Federal False Claims Act Q&A

These Federal False Claims Act (FCA) Questions & Answers are intended to be used by the reader for general informational purposes only. Due to the complex nature of the FCA, they should not be used as a substitute for professional legal advice. For specific questions on the FCA as they relate to individual cases, please contact the Compliance Department. 

1. What is the Federal False Claims Act?
   A: The Federal False Claims Act (FCA) is a civil statute whereby the U.S. government can recover monetary damages from parties who file fraudulent claims for payment of funds by the federal government. The FCA was enacted in 1863 and amended in 1986. The FCA was amended again on May 20, 2009, as part of the Fraud Enforcement and Recovery Act of 2009 (FERA).
    
2. What is the definition of a "claim" under the FCA?
   A: A claim is defined as “any request or demand, whether under a contract or otherwise, for money or property which is made to a contractor, grantee, or other recipient if the United States government provides any portion of the money or property which is requested or demanded, or if the government will reimburse such contractor, grantee, or other recipient for any portion of the money or property which is requested or demanded.”
    
3. What is a "false claim" under the FCA?
   A: In general, a false claim arises when a party submits a claim that will be paid partially or fully by the federal government that the submitting party knows or should have known to be false. One example would be a physician who submits a bill to Medicare for medical services that he/she knows, or should have known, he/she never provided. Another example would be when hospital management submits records to the government that indicate that the hospital is in compliance with certain regulatory and/or contractual requirements and management knows or should have known that the records are false.
    
4. What is a "reverse false claim"?
   A: A reverse false claim arises when a party knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the government. “Knowingly” can imply actual knowledge, deliberate ignorance or reckless disregard. “Improperly” can imply that the overpayment is not properly accounted for later-in-time via some established, formal reconciliation process. For example, if a hospital receives an overpayment from the government and actually knows about the overpayment but does not return it, the hospital may be held liable for the reverse false claim. If the hospital does not actually know about the overpayment but should have known about it, i.e., an effective reconciliation process would have uncovered the overpayment but was not put in place, the hospital may still be held liable for the reverse false claim.
    
5. Does the FCA apply only to claims presented directly to a government agent or officer?
   A: No. The FCA applies to all claims presented to state or local governments, contractors, grantees or other non-governmental recipients, as long as the claim is paid, in whole or in part, with federal funds. Additionally, the FCA applies to “reverse false claims” as described in the preceding section.
    
6. What are the penalties under the FCA?
   A: Parties who are found guilty of violating the FCA will be liable for the following:
   • Three times the amount of damages sustained by the government as a result of the false claim.
   • $5.5K - $11K per claim.
   • Exclusion from participating in Medicare, Medical and other federal healthcare programs.
7. Who can sue a party under the FCA?
   A: In addition to the government, any private person (private “relator”) who has information that the defendant has knowingly submitted or caused the submission of false or fraudulent claims to the United States can sue, even if such private person may not have been personally harmed by the defendant’s conduct. If the lawsuit is successful, the private relator will receive a percentage of the amount awarded.
    
8. Does the plaintiff have to prove that the false claim was submitted with the intent to defraud the government for the defendant to be held liable?
   A: No. The plaintiff only needs to prove that the defendant’s false statement was “material” to the payment of government funds, meaning the claim had a natural tendency to influence the payment or be capable of influencing the payment.