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Articles
In-house Counsel Beware: The False Claims Act Might Impact Your Business
November 2009
Laemmle-Weidenfeld, Laura F.
You have all seen the headlines trumpeting the government’s latest recovery of tens, or even hundreds, of millions of dollars for fraud committed by health care providers. For example, in June 2009 the Office of Inspector General (OIG) of the Department of Health and Human Services announced that it expected recoveries of more than $2.4 billion for the first half of fiscal year 2009. The primary weapon used by the government to recover such vast sums has been the civil False Claims Act (FCA), a statute originally enacted to reach fraud by government contractors that has also been used extensively against healthcare providers for more than 15 years. Two features of the FCA make it a particularly potent weapon. First, it imposes liability of treble damages plus potentially ruinous civil penalties. Second, the FCA permits whistleblowers to initiate an action in the name of the United States in return for 15-30 percent of any recovery by the government.
Until now, those of you who work for companies that are neither government contractors nor healthcare providers have been able to largely ignore the FCA and watch from the sidelines. Not anymore. As a result of the financial meltdown of 2008-2009, Congress amended the FCA to (1) apply to companies that receive, directly or indirectly, federal Troubled Asset Relief Program (TARP) stimulus or other bailout funds; and (2) make it easier for whistleblowers and the United States to initiate and prosecute an FCA action. For example, under the revised FCA, if your company applies for a loan from a bank that has received federal bailout funds or is insured by a recipient of such funds, the FCA may now apply to the loan transaction and you ignore the FCA at your peril. You can protect yourself and your company by adopting and implementing a compliance program that sets forth standards of lawful and ethical conduct, educates employees about those standards and monitors their adherence.
To read the full article, click below.
In-house Counsel Beware: The False Claims Act Might Impact Your Business [PDF]
Reprinted with permission of the authors and the Association of Corporate Counsel as it originally appeared: “In-house Counsel Beware: The False Claims Act Might Impact Your Business,” ACC Docket 27, no. 9 (November 2009):56-66. Copyright © 2009 the Association of Corporate Counsel. All rights reserved. Legal resources such as this are available to members at no charge. If you are interested in joining ACC, please go to www.acc.com, call 202.293.4103, ext. 360, or email .
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