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Whistleblowers, Qui Tam, Fraud and the False Claims Act Explained

What is a Whistle Blower?

A whistle blower is an individual who discloses information about possible corrupt or illegal activities such as fraud that are occurring in a company. There are many different people who can be whistle blowers including employees, contractors, and clients.

When someone files a claim under the false claims act, the stark statute, or the anti-kickback statute, that individual is “whistleblowing.â€

Whistleblowers can also be referred to as “relators.â€

What is the False Claims Act?

The false claims act is a federal statute. This statute prohibits individuals and business entities that contract with and are paid by the United States Government (directly or indirectly) from defrauding the Government by presenting false claims for payment.

Business entities and individuals incur liability under the false claims act when they knowingly submit a false (or fraudulent) claim to the United States Government with the intent to receive payment from the government for the false or fraudulent claim.

Individuals and business entities who violate the false claims act can face criminal and civil liability for their actions. As a result, this statute has been one of the most successful weapons that the government has to fight against fraud.

What is a Qui Tam Lawsuit?

The term qui tam lawsuit is short for the Latin phrase “qui tam pro domino rege quam pro se ipso in hac parte sequitur†which means “he who sues in this matter for the king as well as for himself.â€

Qui tam lawsuits are a way for whistle blowers to assist the government in ending different types of fraud.

The qui tam lawsuit is a civil lawsuit that is brought under the qui tam provision of the false claims act. Basically, individuals bring qui tam lawsuits to recover money from a company or individual who has defrauded the government.

Whistle blowers bring these lawsuits because they are rewarded with monetary compensation if the government recovers any money from the suit. Whistle blowers receive a percentage of the money that the government recovers in a qui tam lawsuit (generally 15%- 30%).

What is the process of a Qui Tam Lawsuit?

First, the plaintiff(s) (whistle blowers or relators) file a complaint against the company or the individuals who are violating the false claims act. Then the government must determine whether it will pursue the case. During this time, the identity of the individual is protected because the case is filed under the seal of the court.

This means that the public will not be able to know the identity of the whistleblower.

If the government finds merit in the complaint, the government will intervene in the suit. The government decides whether it believes that there is merit to the whistleblowers allegations. If the government intervenes new causes of actions, (such Anti-kickback claims) can be added to the lawsuit.

If the government decides not to intervene, the whistleblower can continue on their own without government assistance.

At this point, a lot of companies choose to settle in order to avoid costly litigation fees. If the case settles the whistle blower is rewarded part of the settlement.

If the case does not settle, it will proceed to trial.

If the finder of fact (the judge or jury) determines that the individual or company is liable the government will recover from the individual or the company.

Remember that the whistle blower is entitled to 15%-30% of the recovery that the government receives in a qui tam lawsuit.

What is the Anti-Kickback Statute?

The Anti-Kickback statue is another federal fraud statute. This statute prohibits medical care providers from inducing someone to refer an individual to their facility and from rewarding someone for referring individuals to their medical care facility. This statute governs referrals from anyone for any item or service that generals federal health care business.

Recently, Walgreens settled a claim that it violated the anti-kickback statute for $50 million. Walgreens was accused of giving discounts to Medicare and Medicaid patients if they filled their prescriptions at Walgreens.

An El Paso Hospital paid the government $860K to settle anti-kickback claims after the hospital was accused of paying kickbacks to a physician.

What is the Stark Statute?

The stark statute prohibits physicians from referring Medicare patients to a provider that the physician has a financial interest in. The stark statute also prohibits physicians from referring Medicare patients to service providers that relatives have a financial interest in.

What is Medicare Fraud?

One of the types of fraud that whistle blowers can help catch is medicate fraud.

Simply put, Medicare fraud occurs when a medical provider bills the government for Medicare services or supplies that the medical provider did not perform or distribute.

Medicare fraud is a type of fraud that is covered by the false claims act, and whistleblowers can report Medicare fraud.

There are many different things that medical providers could do that would constitute Medicare fraud.

If you believe that you have been the victim of Medicare fraud you should discuss your situation with a lawyer. Your lawyer will be able to help you take the next step to report Medicare fraud if it is occurring.

Medicare fraud is a very serious problem and new schemes to defraud the government are discovered often.

In fact, a few days ago a dentist from Georgia was sentenced to one and a half years in prison for participating in a Medicaid fraud scheme. Unfortunately, this is not a single occurrence. This is why it is so important for whistleblowers to report Medicare fraud.


Whistleblowers help the government recover money that was wrongfully paid to people who were engaged in fraud. When whistle blowers bring qui tam lawsuits under the false claims act against individuals who violate the false claims act they are assisting the government detect and prevent fraud. Thus, whistleblowers serve an important function in the legal system.

If you have any questions about this article contact the lawyers at Stoy Law Group, PLLC. We offer free case consultations for individuals who want to determine what their legal rights are.