False Claims Act

The False Claims Act (FCA), also known as the “Lincoln Law” is a law that originally came from the Civil War. Many suppliers to the Union would give faulty horses and guns, which caused significant harm to the army. Recognizing the rampant fraud committed against the government, Congress passed the False Claims Act so that people who commit fraud against the government were found and held accountable. An important part of this act is the “qui tam” provision, which allows private citizens to act as whistleblowers by bringing fraud cases to the government. If their case turns out successful, they can receive 15% – 30% of the money recovered by the government from the fraud. According to a nonprofit group called Taxpayers Against Fraud, federal and state governments have recovered over $55 billion dollars as a result of qui tam lawsuits. While in the past this was mainly done for military fraud, cases involving the FCA have expanded to include hospital fraud, which makes up a large portion of recoveries. A lot of times the FCA is used when a hospital bills the government a higher amount than necessary, or bills them for services that were not used for a patient, or double billing, where the hospital bills different government programs for the same procedures. Another way the FCA could be applied to hospitals is when they violate Stark Law, where a physician refers a Medicaid or Medicare patient to another health care provider. Penalties are usually around $13,000 to $27,000, but some physicians have even gone to prison for violating the FCA. Overall, the FCA serves as a vital and powerful tool to prevent fraud against the government, through public incentives and associated laws, like Stark Law and AKS.


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