process, it was said to be unconstitutional. This causes significant challenges in the longstanding legal framework of the FCA and could possibly impact how future cases are dealt with since these rulings limit the power federal agencies have in enforcing laws, and if this reaches the supreme court, qui tam lawsuits might get restricted, permanently changing how fraud cases against the government are handled.
Currently, this ruling only applies to this specific case, however, it gives defense lawyers a brand-new argument to stand against qui tam lawsuits. Those who are facing fraud claims might use this decision to either get their cases dismissed or negotiate better settlements.
The Benefits and Challenges
FCA remains to be a powerful tool to address and combat against frauds, despite the constitutional concerns raised. The main challenge would be the budget, personnel, or the resources required to investigate and prosecute fraud cases independently, which many government agencies struggle with. The qui tam provision has been the solution to this and has been filling the gaps, benefiting many.
As the battle unfolds, professionals like healthcare providers, policymakers and legal professionals would need to closely monitor further development, as if the additional courts adopt the Florida ruling, it could bring significant changes to the landscape of fraud enforcement in the United States, especially in the health care sector.
For expert advice, contact Shayne Bevilacqua at Professional Liability Insurance Group.
Call or Text us at +1 (877) PLIG – 123, That’s (877) 754 – 4123.
