qui tam suit originally filed by four whistleblowers under the False Claims Act (“FCA”) in 2007 reached a conclusion earlier this month, with the Minnesota-based Mayo Clinic agreeing to resolve all claims for $1.26 million. The whistleblower complaint alleged that the nationally-prominent health care facility fraudulently billed Medicare and Medicaid over a ten year period for surgical pathology services that were in fact never performed. The complaint also alleged that the Mayo Clinic had systematically failed to comply with federal regulations concerning the amount of time for which tissue pathology slides must be retained for ten years. Billing for services not rendered is one of many manifestations of health care fraud that give rise to qui tam actions under the FCA. The U.S. Department of Justice (“DOJ”) elected to intervene in the count of the lawsuit that alleged billing for procedures never performed in 2010. The settlement includes $263,000 already voluntarily paid to the government by Mayo, along with an additional $1 million. As a result of their participation in the lawsuit, the whistleblowers will share in a $229,822 monetary award.

Under the FCA, a qui tam statute dating back to 1863, relators (i.e., whistleblowers) may sue on behalf of the government for fraud. Liability occurs under the FCA when a person either knowingly or with reckless disregard submits a “false claim” for payment to the government, or a grantee or beneficiary of government funding. Additionally, there is liability under the statute for so-called “reverse false claims,” or failing to return an overpayment from the government. Recent changes to the law, particularly in the wake of passage of the Dodd-Frank Bill and the PPACA in 2010, have increased the number of types of actionable FCA fraud and heightened the Act’s protections against employer retaliation. The statute’s anti-retaliation provisions are designed to deter employers from taking adverse actions against any employee, contractor, or agent who makes lawful efforts to stop a violation of the FCA.




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