Articles Posted in Qui Tam Lawsuits

Published on:

Athenahealth allegedly violated the Anti-Kickback Statute (AKS) and False Claims Act by paying kickbacks for clients referrals.

Electronic Health Records -- Reading patient report on digital tablet

Healthcare technology firm Athenahealth has agreed to pay $18.25 million to settle allegations it violated the False Claims Act by paying illegal kickbacks for client referrals as part of initiatives to promote its Electronic Health Records platform athenaClinicals. Two qui tam relators whose whistleblower complaints exposed the fraud stand to receive significant whistleblower rewards.

Three illegal “marketing” initiatives

Published on:

Service member wearing Army uniform (ACU) filling real estate related paperwork.Court takes “holistic approach” to materiality, rejecting strict focus on the ultimate “payment decision” in significant win for qui tam whistleblowers and the government.

A few weeks ago, I blogged about United States v. Strock. There, the Second Circuit Court of Appeals determined that the Supreme Court’s decision in Universal Health Services v. Escobarwhich held that misrepresentations regarding compliance with a statutory, regulatory, or contractual requirements “must be material to the Government’s payment decision” to be actionable under the False Claims Act—did not invalidate the “fraudulent inducement” theory of False Claims Act liability. Under that theory, which predates Escobar, a violation of the False Claims Act can be established by showing that the defendant submitted claims for payment under a contract obtained by fraud—even if the subsequent claims for payment under the contract were themselves entirely truthful. The focus in a such a case, the Second Circuit confirmed, still includes the fraudulent statements’ impact on the government’s initial decision to award the contract. Any subsequent payments are “tainted” by that original fraud.

Now—in another key victory for whistleblowers and the government—the Eleventh Circuit has taken a similarly broad view of Escobar’s materiality requirement. In United States ex rel. Bibby v. Mortg. Inv’rs Corp., the court adopted a “holistic approach” to the assessment of materiality under the False Claims Act, rejecting a “strict focus” on the ultimate “payment decision.”

Published on:

Second Circuit rules that relevant government “payment decision” under Escobar included Veterans Administration’s initial decision to award contracts based on claim that contractor qualified as aservice-disabled, veteran-owned small business”—not just the VA’s subsequent decisions to make payments under those contracts.

In a key victory for the federal government and qui tam whistleblowers, the Second Circwhistlebloweruit Court of Appeals has affirmed that false statements regarding eligibility to take part in government programs—and not just subsequent false claims for payment after being allowed to participate—are actionable under the False Claims Act notwithstanding the U.S. Supreme Court’s 2016 landmark decision in Universal Health Services v. Escobar. The court in United States v. Strock rejected the idea that the only relevant “payment decision” under Escobar was the decision to pay a contractors’ invoices without regard to the initial decision to award the contract.

Impact on False Claims Act cases involving eligibility

Published on:

Insurance fraud (arson)Court holds that whistleblower standing under the Insurance Claims Fraud Prevention Act—like the federal False Claims Act—does not require that the qui tam relator suffered injury.

The Supreme Court of Illinois has upheld the qui tam whistleblower provisions of the Illinois Insurance Claims Fraud Prevention Act, affirming the reversal of a trial court decision that would have essentially gutted them. The court agreed that a whistleblower need not have suffered harm to be an “interested person” with standing—and therefore able to sue—under the Act. Instead, the phrase “interested person” in the statute simply refers to a party with material information about insurance fraud who brings a qui tam lawsuit and may be eligible for a whistleblower award, the court held in State ex rel. Leibowitz v. Family Vision Care, LLC.

Rooting out insurance fraud