The Federal False Claims Act is an important piece of legislation that may not be familiar to Boston residents. Essentially, a provision of the Federal False Claims Act allows anyone who uncovers fraud being perpetrated on a government program, such as Medicaid or Social Security, to sue on behalf of the government. To encourage the reporting of waste and the uncovering of illegal behavior, the Federal False Claims Act allows the whistleblower to share in any damages that are eventually awarded in the resultant lawsuit.
For an example of the Federal False Claims Act in action, look no further than a recent case involving a large healthcare company and allegations that it defrauded Medicare.
The company in this instance, Odyssey Healthcare, provides hospice services in 27 states. Odyssey was recently sued after allegedly overbilling Medicare for needless services or else providing expensive treatments that did not fit within Medicare guidelines so that it could pad its reimbursement report. The misconduct occurred between January 2006 and January 2009. (Odyssey Healthcare was purchased by Gentiva Healthcare in 2010).
Odyssey recently paid $25 million to resolve the lawsuit, which was brought under the Federal False Claims Act. It also had to sign a "corporate integrity agreement" meant to provide the government with assurance that such fraud would not be happen again.
As you can see, the Federal False Claims Act can be a very effective tool in cutting down on the waste and fraud that sap resources away from worthy programs and squander our tax dollars. Watch this blog for continuing updates on the Federal False Claims Act and how it can be used in practice to reward whistleblowers and keep companies that work with or for the government honest.
Source: The North Country Gazette, "Odyssey Healthcare Falsely Billed For Hospice Services," March 4, 2012