Relating to Your Relator: False Claim Act Follies

The whistleblower under a Federal (and some state) False Claims Act case is called the relator.  Relators, quite often, have intimate knowledge of the particular False Claims Act violations alleged because they played some role in conceiving or implementing the false claims. Nobody said this was going to be pretty.

The Kane v. Healthfirst and U.S. v. Continuum cases caught my eye, however, because the relator was the very employee in Healthfirst's Revenue Cycle Department who was tasked with investigating a 2010 claim by the New York Office of the State Comptroller that a number of claims had been improperly billed, using New York's Medicaid program as a secondary biller to a managed care program involving Healthfirst.  After identifying as many as 900 claims (at a value of over a million dollars), Robert Kane wrote a memo outlining what he had discovered and estimating outside exposure.

And then his employment was terminated.

These very recent cases are important for the light they shed on the "reverse false claims" standard requiring speedy repayment of claims identified as false under something often referred to as "the sixty day rule."  Part of the take away from these cases is that a potentially false claim identified as such — even though not definitively identified as such — is  apparently enough to trigger the sixty day repayment rule. The defendants here took over two years and one set of civil investigative demands to complete their re-payment.  

The recent ruling in these cases is also a wake up call to health care employers who think an adversarial relationship with an employee fulfilling an assignment to scope out the problem and estimate potential liability makes a defense of good faith error and good faith effort to re-pay more credible.

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