Big Pharma Loses Battle to Derail False Claims Act

Big pharma and the medical establishment hate the False Claims Act. We don’t think that rank and file physicians oppose the Act, unfortunately it is the dishonest and greedy doctors who seem to get their way. The good news is that they have suffered an embarrassing defeat before the Washington State Legislature.

Washington is one of 31 states and the District of Columbia with a state False Claim Act. Patterned after the federal law, Washington’s version is limited to Medicaid fraud. Still, it is one of the most powerful tools in combatting fraud against the government. Called the Washington Medicaid Fraud False Claims Act, the statute allows private individuals to bring lawsuits against those who defraud taxpayers and the government. Successful whistleblowers are entitled to a percentage of any recovery.

For every dollar the state expends under the Washington Medicaid fraud statute, it gets back three dollars. Enacted in 2012, the law has saved Washingtonians millions of dollars.

When passed, the law was subject to a sunset review. Without legislative action, the law simply dies.

Recently, the Washington Legislature held several hearings about the law. Although almost universally liked, there were a few naysayers. Who spoke out against the law?  The Washington Liability Reform Coalition, Pharmaceutical Research and Manufacturers of America, Washington Defense Trial Lawyers, and the Washington State Medical Association. In other words, there were few surprises.

The Washington Liability Reform Coalition claims to be an advocacy group claiming its mission is, “Stemming the tide of runaway liability costs that stifle economic vitality.” While that sounds like a lofty and worthwhile goal, many of its members have a history of being abysmal corporate citizens. Some of the worst corporate offenders that have been collectively forced to pay hundreds of millions of dollars in False Claims Act penalties are the members of the Coalition.

That makes sense, the frivolous lawsuits they wish to stem are simply lawsuits against them! Ditto for the Pharmaceutical Research and Manufacturers of America. The one surprise is the Washington State Medical Association.

We believe that most doctors are honest, law abiding people. Their goal should be to save lives and eliminate suffering. A few, however, are more interested in how much they can bilk from patients, insurance companies, Medicaid and Medicare. Don’t think that stealing from the latter is a victimless crime. Medicaid and Medicare are supported by tax dollars. Your dollars and mine.

The False Claims Act reauthorization bill is supported by the Attorney General and was introduced with bipartisan support.

During testimony against the bill, lobbyists for big Pharma and big medicine claimed that evidence suggested that whistleblower cases are “frivolous, rarely result in recoveries, and impose significant time and costs on defendants.” They also claim that physicians in small private practices can face “devastating financial consequences” from these cases.

Their evidence? None.

Is there any truth to these allegations? The Legislature’s nonpartisan research office didn’t find any evidence of frivolous lawsuits since the law was passed 4 years ago.

So what is the truth? Despite the hysterical cries from medical and pharmaceutical “deep state,” since Washington’s Medicaid Fraud False Claims Act was enacted in 2012, the state has recovered $72 million. Better yet, because it has a state False Claims Act, Washington’s enforcement costs are partially offset by grants from the federal government.

Medicaid fraud is a growth industry. Despite the best efforts of law enforcement and healthcare auditors, the government can’t be everywhere at once. Insiders – healthcare workers – are the best source of information. The False Claims Act provides powerful financial incentives to step forward and anti-retaliation protections for those who do step forward. Why would anyone want to repeal a law that works?

Most don’t. It appears that those that want to repeal the law are those guilty of violating it!

Without the reauthorization, Washington’s Medicaid Fraud False Claims Act is automatically repealed. Doing nothing means the law is over. The fraudsters win. Patients and taxpayers lose.

Thankfully, the Washington Legislature isn’t easily swayed by the big money special interests. The House vote on final passage was 88 in support and just 8 opposed (Representative Buys, Caldier, Condotta, McCaslin, Schmick, Scott, Shea and Taylor). The Senate vote was even better, the bill passed unanimously. As of this writing, it awaits the governor’s signature.

The battle in Washington state may be over for now but the war continues. Big Pharma and the U.S. Chamber continue to wage war at the national level. There the battle surrounds the federal False Claims Act, a law that helps taxpayers recover billions of dollars each year.

False Claims Act and Whistleblower Awards

The federal False Claims Act and most state acts allow those people with inside or “original source” information to file a lawsuit against wrongdoers. There must be a loss to a federal program or loss of federal dollars. Medicare obviously qualifies at the federal level. State laws typically require a loss to the state. Because Medicaid is funded with state taxes, Medicaid fraud qualifies for state false claims laws.

The lawsuits are filed under seal meaning they are secret while the government investigates. If there is a recovery, whistleblowers – also called relators – are entitled to 15% to 30% of the recovery. Million dollar awards are quite common.

For wrongdoers, the government can collect triple damages and penalties of up to $11,000 per false certification or invoice for payment. Now you understand why the wrongdoers hate the False Claims Act!

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Have information about Medicaid or Medicare fraud? Call us! Our whistleblower lawyers have helped people like you collect over $100 million in whistleblower awards. Unless you file a lawsuit, however, you don’t qualify for these awards.

For more information, contact attorney Brian Mahany at or by telephone at (414) 704-6731 (direct). All inquiries are protected by the attorney -client privilege and kept strictly confidential. You can also visit our Medicare fraud information page. Live in Washington? Check out our Washington Whistleblower Information page too.

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