What is the FCA?
The FCA is shorthand for the False Claims Act, a federal statute that enables whistleblowers in the United States to report fraud on the government, such as Medicare fraud. The FCA encourages employees and other insiders to report fraudulent use of government funds by providing them a financial reward of up to 30% of the funds recovered. The FCA also prohibits employers from retaliating against whistleblowers. Nearly all FCA claims are brought by individuals represented by whistblower attorneys who file a qui tam lawsuit in federal court. The government can then “intervene” in the suit and prosecute the FCA claims.
What is the FCA? Understanding the False Claims Act for Potential Whistleblowers
If you’re wondering what the FCA is, you may have encountered fraud in the workplace or are concerned about illegal activity involving government funds. The FCA, or the False Claims Act, is a powerful tool for whistleblowers who want to expose fraud against the U.S. government. Originally enacted during the Civil War to combat fraud by contractors selling defective goods to the Union Army, the FCA remains one of the most effective laws for holding companies accountable for defrauding the government.
But how does the FCA work, and what should you know if you’re considering reporting fraud? Who can file a claim under the FCA, what protections you have as a whistleblower, and how you can potentially receive a financial reward for bringing a successful case?
What is the False Claims Act?
The False Claims Act is a federal law that allows private citizens (known as “relators”) to file lawsuits on behalf of the government when they have evidence that a person or company is defrauding the government. These cases are called “qui tam” lawsuits, and they are unique because they allow whistleblowers to share in any financial recovery made by the government as a result of the lawsuit.
Fraud under the FCA can take many forms, but some of the most common examples include:
- Overcharging the government for goods or services
- Submitting false invoices
- Falsely certifying compliance with regulatory requirements
- Delivering substandard products or services under a government contract
- Falsifying eligibility for government programs like Medicare or Medicaid
- Providing kickbacks
How Does the FCA Work?
When you file a qui tam lawsuit under the FCA, the case is initially filed under seal, meaning it is kept confidential while the government investigates the allegations. The Department of Justice (DOJ) then has the option to intervene in the case and take over the prosecution, or it can decline to intervene, allowing the whistleblower to continue the case on their own.
If the case results in a recovery of funds, whether through a settlement or a trial verdict, the whistleblower (the relator) can receive a percentage of the recovery, typically between 15% and 30%. The exact percentage depends on whether the government intervened and the extent of the relator’s contribution to the case.
Who Can File an FCA Case?
Any employee, contractor, or individual who has firsthand knowledge of fraud can file a qui tam lawsuit. You do not need to be directly involved in the fraudulent activity, but you must have non-public information that can serve as the basis for the claim.
It’s important to act quickly, as the FCA has a statute of limitations. You generally have six years from the date of the fraudulent activity to file a claim, though this can vary depending on the specific circumstances of the case.
Whistleblower Protections Under the FCA
One of the biggest concerns for employees considering becoming whistleblowers is the fear of retaliation. The FCA includes strong protections against retaliation, making it illegal for employers to fire, demote, suspend, harass, or discriminate against whistleblowers. If you experience retaliation, you can sue for reinstatement, back pay, and other damages.
However, navigating the legal process and ensuring your rights are protected can be complicated, which is why many whistleblowers choose to work with an experienced attorney who specializes in FCA cases. A whistleblower attorney can help you gather evidence, file the necessary paperwork, and advocate on your behalf to maximize your chances of success.
Real-Life Example: Whistleblower Awarded Millions for FCA Case
A recent example of a successful whistleblower case under the FCA involves the pharmaceutical company Biogen. In September 2022, Biogen agreed to pay $900 million to resolve allegations that it paid kickbacks to doctors to encourage them to prescribe its drugs. The whistleblower in this case, a former Biogen employee, had firsthand knowledge of the company’s illegal practices and filed a qui tam lawsuit.
As a result of the settlement, the whistleblower received a reward of nearly $250 million—the largest whistleblower award in U.S. history under the False Claims Act. This case highlights how impactful the FCA can be, not only in uncovering fraud but also in providing significant financial incentives for whistleblowers to come forward.
Conclusion: Should You Consider Filing an FCA Case?
If you believe you have information about fraud against the government, the FCA offers a powerful avenue to expose wrongdoing while potentially earning a significant reward. However, the process can be complex, and you may face challenges along the way, including retaliation from your employer. Consulting with a whistleblower attorney can help you evaluate your options and protect your rights.
Understanding what the FCA is—and how it works—can empower employees to take action against fraud and help recover taxpayer dollars. If you’re considering reporting fraud, it’s essential to act quickly and seek legal advice to navigate the process effectively.
