What does Qui Tam mean?
Qui tam is shorthand for the Latin phrase, qui tam pro domino quam pro se ipso in hac parte sequit, meaning “He who pursues this action on our Lord the King’s behalf as well as his own.”Qui tam statutes date back to the 13th century England. The actions were a means of enabling private parties to allege the King’s interest and therefore gain access to the Royal Courts.
Today in the United States, a qui tam lawsuit is one brought under the False Claims Act by a private plaintiff on behalf of the federal government. These actions are sometimes referred to as whistleblower lawsuits and the False Claims Act is sometimes referred to as the whistleblower law. Both terms are too broad, as there are multiple whistleblower laws, of which the False Claims Act is only one. Click here for more in-depth information about the history of qui tam.
What is a "Relator"?
The person (plaintiff) who brings an action under the False Claims Act is known as a “relator.” That is, a relator is a qui tam plaintiff in a whistleblower lawsuit brought under the False Claims Act on behalf of the federal government.
When was the False Claims Act Created?
The False Claims Act was originally enacted by the United States Congress in 1863, as a response to widespread abuses by government contractors against the Union Army during the Civil War. The Act was modified in 1943 by setting up certain restrictions on relators. Such restrictions in the 1943 amendments, and subsequent unfavorable case law, led to the decreased use of the qui tam provisions because the incentives for honest citizens and their attorneys to step forward and provide resources were lacking.
However, as more and more fraud went undetected and unaddressed (especially in the defense industry), the public and Congress became outraged. In 1986, the law was then amended to strengthen the incentives for citizens to expose fraud as qui tam relators. The amendment worked – since the revitalization in 1986, the number of qui tam lawsuits filed has greatly increased each year, and more and more attorneys have become familiar with the law. The False Claims Act and its qui tam provisions including whistleblower protection have been so successful, that the defense, hospital and other industries have periodically been behind substantial efforts to legislatively weaken the False Claims Act and its qui tam provisions.
How much money has been returned to the United States Treasury as a result of Qui Tam lawsuits?
According to the most recent United States Department of Justice Report, since the 1986 amendments to the False Claims Act, qui tam whistleblower lawsuits have returned over $35 billion to the US Treasury, with over $3.8 billion of which has been received by relators aswhistleblower rewards.
What types of acts are covered by the False Claims Act?
Legal violations under the False Claims Act are:
- Knowingly submitting (or causing the submission of) false or fraudulent claims for payment.
- Knowingly making (or causing to be made) a false record or statement to get a false or fraudulent claim paid or approved.
- Knowingly making (or causing to be made) a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit property;
- Conspiring to defraud the Government by getting a false or fraudulent claim allowed or paid.
In general, the False Claims Act covers fraud involving federally funded contracts or programs, such as Medicare and Medicaid. The healthcare and defense industries have traditionally been the top two areas under the False Claims Act.
The False Claims Act is intended to reach all fraudulent activity resulting in government money damages. A false claim may take many forms, the most common being a claim for goods or services not provided, or knowingly provided in violation of contract terms, specification, statute, or regulation. Each and every claim submitted under a contract or other agreement which was originally obtained by means of false statements, falsities, or in knowing violation of any statute or applicable regulation, constitutes a false claim.
What is the liability for violating the False Claims Act?
The Defendant is potentially liable for three times the amount of damages which the federal government sustains because of the fraud/false claims. For instance, if unwarranted claims are in the amount of $1 million, the Defendant is liable for $3 million, plus civil penalties for each false claim (invoice, demand, document for payment, etc.) of between $5,500 and $11,000 for each claim. Each separate bill, voucher, or other false payment demand constitutes a separate claim for which a civil penalty may be imposed.
Healthcare fraud cases they can take many forms, including but not limited to CMS Form 1500, Form UB-92, Medicare Enrollment Forms, Cost Report Forms, New Drug and Abbreviated New Drug Applications, and pharmaceutical pricing reports (such as the Medicaid Rebate Quarterly Reports, ASP Data Form), etc. Almost all healthcare providers that enter into a settlement agreement with the United States and the Relator also enter into a Corporate Integrity Agreement.
