According to the US Justice Department, Medical device maker Endoscopic Technologies Inc. will pay $1.4 million to settle Medicare Fraud claims involving surgical ablation devices. US officials say the manufacturer gave kickbacks to health care providers and engaged in conversations with them about inflating Medicare payments for certain procedures. Endoscopic Technologies, also known as Estech, is also accused of encouraging the use of the ablation devices in situations when less-invasive procedures would have sufficed.
The case is a Qui Tam lawsuit, which allows the private citizen that filed the complaint on behalf of the US government to receive part of the settlement. The citizen that filed this whistleblower complaint will receive $210,000.
The False Claims Act stipulates that any contractor that knowingly makes a false claim for payment to the US government is committing fraud. With Qui Tam litigation, citizen whistleblowers can file lawsuits to combat government fraud.
Per the False Claims Act, a whistleblower lawsuit can be brought if a party:
• Purposely submitted a bogus or false payment claim.
• Knew that a false statement or record was issued for the purposes of obtaining payment or approval of the claim by the government.
• Purposely made a bogus record or issued a false statement to cover up or decrease the responsibility owed to give property to or pay the US government.
• Conspired to defraud the federal government by trying to get a bogus payment approved or paid.
Effective May 28, 2009, the Fraud Enforcement and Recovery Act of 2009 is here to enhance the Federal False Claims Act. This new act gives whistleblowers additional protections while fixing issues that exist with the False Claims Act.
Among the provisions of the new law:
• Provides whistleblower protection to sub-contractors, contractors, and agents when they report fraud.
• Eliminates the “specific intent” requirement. A plaintiff can sue if the subcontractor knowingly used a false statement and was paid.
• Lets whistleblowers expose fraud when Government funds are at risk.
Whistleblowers initiate over 80% of False Claims Act. Because the whistleblowers are compensated for their efforts and the Government must be made whole, the False Claims Act calls for three times the damages.
Medical-Device Maker Agrees To Settle Medicare Fraud Claim, Wall Street Journal, July 14, 2009
A Ray of Light: Obama Changes FCA To Protect Whistleblowers, OpEd News, July 2, 2009
Related Web Resources:
Taxpayers Against Fraud Education Fund
Fraud Enforcement and Recovery Act of 2009, Open Congress