Government says number of qui tam relators is ebbing

Health care attorneys say whistle-blowers are losing ground

Make no mistake, the False Claims Act still is the 800-pound gorilla of health care anti-fraud efforts. Judgements and settlements in health care fraud cases exceeded $1.2 billion in 2001 and amount to more than $850 million so far this year.

Nevertheless, the number of qui tam relators is dwindling steadily, and some in the health care community maintain whistle-blowers actually are losing ground.

"While the number of annual qui tam filings remains significant, we are seeing a plateau in the number filed each year," says Robert McCallum, assistant attorney general in the civil division of the U.S. Department of Justice (DOJ).

He says the boom in the filing of new qui tam cases peaked in the late 1990s and continues to taper off.

In fact, the total number has declined steadily from a high of 533 in 1997 to 300 last year, which may reflect the impact of compliance programs, he adds.

"I don’t really know how to explain the downturn," McCallum recently told a joint American Health Lawyers Association/Health Care Compliance Association conference in Washington, DC.

He points out that many of the cases filed last year still are under investigation and says it is too early to determine whether the decline indicates greater care by relators’ counsel in choosing which cases to bring.

If that is the case, McCallum says this could result in the government’s intervention in a higher percentage of cases. He notes that while the government has intervened in roughly 20% of cases, very few of the 80% that are declined produce large settlements.

"The vast majority yield modest or no recoveries at all," says McCallum, "and the merits of many of those declined cases has been questionable."

Health care attorney Karen Guarino of King and Spaulding in Atlanta contends that whistle-blowers are, in fact, losing ground. She says the fact that the government is moving to more creative theories to bring False Claims Act cases supports what she has heard from FBI agents and DOJ that the "low-hanging fruit" has all been picked.

"The obvious fraud cases have been brought," asserts Guarino. "The very high-dollar cases have been settled." She says the cases she now sees come down to either very sophisticated fraud theories or "meritless cases brought by opportunistic whistle-blowers apparently viewing the False Claims Act as a lottery game."

"Not only has the low-hanging fruit been picked," argues health care fraud and abuse attorney Robert Griffith of Boston, "the next level of fruit is more than likely beyond the grasp of the False Claims statute. Most of the statutes addressing health care fraud and abuse do not reach the alleged fruit in the top branches."

Griffith says the government’s efforts to eliminate waste should focus on a full review of existing policies with an eye toward increasing the clarity of existing regulatory language.

"For too long, the government has been a shepherd of the Medicare flock who left all the work to the sheep dogs or carriers," he maintains. "It is time for the government to examine its own complicity in a system that is more rampant with waste and lack of oversight than actual fraud," he adds. "Qui tam relators cannot help in that arena."

McCallum agrees that the government is witnessing an increasing complexity in the types of cases filed. For example, he says the government is deeply involved in complex areas including cost report fraud, drug pricing issues, and Medicare carrier fraud.

"We continue to investigate pharmaceutical companies for violations of the Medicare rebate statute," he reports. "We are also dedicated to pursuing allegations of fraud by the Medicare program’s carriers and fiscal intermediaries that contract with HHS to process and audit Medicare claims."

McCallum says DOJ is fully also committed to working with HHS on failure of care cases, especially those that result in death or injury of nursing home patients. 

According to McCallum, the bottom line is that the information received from qui tam relators is critical to rooting out fraud. He says their unique position often makes them an invaluable resource. As the government addresses more complex fraud theories, this is certain to continue, he maintains.

"The False Claims Act is still the 800-pound gorilla, but it is climbing down out of the tree more selectively," says qui tam attorney Mark Kleiman in Los Angeles.

"There are a number of [U.S. Attorneys] offices that have upfront economic criteria," he explains. "They are not going to look at a case where you don't have a fairly significant amount of single damages."