The Justice Department today announced a record False Claims Act settlement against a home health care provider, Amedisys, Inc. We are happy for our client who as a relator was instrumental in the investigation and this settlement and we are grateful to our co-counsel Kenney & McCafferty with whom we teamed up to file the qui tam suit in Philadelphia in 2010.
We rely on health care facilities to be up-front with us when we have to seek care for ourselves. We put a certain level of trust in our physicians to give us the medicine that we need -- and not to use our diseases or maladies as a means to exploit the system and turn a profit.
When this happens, it can be a real blow to our trust in the entire health care system. Fortunately, though, there are agents of good who help to show us where things go wrong -- and to help put a stop to them.
It is April 15, tax day: do you know where your tax dollars are? In prior posts, we have noted the IRS' failure to utilize the whistleblower program Congress gave them seven years ago and contrasted it to the success the New York Attorney General is having pursuing whistleblower tax cases under his state's False Claims Act. The IRS' recently issued Annual Report is more bad news. It is the latest evidence that the IRS is failing whistleblowers and taxpayers alike, failing to follow whistleblower tips and leaving hundreds of millions of dollars of taxes uncollected. This Report goes in the "read it and weep" category for everyone who plays by the rules. The reasons for the IRS' failures are many, including that the General Counsel to the IRS when the whistleblower law was passed did not support it; while he has not left the IRS, there are other hurdles as well. Unfortunately, despite the efforts of many whistleblowers and their lawyers the IRS is just not showing the results they could and should be. We don't see that changing anytime soon. Let's hope we are pleasantly surprised.
At one time or another, many of us have seen things go on at work that we wish we hadn't. We may not always agree with the policies of the employers we work for, but making sure that we are on the same page with them is an important part of being an employee. That concept only works to a certain point, however. If illicit activities are taking place, then many people feel they have an obligation to do something about it.
When the activity involves dealings with government agencies, then it may fall to a whistleblower to expose the wrongdoing. Being a whistleblower takes a rare combination of bravery, patience and resolve. Many whistleblowers face adversity, and some are no longer have the same jobs when their cases are finally decided. The wait, however, can be worth it.
In recent weeks on our Boston whistleblower law blog, we have discussed a wide variety of cases that were brought under the terms of the False Claims Act, including those involving construction, ocean shipping and health care. What the cases have in common is the fact that brave whistleblowers brought allegations of agency misconduct to the attention of the federal government, resulting in large settlement amounts being paid by the companies in question.
This week, we have yet another case brought under the False Claims Act involving government contracts: national defense. This is obviously an important category of government contract, as defense firms can be quite literally responsible for American lives. It's not an unreasonable expectation for the public to assume that companies who supply some of our military might are acting on the up and up when it comes to fulfilling the terms of their contracts.
The False Claims Act has a rich history in our country. Dating back more than 150 years, the legislation -- known as Lincoln's Law after the president who signed it -- has helped people bring cases and recover damages when they bring malfeasance to the attention of the government. One of the strengths of the law is its diversity. Any number of industries and vocations could come into play in relation to the law, whether in Boston or anywhere else in the country.
Recently, a large construction company agreed to a $1 million settlement over claims by a small business owner that his company was being shut out of business that the larger company had promised. The case fell under the purview of the False Claims Act because the projects in question were funded by federal contracts.
Collusion among government contractors is bad for everyone. Aside from undermining the free-market system by not playing fair, competitors that share confidential information can unjustly profit from the government. It may take a whistleblower using the False Claims Act to bring the wrongdoing to the attention of government authorities -- a service that could be handsomely rewarded.
Earlier this month, the government announced a settlement with two ocean shipping companies, Horizon Lines and Sea Star Line, over allegations that the two companies communicated with each other in order to fix government cargo transportation contract prices. The two companies will pay more than $3 million as a result, though they admit no liability as a result of the settlement.
The World Bank recently released the results of an internal study which suggests that 46% of respondents lacked confidence that they could report unethical conduct "without fear of reprisal." Assuming the sample size is a fair cross section of all employees, that's a pretty staggering number. Half of an organization's employees think that speaking up about something improper will get you in trouble, or worse still, will cost you your job?
New York Attorney General, Eric Schneiderman has been given permission by the New York Appellate Court to continue a lawsuit against Sprint-Nextel Corp. using the state's False Claims Act. See Press Release. The suit alleges that Sprint was involved in a scheme to deliberately evade sales tax, which cost state and local governments approximately $130 million. The New York State False Claims Act specifically covers tax fraud and the Attorney General began its investigation of Sprint after a whistleblower filed a qui tam action in March 2011.
It often takes the sharp-eyed actions of a whistleblower to bring allegations of fraud to the attention of authorities. Outside officials from the government don't have the visibility that a company's internal employee would have, so in many cases, a whistleblower is the only viable way that fraud might be uncovered -- and put to a halt -- via the False Claims Act.
Recently, a mental health facility in Tennessee agreed to pay $800,000 in order to settle allegations that were initially reported by a whistleblower under the terms of Lincoln's Law. The allegations were that the facility routinely engaged in a practice known as upcoding to overbill Medicaid.