What is the False Claims Act?

The False Claims Act was originally instituted during the Civil War to protect the Union Army from malicious military contractors and has been amended many times since. Any person may file an action under the FCA, and Wisconsin residents dealing with business that involve the government or an agency that works with the government may benefit from being familiar with its basic principles.

The FCA comes into play whenever a person knowingly submits a false claim to the government or related agency seeking money, property or approval of certain actions. It must be shown that the person knew or reasonably should have known that the claim was false when they filed and showed deliberate ignorance or disregard for the truth. The liabilities for a false claim are outlined in general terms. They include a payment of penalties and fines in excess of the cost of damages sustained by the government.

The false claim can be brought to the court’s attention via a qui tam complaint by any private person with direct knowledge of the infraction. Such persons are called relators. After the filing, the government has 60 days to investigate and take their own action on the complaint or to decline action. The relator then has the option of continuing the suit on their own, but the government still has the final say in settlement actions and participation. The FCA provides incentives of between 15 percent and 30 percent of the damages to the relator.

A person can file a complaint and lawsuit under the FCA in many instances. Issues with improper medical billing and coding under Medicare are among the most common complaints. The information in this piece should not be considered legal advice, and those who seek to file an action under the FCA may benefit from discussing the issue with an attorney.

Source: US department of Justice , “The False Claims Act: A Primer “, December 05, 2014

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