The Chamber of Commerce has commenced a well-financed and aggressive lobbying campaign to undermine America’s most effective whistleblower law, the False Claims Act. To justify its anti-whistleblower campaign the Chamber published a report entitled, “Fixing the False Claims Act: the Case For Compliance-Focused Reforms.” The purpose of this blog series is to combat the Chamber’s misinformation, and explain why the False Claims Act must be protected.

Whistleblowers and their supporters are strongly urged to read this blog series and share it with friends. In addition, an Action Alert has been issued by the National Whistleblower Center so members of the public inform their representatives that the False Claims Act should not be “reformed” as proposed by the Chamber.

Fact Number 19:

The Chamber argued on page 16 of their report that “under the current FCA a qui tam plaintiff who files suit after the defendant has already disclosed the same conduct to an agency Inspector General is entitled to proceed with the suit and receive a full bounty.” 

This argument is false and very misleading.  In Endnote 43, the Chamber cites to the case of U.S. ex rel Spay v. CVS, 913 F.Supp.2d 125 (E.D. Penn. 2012) to support this position.

This case, however, fully explains the absurdity of the Chamber’s argument.  In CVS, the company produced “data” to the government that would later be used to demonstrate Medicare fraud.  The data itself was meaningless.  However, the whistleblower performed an audit based on the data.  The audit documented six areas in which CVS had “illegally” submitted drug claims to Medicare for payment, including selling expired drugs, overcharging the government, paying for drugs prescribed by “doctors” with false identities, and billing the government for drugs sold over approved limits.

The whistleblower’s audit uncovered 48,702 instances of CVS “fraudulently” billing the government and getting payment.  The case concerned CVS’ “regular and knowing” submission of “false or fraudulent” claims.  Moreover, it alleged that CVS “intentionally and fraudulently thwarted” the mandatory anti-fraud program.

Before the Court, CVS raised the same argument as the Chamber now raises before Congress in its report.  The argument was rebuffed as completely frivolous.

The district court judge explained:  “To now accept Defendants’ theory would mean that by their very act of submitting their allegedly false claim via the PDE reports, Defendants have effectively shielded themselves from FCA liability. . .  This clearly cannot be the correct result.

Under the Chamber’s proposed “reform,” submitting a false claim to the government can result in immunity from liability.