Government Has Broad Right To Dismiss False Claims Act Cases: One useful and effective avenue to recover money erroneously spent by the U.S. government on fraudulent health care claims has been the False Claims Act, which allows lawsuits to be filed by whistleblowers under its qui tam provisions. Under those provisions, a private party can file an action on behalf of the government and share in any recovery. That incentive has resulted in the U.S. recovering billions of dollars of fraudulent health care payments.
False Claims Act
The False Claims Act (FCA) imposes civil liability on any person who presents false or fraudulent claims for payment to the Federal Government. 31 U. S. C. §§3729–3733. The statute is unusual in authorizing private parties (known as relators) to sue on the Government’s behalf. Those suits—qui tam actions—are “brought in the name of the
Government.” §3730(b)(1). And the injury they assert is to the Government alone. But in one sense, a qui tam suit is “for” the relator as well as the Government: If the action leads to a recovery, the relator may receive up to 30% of the total. §§3730(b)(1), (d)(1)–(2).
Because a relator is no ordinary plaintiff, he is subject to special restrictions. He must file his complaint under seal and serve a copy and supporting evidence on the Government. §3730(b)(2). The Government then has 60 days (often extended for “good cause”) to decide whether to “intervene and proceed with the action.” §§3730(b)(2)–(3). If the Government elects to intervene during that so-called seal period, the action “shall be conducted by the Government”; otherwise, the relator gets “the right to conduct the action.” §§3730(b)(4)(A)–(B). But even if the Government passes on intervention, it remains a “real party in interest,” and it retains continuing rights. The Government can intervene after the seal period ends, so long as it shows good cause to do so.
In a False Claims Act case decided by the United States Supreme Court on June 16, 2023, the issue was whether the Government, if it has declined to intervene during the seal period, retains yet another right: the right to dismiss a qui tam action over the relator’s objection. In the case before the Supreme Court, the relator—petitioner Jesse Polansky—filed a qui tam action alleging that respondent Executive Health Resources helped hospitals overbill Medicare. The Government declined to intervene during the seal period, and the case spent years in discovery. Eventually, the Government decided that the varied burdens of the suit outweighed its potential value, so it filed a motion under §3730(c)(2)(A) (Subparagraph (2)(A) for short), which provides that “[t]he Government may dismiss the action notwithstanding the objections of the [relator],” so long as the relator received notice and an opportunity for a hearing. The District Court granted the request, finding that the Government had thoroughly investigated the costs and benefits and come to a valid conclusion.
The United States Supreme Court held that the Government may move to dismiss an FCA action under §3730(c)(2)(A) whenever it has intervened—whether during the seal period or later on. The Supreme Court further held that in assessing a motion to dismiss an FCA action over a relator’s objection, district courts should apply the rule generally governing voluntary dismissal of suits in ordinary civil litigation—Rule 41(a). The application of Rule 41 in the FCA context will differ in two ways from the norm. First, the FCA requires notice and an opportunity for a hearing before
a Subparagraph (2)(A) dismissal can take place. Second, in the FCA context, the set of interests the court should consider in ruling on a post-answer motion is more likely to include the relator’s, as the relator may have committed substantial resources to the action. In the case the Supreme Court was deciding, the Supreme Court held that the Government gave good grounds for thinking that this suit would not do what all qui tam actions are supposed to do: vindicate the Government’s interests. Absent some extraordinary circumstance, that sort of showing is all that is needed for the Government to prevail on a motion to dismiss.
Source United States ex rel. Polansky v. Executive Health Resources, Inc., No. 21–1052.
If you have information regarding false claims having been submitted to Medicare, Medicaid, TRICARE, other federal health care programs, or to other federal agencies/programs, and the information is not publicly known and no actions have been taken by the government with regard to recovering the false claims, you should promptly consult with a False Claims Act attorney (also known as qui tam attorneys) in your U.S. state who may investigate the basis of your False Claims Act allegations and who may also assist you in bringing a qui tam lawsuit on behalf of the United States, if appropriate, for which you may be entitled to receive a portion of the recovery received by the U.S. government.
Visit our website or call us toll-free in the United States at 800-295-3959 to be connected with qui tam lawyers (False Claims Act lawyers) in your U.S. state who may assist you with a False Claims Act lawsuit.
Turn to us when you don’t know where to turn.