Common Types of Qui Tam Cases

Qui tam cases are brought by whistleblowers against companies who have committed fraudulent acts against the U.S. government in order to receive economic gain. Fraud against the Government comes in many forms, but some of the most prevalent types of qui tam cases are:

Kickback Cases
Many qui tam cases target kickbacks paid to induce Government healthcare services, such as Medicare and Medicaid, or other Government services. Unlawful kickbacks include any remuneration (bribes, discounts, etc.) paid with an intent to induce Government business. United States ex rel. Gale v. Omnicare ($116 million non-intervened settlement of claims against long-term care pharmacy arising from unlawful kickbacks paid to nursing homes to induce drug purchases) and United States ex rel. Simmons v. Meridian ($5.1 million non-intervened settlement arising from unlawful kickbacks paid by ambulatory surgical center (ASC) owners to physicians to induce referrals of patients to ASCs) are both examples of kickback cases. Learn more about these cases here.

Medical Provider Billing Fraud Cases
Whistleblowers can also bring qui tam cases against medical providers such as hospitals, clinics, or home health services for fraudulent billing practices that harm Government healthcare payers. Fraudulent billing schemes include forged record, double-billing, and “upcoding” (billing for a more expensive procedure than the one performed). A pending case involving fraudulent billing is United States ex rel. Raffington v. BonSecours, which alleges that Defendants billed Medicare for services reimbursable only at less expensive Medicare rates, forged doctors’ signatures, falsified patient records, and other illegal practices.

Defense Contracting Cases
Qui tam cases can be brought against Government contractors, such as Defense Contractors, for contractual violations such as the sale of substandard parts. For example, Defense contractor L-3 Communications Holdings, Inc. recently paid $25.6 million to settle a qui tam lawsuit accusing the company of selling thousands of holographic weapon sights which the company knew were defective. Learn more about these cases here.

Best Price Cases
Another type of case against Government contractors is price manipulation or “best price” cases. Government contracts typically require that vendors give the Government the company’s “best price,” so overcharging governmental entities can be actionable. One such case is United States ex rel. Sherwin v. Office Depot ($11 million settlement of claims for overcharging governmental entities for office and classroom supplies).

Off-label Marketing Cases
Whistleblowers can file qui tam cases based on off-label or otherwise unlawful marketing of pharmaceutical drugs to induce purchases of those drugs. For instance, United States ex rel. Marchese v. Cell Therapeutics, Inc. ($10.5 million intervened settlement against pharmaceutical manufacturer arising from unlawful marketing to induce purchases of cancer drugs) both brought off-label marketing claims.

Some other types of whistleblower cases include:

Trade Agreements Act (“TAA”) Cases
The U.S. Trade Agreements Act (“TAA”) governs many manufacturing contracts, so violations of the TAA in Government contracts can give rise to qui tam cases. United States ex rel. Cox v. Smith & Nephew and United States ex rel. Cox v. Medtronic both settled (for $11.3 million and $4.4 million respectively) based on claims that the companies violated the TAA by selling products to the Government that was manufactured in countries with which the U.S. is not a trading partner.

Dodd-Frank, FCPA, and Financial Fraud Cases
Qui tam cases involving healthcare and contracting fraud, as described above, are most often brought under the Federal False Claims Act. But other statutes, such as the Dodd-Frank Act and the Foreign Corrupt Practices Act (“FCPA”), also allow whistleblowers to bring qui tam cases for fraudulent financial activity. Dodd-Frank and FCPA violations can include SEC Filings which falsely state a company’s financials or falsely certify compliance with FCPA regulations.

If you believe you have witnessed wrongdoing in your place of business, contact the whistleblower and qui tam lawsuit lawyers at Sanford Heisler Sharp, LLP today for a free evaluation of your case.

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