Courts have shown increased willingness to unseal civil fraud claims, giving government officials less time to investigate allegations and decide whether to join the case, according to a healthcare attorney who argues the feds may limit their involvement in fraud cases as a result.
In a Forbes contributed post, Michael K. Loucks, a partner with Skadden Arps in New York, pointed to recent rulings in which courts have been reluctant to keep civil fraud allegations under seal. In the past, courts have been willing to keep whistleblower claims under seal for several years while the Department of Justice gathered evidence. With less time, DOJ officials will be forced to make hastier decisions regarding whether or not to join False Claims Act allegations, which will likely lead to government intervention in fewer cases.
“Time--until recently the government’s ally--will suddenly become its albatross,” Loucks wrote.
Last year was a record year for successful whistleblower cases in which the government declined to intervene, accounting for more than $1.1 billion in recoveries. Among those cases was a $450 million settlement with DaVita Healthcare Partners Inc.
Loucks also highlighted another potential roadblock--the new standard of materiality born out of the Supreme Court’s recent decision regarding implied certification. The focus on materiality could lead to greater discovery regarding internal federal communications since “the government’s actual conduct is relevant to the issue of materiality,” he argues.
Legal experts have previously told FIerceHealthPayer: Antifraud that there may be a spike in cases arguing the definition of “materiality.”
- read the Forbes op-ed