ATTORNEY NEWSLETTER
Government Adds Defendants To Qui Tam Case
Allegations Of Kickbacks For Referrals
Further Allegations Of Unnecessary Testing
Federal and California laws authorize private citizens to bring suits against businesses and individuals believed to be defrauding the government. False Claims Act, (“FCA”), 31 U.S.C. § 3729 et seq.(federal) and California False Claims Act (“CFCA”), Cal. Gov’t Code § 12650 et seq. (State). Much government fraud occurs in the healthcare sector under programs like Medicare (federal) and Medi-Cal (State of California) and may involve violations of other federal laws like the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b, and the Stark Law, 42 U.S.C. § 1395nn. Cases brought by private citizens (referred to in the law as “relators”) are known as “qui tam actions.” Qui tam actions recover billions for the government every year. In fact, individuals bring more enforcement efforts against companies defrauding the government than the government itself brings. The FCA and CFCA authorize awards to relators for bringing and prosecuting these cases concerning fraud on the government. 31 U.S.C. §3730 (d)(federal) and Cal. Gov’t Code § 12652(g)(State). Frequently, relators are current or former employees, representatives or agents of the businesses committing the alleged fraud. If you have credible information of fraud against the government in violation of the FCA and live in Los Angeles or elsewhere in California, call us today at (415)441-8669 and we can help. Our toll-free number is 1-888-50EVANS (888-503-8267).
Recent Anti-Kickback Statute Case[1]
The U.S. Department of Justice (DOJ) recently amended its complaint in a laboratory testing fraud case to add additional defendant physicians. The case, initiated by a lab with credible information of the alleged fraud, alleges False Claims Act violations based on patient referrals in violation of the Anti-Kickback Statute and the Stark Law. The amended complaint further alleges that the additional defendants caused claims to be improperly billed to federal health care programs for medically unnecessary laboratory testing. According to the United States’ complaint, defendants received thousands of dollars in kickbacks in return for their referrals of laboratory testing. The complaint alleges that certain laboratories conspired with hospitals to pay physicians to induce referrals to the hospitals for laboratory testing, which was then performed by the defendant laboratories. As alleged in the complaint, the hospitals paid a portion of their laboratory profits to recruiters, who in turn kicked back those funds to the referring physicians. The recruiters allegedly set up companies known as management service organizations (MSOs) to make payments to referring physicians that were disguised as investment returns but were actually based on, and offered in exchange for, the physicians’ referrals. The complaint alleges that laboratory tests resulting from this referral scheme were billed to various federal health care programs, and that the claims not only were tainted by improper inducements but, in many cases, also involved tests that were not reasonable and necessary.
How A Qui Tam Action Begins
Individuals with original and credible information of false claims, like relators in the reported case, begin FCA qui tam cases by filing a complaint under seal in the federal court. At the same time, the relator submits a disclosure to the DOJ outlining the material evidence the relator has of the alleged false claims. 31 U.S.C. § 3730(b). The seal period of the complaint lasts 60 days during which the DOJ investigates the claims. 31 U.S.C. § 3730(b)(2). (If necessary, the government can, and often does, extend the 60-day period during which the allegations are kept under seal.) If the government decides to intervene in the case, the government essentially takes over the litigation. 31 U.S.C. § 3730(c)(1). If the government declines to intervene, the relator may proceed with the litigation on his or her own. 31 U.S.C. § 3730(c)(3).
Contact Us
If you have credible information of government fraud in Los Angeles or elsewhere in California, call Ingrid M. Evans at (415) 441-8669, or toll-free at 1-888-50EVANS (888-503-8267) or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>. In addition to FCA and CFCA whistleblower cases, Ingrid and Evans Law Firm, Inc. also handle bank fraud whistleblower cases under FIRREA/FIAFEA, commodity trading and securities fraud under the Commodities Futures Trading Commission Whistleblower Program and the Securities and Exchange Commission Whistleblower Program, and tax fraud under the Internal Revenue Service Whistleblower Program.
[1] Evans Law Firm, Inc. was not involved in the case in any way. The reported case is captioned United States ex rel. STF, LLC v. True Health Diagnostics, LLC, et al., No. 4:16-cv-547 (E.D. Tex.).
