False Claims Act (FCA)

One of the most important laws in the fight against healthcare fraud is the False Claims Act (FCA). The FCA was originally passed in 1863 to combat fraud against the Union Army during the Civil War, when unscrupulous contractors were selling defective goods to the government.

Today, the FCA is the primary legal tool used to hold individuals and corporations accountable for defrauding federal programs. In the healthcare context, this means fraud involving Medicare, Medicaid, or other government-funded health initiatives. Common violations include submitting bills for services never performed, inflating charges (a practice known as “upcoding”), or paying illegal kickbacks to secure patient referrals.

The FCA is unique because of its qui tam provisions, which allow private citizens — whistleblowers — to file lawsuits on behalf of the government. These cases are initially filed under seal, giving the Department of Justice (DOJ) time to investigate. If successful, the whistleblower may receive a share of the recovered funds, usually ranging from 15% to 30%.

Over the years, amendments have strengthened the FCA, particularly in 1986, which made it easier for whistleblowers to pursue cases and harder for corporations to avoid liability. As a result, billions of dollars have been returned to taxpayers, much of it from healthcare-related fraud.

From our perspective at Barrett Johnston, the FCA isn’t just a law — it’s a safeguard for patients and taxpayers alike. It empowers individuals to challenge fraud that undermines trust in healthcare. If you are a healthcare worker, patient, or employee who has witnessed suspicious billing or misconduct, understanding the FCA is crucial to knowing your rights and options.