Businesses Reach for the False Claims Act to Level the Playing Field Against Dishonest Competitors

Increasingly, corporations are filing qui tam lawsuits against competitors. Many of these cases stem from the perception that the competitors are gaining and unfair advantage by engaging in fraud in one form or another. Because these relator-entities are well-placed to understand the key players and the industry, qui tam actions are often successful and appreciated.

In the most recent example, a California ambulance company filed a Medicare fraud qui tam against five competitors, alleging that the defendants engaged in so-called “swapping” kickback schemes by providing deeply discounted – and often below cost -ambulance services to hospitals and/or skilled nursing facilities in exchange for exclusive rights to the facilities’ more lucrative Medicare patient referrals. Such alleged arrangements could run afoul of the Anti-Kickback Statute and lead to over-utilization of Medicare Part B transport services.

In May 2015, all five defendants agreed to collectively pay more than $11.5 million in payments to the government to resolve the kickback allegations. The relator will receive a whistleblower reward of nearly $2 million. Further, the defendants entered into Corporate Integrity Agreements; the competitor who filed the whistleblower qui tam lawsuit no doubt would appreciate this, as the CIAs should have the effect of preventing its competitors from engaging in further misconduct.

More information for whistleblowers is located at the Nolan Auerbach & White website.

 

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