Wednesday, May 20, 2009

President signs False Claims Act amendments bill

President Obama has signed the Fraud Enforecment and Recovery Act into law. In his signing statement, the President stressed the importance of safeguarding the "precious taxpayer dollars" needed for economic recovery.

Among the provisions of the law are sections that amend the False Claims Act. The amendments clarify terms used in the original law that were not defined in the statute. Some court opinions construed the terms in ways that did not always accord with congressional intent.

The bill's sponsors believe the amendments will strengthen a law that has already resulted in over $20 billion in recoveries since 1986.

US intervenes in qui tam suit against school lunch meat suppliers

The Dept. of Justice announced on May 1 that it has intervened in a whistleblower suit against two former suppliers to the National School Lunch Program for submitting false claims to the Dept. of Agriculture.

The two companies, Hallmark Meat Packing Company and Westland Meat Company Inc., are charged with falsely representing that all cattle at their slaughtering facility are humanely handled in accordance with federal regulations and that no meat from disabled, non-ambulatory cattle was supplied to the National School Lunch Program.

US and 16 states join qui tam suits against Wyeth

The United States and 16 states have joined in two whistleblower suits that allege that Wyeth, a drug manufacturer, Wyeth, failed to pay rebates they were required to make to the Medicaid program. Two drugs, Protonix Oral and Protonix IV, used to suppress stomach acid, are at issue in the suits.

Wyeth offered deep discounts to hospitals that used the drugs and failed to report those discounts to the government and to give the government the same discounts.

California, Delaware, the District of Columbia, Florida, Illinois, Indiana, Louisiana, Massachusetts, New York, Michigan, Nevada, New Hampshire, Tennessee, Texas, Virginia and Wisconsin also have intervened in the whistleblower suits against Wyeth.

Feds announce new efforts to curb health care fraud

The Justice Department and the Dept. of Health and Human Services announced the creation of a new interagency effort to combat Medicare fraud.

In addition to the new Health Care Fraud Prevention and Enforcement Action Team (HEAT), the two agencies will add joint DOJ-HHS Medicare Fraud Strike Forces in Detroit and Houston. There are already such strike forces in South Florida and Los Angeles.

The strike forces use a data-driven approach to identify unexplainable billing patterns and investigate those providers for possible fraudulent activity. The Florida team has already convicted 146 defendants and secured $186 million in criminal fines and civil recoveries. In Los Angeles more than $55 million has been ordered in restitution to the Medicare program.

Minnesota enacts state false claims act

Minnesota Governor Tim Pawlenty has signed S.F. 2082, an omnibus budget bill that includes provisions allowing private citizens who discover fraud against the state to bring qui tam actions.

The law provides for an award to a successful qui tam plaintiff of between 15 and 30 percent of the recovery, plus attorney's fees and expenses. It also contains protections for whistleblowers against retailiation by employers.

The effective date of the law is July 10, 2010.

Tuesday, May 19, 2009

FCA amendments presented to president for signature

The Fraud Enforcement and Recovery Act, Senate Bill 386, has received congressional approval and has been presented to the president for signature. The bill includes provisions that would strengthen the federal False Claims Act. It also seeks to improve enforcement of mortgage fraud, securities and commodities fraud and financial institution fraud.

The House voted 338-52 on May 18 to accept the Senate's amendments.

Senator Leahy, on introducing the bill, said, "We must reinvigorate our anti-fraud measures and give law enforcement the tools and resources they need to root out fraud so that it can never again place our financial system at risk. Taxpayers, who bear the burden of this financial downturn, deserve to know that government is doing all it can to hold responsible those who committed fraud in the run-up to this collapse. This bill will do just that."