Should the False Claims Act be changed?

Possible changes to the False Claims Act (FCA) animated a congressional hearing last week, as lawmakers heard opposing views on what's been called "the signature anti-fraud weapon of the United States."

David W. Ogden, a former high-level Department of Justice official, told congress one of the FCA's provisions is "completely irrational," The National Law Journal reported. Ogden believes the law relies too much on whistleblower lawsuits and says the government should instead encourage development of corporate compliance programs to fight fraud. Ogden said companies with certified compliance programs that report violations should pay lower FCA damages, according to a Bloomberg BNA blog post.

But Senator Chuck Grassley (R-Iowa) disagrees. "Since many corporate giants already spend large amounts on compliance yet still routinely bilk millions in taxpayer dollars," Grassley testified, "it's hard to imagine how these perks [incentives for state-of-the art compliance programs] would motivate them to stop."  

Whistleblower advocates voice concern about whether debated FCA revisions are "modest changes or all-out assault on the False Claims Act," according to a blog post by the law firm Constantine Cannon. Rather than reward compliance efforts, the firm supports the idea of strengthening the law's deterrence provisions. In line with this, one witness testified that the FCA should hold individuals responsible for fraud, let the government recover attorneys' fees when it wins and make tax fraud actionable under the FCA, the firm noted. 

Healthcare groups nationwide, however, recently asked the U.S. Supreme Court to bar excessive FCA penalties, as FierceHealthcare reported.  

A backdrop for this discussion is the case of "serial whistleblower" William LaCorte, M.D., who raked in $38 million through 12 qui tam lawsuits, according to a Wall Street Journal Pharmalot blog post.

"LaCorte ... is a poster child for a debate over whistleblowing," the WSJ noted. On one hand, a federal prosecutor praised the doctor's "good citizenry" in a case where the government won back $187 million. On the other hand, a judge dismissed one of LaCorte's lawsuits as a "threadbare" rehash of public information, the WSJ reported.

For more:
- here's The National Law Journal article
- read the Bloomberg BNA blog post
- see the Constantine Cannon blog post
- view the WSJ Pharmalot blog post