False Claims Act Update & Alert

  

Taxpayers Against Fraud Education Fund | Washington, D.C. | WWW.TAF.ORG
June 28, 2005

  
   

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CONTACT:  James Moorman, TAF, 202-296-4826 ext 22
                Patrick Burns, 202-833-8877 ext. 24
 

Fighting Medicaid Fraud
by Drug Manufacturers

  • 150 drug fraud cases are backed up at the U.S. Department of Justice.  These 150 cases represent nearly 500 drugs under investigation for fraud.
     

  • The 10 cases settled so far under the False Claims Act, have returned $2.5 billion to the U.S. Treasury

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In testimony before the Senate Finance Committee, James Moorman, President of Taxpayers Against Fraud, called for Congress to embrace a three-step plan to expedite Medicaid fraud cases against drug makers that are now backlogged at the U.S. Department of Justice.
 

  • Step One:  Take action to enhance the resources devoted to the False Claims Act litigation.  Moorman notes that "$354 million is now provided each year to DoJ and HHS under the Health Care Fraud and Abuse Control (HCFAC) program" but that the Civil Division at DoJ spent only $18 million supporting False Claims Act litigation in FY 2003, while the U.S. Attorney's spent $30 million, and the Office of the Inspector General at HHS spent about $10 million.  In short, only a small portion of the money available to fight health care fraud is being used to support False Claims Act cases.

     
  • Step Two:  Firms receiving large amounts of federal Medicaid or Medicare funds should be required to provide basic information about the False Claims Act to their employees.  Moorman notes that simply by informing employees of their right to bring a False Claims Act lawsuit, a great deal of fraud can be deterred.  "When employees understand that the submission of false or fraudulent claims to the federal government is against the law, and that violation of the law gives rise to civil liability for their employer, they will be less likely to engage in such conduct or to tolerate such conduct by other employees."

     
  • Step Three:  The Medicaid statute should be amended to require all states, as a condition of receiving federal Medicaid matching funds, put in place their own false claims acts with whistleblower provisions.  Moorman notes that while 13 states and the District of Columbia have embraced their own versions of the False Claims Act, most states remain absent without leave when it comes to fighting Medicaid fraud.

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 To read James Moorman's complete testimony >> click here