How and when can a Relator be rewarded for filing a Whistleblower Lawsuit under the False Claims Act?
First, in order to be eligible to recover compensation under the False Claims Act, a person must file a whistleblower qui tam lawsuit. Simply informing the Government about false claims is not enough.
Second, a relator may receive compensation only if, and after, the Government, as a result of thequi tam lawsuit, recovers money from the defendant – just the act of filing the lawsuit is not enough.
In short, it is only the filing of a whistleblower qui tam lawsuit and a subsequent settlement or favorable verdict resulting in a recovery, that enables a private party to receive a reward under the False Claims Act.
How much money can a Relator receive for bringing a Whistleblower Qui Tam Action Lawsuit?
Whistleblower rewards are between 15 and 30 percent of the total recovery from the Defendant, whether through a favorable verdict or settlement.
If the federal government intervenes and joins a lawsuit brought by a relator, the relator generally is eligible to receive at least 15 percent, and up to 25 percent of the recovery, depending on the relator’s contribution to the prosecution of the lawsuit.
If the federal government chooses not to intervene and the relator proceeds with the lawsuit on his own, the relator can receive between 25 and 30 percent of the recovery.
From 1986 through September 2012, the total amount of whistleblower rewards paid to relators was approximately $3.8 billion.
Can there be more than one Relator in a particular Whistleblower Qui Tam Lawsuit?
Yes, more than one person or entity can join together and file a qui tam lawsuit.
Is there a deadline for filing a Whistleblower Qui Tam Lawsuit?
Yes, under the False Claims Act, a lawsuit must be filed within the later of the following two time periods:
- Six years from the date of the violations;
- Three years after the federal government knows or should have known about the violation, but in no event longer than 10 years after the violation of the Act.
What if someone else has already filed a False Claims Act Lawsuit against the same company that I want to file against?
If the federal government or another private person has already filed a False Claims Act lawsuit based on the same allegations as you are aware of, your lawsuit will be subject to dismissal. This provision in the law is sometimes referred to as the “first-to-file” bar. It is therefore important to file a qui tam lawsuit, in most circumstances, as soon as possible.
Have I lost my right to bring a Whistleblower Qui Tam Lawsuit if I have already informed the Government about the fraud?
No. You do not give up your right to bring a qui tam action by informing the Government before filing your qui tam lawsuit.
Can I keep my identity a secret if I file a Whistleblower Qui Tam Lawsuit?
Under the False Claim Act, the concept of whistleblower protection is separate and distinct from your identity. Your identity is initially kept a secret to all but the Court and the federal government, while the case is “under seal.” In other words, during the initial seal period, the lawsuit is filed and sealed, and neither the Defendant nor anyone else is made aware that you have filed the lawsuit. At some point, usually years later, after the federal government investigation has completed or the judge will no longer give the federal government extensions of time regarding the seal, the lawsuit will be made public. Your name will be open to disclosure to the Defendant and the public at the point at which the lawsuit is unsealed. There are very limited exceptions to this rule.
Do I have any protection against my employer firing or otherwise discriminating against me for filing a Whistleblower Lawsuit under the False Claims Act?
Yes – but it is an after-the-fact remedy, and provides no absolute “protection” while you are employed. The False Claims Act contains a section which has become commonly known as the “whistleblower protection” provision. Section 3730(h) of the Act provides that “Any employee, contractor, or agent shall be entitled to all relief necessary to make that employee, contractor, or agent whole, if that employee, contractor, or agent is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment because of lawful acts done by the employee, contractor, agent or associated others in furtherance of an action under this section or other efforts to stop 1 or more violations of [the False Claims Act],” is entitled to special protection. The protection afforded to qui tam whistleblowers includes reinstatement with the same seniority status such employee would have had, but for the discrimination, two times the amount of back pay, interest on the back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorney’s fees. A civil action under this subsection may not be brought more than 3 years after the date when the retaliation occurred.