MEDICARE FRAUD: Judges Say ‘Whistle-Blower’ Suits Illegal
A panel of appellate court judges has declared unconstitutional the federal law that allows uninjured employees to file suit on behalf of the U.S. government if they think their employer is guilty of fraud, the Houston Chronicle reports. If the decision is upheld when heard by the entire 5th U.S. Circuit Court of Appeals in January, it would place the burden of fighting fraud squarely on the government, which could have a major impact on hospitals and other companies that receive federal funds, experts say. Judges ruled that the law usurps government's 'prosecutorial discretion.' The verdict came in a case involving a lawsuit filed by a nurse at Houston's St. Luke's Episcopal Hospital, which alleged that hospital staff defrauded Medicare by admitting patients unnecessarily and prematurely placing certain patients in intensive care units to justify higher billing rates.
Q is for Questionable
The judges declared that a provision of the 1863 False Claims Act called a qui tam -- which allows an uninjured "whistle-blower" to file suit and to claim up to 25% of any funds recovered, regardless of whether the government chooses to join the legal action -- infringes on the prosecutorial power of the executive branch of government because it allows suits to proceed on the government's behalf even if the attorney general determines such action to be counter to the government's interests. The ruling upheld the dismissal of the case in 1997 by a U.S. district judge, who said that Congress may not give an uninjured party the right to file suit nor to collect damages.
Attorneys said that a pending qui tam suit against the Montgomery County Hospital District might be dismissed if the ruling is upheld. Meanwhile, experts disagree on the decision's implications. One legal scholar said the judges' ruling means that "whistle-blower" suits may still be filed, but will be dismissed if the government declines to join the action. An attorney for one Houston hospital, however, went farther, saying the ruling means that "every single qui tam case in which the government intervenes should be dismissed." The argument may be decided by the nation's highest judicial authority: Experts say the case is "ripe" for Supreme Court review (Tedford, 11/18).