Time Limits are Set for False Claims Act Lawsuits
October 11th, 2016
The U.S. Supreme Court recently ruled on a case that may allow hospitals and other healthcare organizations to breathe a little easier.
The court ruled that the statute of limitations is not suspended for certain fraud laws. This would prevent hospitals from trying to defend very old claims. The court overturned the section of the False Claims Act that applied to civil action under the Wartime Suspension of Limitation Act, which was passed to suspend the time period for suing for fraud perpetrated against the federal government. This act will still apply to criminal actions.
This case may lead to more criminal cases but the burden of proof is much higher in criminal actions.
In the case at bar, a qui tam whistleblower claim has been dismissed because an earlier lawsuit had been filed by someone else with the same claim. The claim involved an allegation of fraudulently billing the government for water purification services during the war in Iraq in 2005.
The time frame for bring a false claims suit must be six years from the date of the violation or three years from the date of discovery. However, it must be discovered within 10 years of the violation. Prior to this case, the time period was suspended.
Despite the ruling in the case, it is important to note that the Federal false claims cases show no sign of changes in litigating qui tam whistleblower cases. Also, this case did not involve hospitals or healthcare but the decision applies to cases filed against them.
You can read the Kellogg Brown & Root Servs., Inc. v. United States ex rel. Carter case here.