After more than three years of doing this blog, I just spotted a trend — I tend to blog less in June and July of each year. It just seems like there are less things to blog about during the summer months.
I was named to the Virginia Super Lawyers list as a “rising star” in Virginia for 2011, I suppose that is one new thing to report. Rising stars are those lawyers either under the age of 40 or who have been in practice less than 10 years.
Super Lawyers doesn’t yet have a category for qui tam or false claims act lawyers, but maybe they will soon.
Maybe next year Super Lawyers will have a category for Qui Tam…
Today the New Virginia Fraud Against Taxpayers Act Goes Into Effect
New laws passed by the Virginia General Assembly in its regular session and signed by the Governor traditionally go into effect on July 1, and today is no different.
Among the new laws going into effect today is the amended Virginia Fraud Against Taxpayers Act, Virginia Code 8.01-216.1 et seq. In case anyone didn’t follow my posts earlier this year about the General Assembly session, you can check them out now.
I have blogged extensively about the changes introduced in the new Virginia Fraud Against Taxpayers Act, but as I work on the Second Edition of my ebook on VFATA, which will hopefully be finished by the end of the month. But only if I get back to that now …
Stay tuned …
Commonsense Steps State and Local Governments Can Take to Fight Fraud and Strengthen False Claims Act Enforcement
Regular readers know that the single most important step a state government can take to limit fraudulent requests for payment is to pass a state false claims act modeled on the federal False Claims Act.
A state false claims act modeled on the federal FCA not only provides for treble damages, civil penalties, and mandatory attorney’s fees against those making false statements or claims to the government–perhaps most important, the “qui tam” provisions of statutes like the Virginia Fraud Against Taxpayers Act and the federal False Claims Act also deputize motivated individuals to do their bit by coming forward and hiring private counsel to prosecute these claims on behalf of both the individual and the state.
The second most important step is to make sure that the law is vigorously enforced. By that I mean the state government can and should take steps to insure that qui tam relators and their private counsel find receptive and capable government lawyers when they do file their cases. That usually entails creating some type of affirmative civil enforcement unit in the state Attorney General’s office and staffing it the proper way.
So lets say that a state has done those things, and is now looking around for a way to further the fight against false or fraudulent claims. What else can be done? Are there steps that can be taken by the various government agencies to further the work of the state AG and private citizens?
Indeed there are some very simple–and inexpensive–steps that can be taken.
One step that costs next to nothing is to require certain language on every invoice or other claim for payment submitted to the government. Here is an example from Virginia’s own Department of General Services. This form DGS-30-234 (which has been used since October of last year) is required of all construction contractors at the time of each invoice’s submission to the Commonwealth. Consider this sample from the DGS-30-234:
… I further certify that the claim is not the result of, or affected by, any act of collusion with another person engaged in the same line of business or commerce; or any act of fraud punishable under the Virginia Governmental Frauds Act, § 18.2-498.1, et seq. of the Code of Virginia. … I understand that any statements made, and known to be false, shall be a violation of the Virginia Governmental Frauds Act, punishable as a Class 6 Felony. In addition, I understand that any claim submitted in violation of the Virginia Fraud Against Taxpayers Act, § 8.01-216.1, et seq. of the Code of Virginia shall be subject to the civil penalties provided therein.
So how does this help fight fraud? The gravamen of a Virginia Fraud Against Taxpayers Act case is the knowing submission of a false claim to the government — such language ensures that no one can later claim ignorance of what the law requires if they sign this form every single time they submit an invoice.
The federal government realized long ago the efficacy of this method. For that reason, as a prerequisite to reimbursement, every health care cost report contains the following language:
Misrepresentation or falsification of any information contained in this cost report may be punishable by criminal, civil and administrative action, fine and/or imprisonment under federal law. Furthermore, if services identified in this report were provided or procured through the payment directly or indirectly of a kickback or where otherwise illegal, criminal, civil and administrative action, fines and/or imprisonment may result.
It is a well-established common law rule that where the government has conditioned payment of a claim upon a claimant’s certification of compliance with a statute or regulation, a claimant submits a false or fraudulent claim when he or she falsely certifies compliance with that statute or regulation.
It is important not to think of these cases as “false certification” cases, however. Indeed, the word “certification” does not appear in the text of the federal FCA or the VFATA. When the government conditions payment of a claim upon compliance with a statute or regulation, a claim that does not comply with that statute or regulation is not eligible for payment and is therefore false — end of story.
Earlier this month, an important Mixx Delicious Digg Facebook Twitter
Is there a False Claims Act in the works for Australia?
There appears to be some interest on the part of the Australians in American False Claims Act jurisprudence, according to Thomas Faunce at Australian National University.
I have blogged in the past about my testimony and efforts to assist state legislators across the country with false claims act legislation, as well as what those states might expect from a state false claims act. Hopefully the same rationale would apply to the Aussies.
Furthermore, there can be no doubt that false claims legislation is business-friendly.
More to follow, stay tuned …
Announcing the First New York State False Claims Act Conference
In a strong show of New York state’s support for its False Claims Act, today New York State Attorney General Eric T. Schneiderman announced a CLE-certified conference on the strengthened New York False Claims Act.
