The Role of Whistleblowers in Qui Tam Lawsuits
A whistleblower of qui tam relator is someone who is aware of actions by their company intended to defraud the government and report what they know by filing a lawsuit under the False Claims Act. Under the False Claim Act, anyone who intentionally submits a false claim or causes someone else to submit a false claim to the government for a payment can be liable for as much as three times the amount they defrauded the government.
This is a significant risk to the company, so it is in their best interest to prevent people from becoming whistleblowers. This often leads to retaliation or threats of retaliation on the person coming forward as a whistleblower. Whistleblower retaliation may include getting demoted, written up for frivolous things, or fired. It may also include various forms of intimidation from supervisors or coworkers. In some cases, there is an organized effort within the company to intimidate the suspected whistleblower.
Qui tam lawsuits are very complex and can take months if not years to settle. This creates a long and stressful process for the relator. However, if the lawsuit is successful, the payout can be significant. The relator can receive 15 to 30% of the money recovered through the lawsuit.
When considering your options as a relator, it is essential to get all the evidence you will need before filing. Once people find out what is happening, your access to needed information may get blocked. It is also important to find a whistleblower lawyer that is not only well versed in False Claims Act cases, but also in retaliation.
While whistleblower information is supposed to remain confidential, once a business knows they are being investigated, it is nearly impossible to know for sure what information will surface or what will happen. A law firm that understands the laws regarding what constitutes retaliation and what an individual’s rights are in that situation will help protect you through a potential intimidating and scary process.
In 2005, qui tam lawsuits were filed against Kyphon for fraudulent claims to Medicare. One of the whistleblowers, in this case, left the company before his role in the lawsuit was made public, however, he still experienced intimidation from former co-workers. One co-worker went so far as to show up at his house and physically assault him during the course of an argument. This illustrates the need for whistleblower protection throughout the qui tam lawsuit procedure.
That particular lawsuit resulted in a $75 million settlement. For years, Kyphon was incorrectly instructing hospitals to file their back pain procedure as an inpatient procedure when it was actually an outpatient procedure. The difference in cost to Medicare between inpatient and outpatient was $9,000 per patient. There was more than one whistleblower in that case, but they shared roughly $15 million of the total settlement.
The Kyphon case went on for over two years. Qui tam lawsuits are so complex, they are often very drawn out. Whistleblowers need to understand going into the process that it is not a fast or overnight deal. They will need to be actively involved in the case and ready to testify if and when it eventually goes to court. Additionally, a payout if not guaranteed. There are plenty of cases where a qui tam case is filed but the company either wins the case or the evidence is not sufficient enough to take it to trial.
As mentioned earlier and made clear with the example of the Kyphon case, settlements in qui tam lawsuits are very costly. In addition to the financial cost, these cases can permanently damage the reputation of a company. For some, it may be enough to put the company out of business.
Despite the time and potential frustration, stepping forward as a whistleblower is an opportunity to make a wrong right. There are so many situations where large companies get away with things that are clearly unethical and there is nothing you can do to stop them. Being a whistleblower is an opportunity to stop a company whose actions are hurting others.
