Typically, whistleblowers report misconduct in the workplace to their employers or to a governmental agency. Whistleblowers often risk retaliation and damage to their careers in the form of discrimination for blowing the whistle on wrongdoing. There are many different kinds of whistleblowers. And, there are a number of specific Texas and federal laws that protect whistleblowers.

The FCA Law Benefits Whistleblowers in Some Instances

The False Claims Act (FCA) is a federal law enacted in 1863 that imposes significant monetary penalties on those who defraud the U.S. government. The FCA permits a special kind of lawsuit known as a qui tam action. This is a civil lawsuit involving a private citizen who has evidence of a fraud. This person can blow the whistle and sue the perpetrator on behalf of the government. If the lawsuit is successful, the whistleblower could be entitled to between 15 and 30 percent of the government’s recovery.

Potential Whistleblowers Take Note

The employment lawyers at Kilgore & Kilgore represent whistleblowers who assert claims under a variety of state and federal laws, including the FCA. If you have evidence of a fraud of the government, you are a potential whistleblower. Click here to learn more about Whistleblower Protection. To connect with an employment lawyer for a free review of the facts of your case, click here Contact Kilgore & Kilgore.

Whistleblowers Can Help the Government Pursue People Who Defraud

A qui tam action encourages whistleblowers to come forward and help the government pursue those who have defrauded it. Liability under the FCA requires that people knowingly present false or fraudulent claims for payment to the government. Qui tam cases might be premised on fraudulent billing practices under the Medicare or Medicaid programs. Other government fraud might be committed by federal contractors or vendors providing goods or services to the government.

After a qui tam action is filed under seal, the U.S. Department of Justice begins an investigation into the allegations and can ultimately intervene in the action. A qui tam action can take many years to make its way through the courts.

The Implied False Certification Theory of Liability

In June 2016, the U.S. Supreme Court issued an important opinion in a qui tam case. In Universal Health Services, Inc. v. United States, the Court held that the implied false certification theory could be a basis for a defendant’s liability under the FCA. Prior to the Court’s opinion, the lower federal appellate courts had disagreed over the validity and scope of this theory of liability.

In Universal Health Services, the alleged violations under the FCA arose under the Massachusetts Medicaid program. The case involved the death of a 17-year-old woman treated at a mental health facility. It was discovered that many of the alleged mental health workers who treated the woman lacked the proper qualifications and licenses to treat her.

A qui tam action was brought under the implied false certification theory of liability. The complaint asserted that reimbursement claims submitted under the Massachusetts Medicaid program showed that specific services were provided by particular professionals. However, these reimbursement claims failed to disclose the defendant’s noncompliance with regulatory staffing and licensing requirements. According to the complaint, the defendant defrauded the state Medicaid program because Medicaid paid defendant’s claims unaware of the staff’s regulatory violations.

An Employment Lawyer Must Prove Two Conditions under the Implied False Certification Theory

The Court held that FCA liability under the implied false certification theory can arise if two conditions are satisfied. First, the defendant must submit a claim for payment to the government that makes a specific representation about the goods or services provided. Second, the defendant must knowingly fail to disclose noncompliance with a material statutory, regulatory or contractual requirement. Further, the defendant’s omission must render its representations misleading.

FCA Liability Can Be Based on a Defendant’s Failure to Disclose

The Court held that a defendant’s failure to disclose its noncompliance with a legal requirement can be a basis for FCA liability. This is true even if that particular requirement was not expressly designated as a condition for payment.

The relevant inquiry, according to the Court, is whether the defendant knowingly violated a requirement that it knows is material to the government’s decision to pay the defendant. The Court emphasized that the materiality requirement is a rigorous standard. Ultimately, the Court vacated the judgment and remanded the matter to the lower courts. It is up to the lower courts to determine whether the complaint was sufficient under the Court’s guidelines.

Does it pay to be a Whistleblower?

Despite possessing proof of a government fraud, potential whistleblowers may have questions and concerns before stepping forward. There is a possibility of receiving monetary compensation if the government recoups damages through the provisions of the False Claims Act. However, achieving success involves a complex legal process. Kilgore & Kilgore can provide the legal assistance needed. Kilgore & Kilgore attorneys have experience with whistleblower protection cases. To learn more about Kilgore & Kilgore’s whistleblower protection law practice, click here Kilgore & Kilgore Whistleblower Protection. To get started on a free review of the facts of your case, click here Contact Kilgore & Kilgore.