The conference will take place on June 8, 2011 at New York University Law School, and is open to everyone who registers in advance. For complete details please see the /files/116785-109034/Syllabus_for_Qui_Tam_Conference___New_York.pdf”>Speakers at the conference include leading national qui tam attorneys, as well as the leading affirmative civil enforcement folks from the New York AG’s office. I am quite sorry I will have to miss it, as I have a previous commitment that day. This is going to be an outstanding seminar folks!
We had a similar program in Virginia in 2008, with great success. We didn’t charge for the event, which was held at the Virginia OAG, and about 100 lawyers attended. The materials I prepared for the 2008 conference were also the basis for my ebook on the Virginia Fraud Against Taxpayers Act.
Hopefully this will just be first of many future New York state conferences, and I hope also that we will be able to have a second conference in Richmond either this year or next year to cover our new and improved Virginia Fraud Against Taxpayers Act.
Extra special thanks to the folks in New York for their thought leadership!
Judge Payne says “Hire Local Counsel in the U.S. District Court for the Eastern District of Virginia”
The Virginia Lawyers Weekly blog has an excellent post today on the importance of local counsel in the Rocket Docket.
Indeed, lawyers outside the rocket docket are often unfamiliar with the speed and intensity of litigation in the E.D.Va., and little things–like the fact that a lawyer has to begin preparing trial exhibits during discovery, and exchange trial exhibits just days after the close of discovery–often throw lawyers for a loop.
I also agree that local counsel should be involved in the drafting of the pleadings–as the complaint and answer frame the rest of the litigation, litigants must prepare those filings with the nature of litigation in this district in mind.
The comments from Judge Payne were part of a CLE seminar sponsored by the Richmond Bar Association.
“Kickback” definition in False Claims Act cases
“Kickback” definition in False Claims Act cases
Previously, I have blogged about the inherently complex and nuanced nature of qui tam litigation. Today I want to talk a little bit about the word “kickback” and the history of that word in the English language and in FCA jurisprudence.
While the concept of kickbacks is central to many different types of FCA cases, we most often see it in the health care context. That is because (1) there are lucrative incentives for physicians and other health care providers to pay or receive kickbacks for the referral of health care services; and (2) there are stringent prohibitions on the payment or receipt of kickbacks in exchange for the referral of health care services for which the government will ultimately pay.
These stringent prohibitions include the Anti-Kickback Statute (“AKS”) (42 U.S.C. § 1320a-7b(b)). The AKS is criminal statute which prohibits any person from making or accepting payment to induce or reward any person for referring, recommending, or arranging for the purchase of any item for which payment may be made under a federally-funded health care program.
Where reimbursement for health care services is claimed from the government, the provider is required to verify that no kickbacks were paid and/or received for the referral of the services for which reimbursement is requested. Every cost report, for example, contains a certification that must be signed by the chief administrator of the provider or a responsible designee of the administrator. Each and every cost report requires providers to certify that:
Misrepresentation or falsification of any information contained in this cost report may be punishable by criminal, civil and administrative action, fine and/or imprisonment under federal law. Furthermore, if services identified in this report were provided or procured through the payment directly or indirectly of a kickback or where otherwise illegal, criminal, civil and administrative action, fines and/or imprisonment may result.
This is just one example, but the overtones should be clear—government health care programs will not pay claims that are tainted in any way, shape, or form, by kickbacks. Thus, although AKS is a criminal statute with no private right of action, a violation of AKS renders each and every tainted claim submitted to the government “false” within the meaning the federal False Claims Act and/or Virginia Fraud Against Taxpayers Act.
So when is a payment a kickback? It turns out there are an almost infinite amount of ways for health care providers to pay or receive kickbacks, and a lawyer exploring the jurisprudence defining the term kickback is apt to be confused.
For example, some cases state that in order to be a kickback, the payments must be based on a percentage of the value of the services referred. In other words, “Provider A” agrees to refer patients in need of specific services to “Provider B” who will then pay Provider A a fee equal to 10% of the value of the imaging work.
It is true that where one provider pays another provider a percentage of the reimbursable value of the services referred, we normally have a clear-cut AKS violation. (I say “normally” because there are several safe-harbors, created by HHS-OIG, that permit arrangements that would otherwise be illegal).
Although percentage-based payments made by one health care provider to a provider with the power to refer patients may be clearly unlawful, it is by no means required that the payment amounts be based on a percentage in order to be kickbacks. You will, however, find published cases to this effect.
Perhaps more importantly, any qui tam lawyer handling a kickback case where the payments were not based on a percentage is apt to find themselves facing that argument on a 9(b) motion.
The idea that in order to be a kickback a payment must be based on a percentage does not come from FCA jurisprudence, but rather from some definitions of the term “kickback.” In fact, Webster’s Third International Dictionary defines a kickback as “a percentage payment … for granting assistance by one in a position to open up or control a source of income …”
But a payment does not have to be on a percentage basis in order to be a kickback. In fact, any payment from one provider to another with with a corrupt or unlawful purposes, and that will be covered in the next post in this series.
