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Sharp Rise in False Claims Act Cases - Navigating the FCA Waters

Client Alert
May 5, 2023


The Department of Justice has announced that False Claims Act (FCA) settlements and judgments exceeded $2 billion in the Fiscal Year 2022 and $5.6 billion in the Fiscal Year 2021. A large portion of such settlements and judgments involve healthcare businesses such as physician practices, hospitals, and pharmacies. The number of FCA cases has increased over the past several years, and it is evident that governments on both the state and federal levels are becoming more aggressive in their use of the FCA to obtain recoveries.

The FCA, 31 U.S.C. § 3729 et seq., was enacted in 1863 during the Civil War to counteract fraud by companies selling supplies to the Union Army. War profiteers would swindle the Union Army by providing rotten food, worn-out garments, and defective weapons. Today, the FCA is one of the government's strongest anti-fraud statutes. It imposes liability on individuals and businesses that defraud and cause financial loss to the federal government. The FCA also provides the potential for rewards for whistleblowers who report such fraudulent activities.

FCA claims can also be a source of stress and complication for businesses when they find themselves to be the target of either a federal investigation or state investigation. Whenever there is government money at stake, there is a chance for an FCA claim. Among other industries, FCA investigations are commonly seen among healthcare businesses that bill state and federal healthcare programs, such as Medicare and Medicaid. Since fraud in the healthcare industry can lead to rising healthcare costs, the government is keen on cracking down on such activity.

Recently, on April 18, 2023, the United States Supreme Court heard arguments regarding the FCA’s scienter, or mental state, requirement. To prove violation of the FCA, the statute requires that a defendant “knowingly” file false claims for payment. The term “knowingly” is defined within the statute to mean a person that acts with actual knowledge, deliberate ignorance, or reckless disregard. Circuit courts are split on how to interpret and apply the knowledge element of the FCA, and based on the Supreme Court’s decision, there will be a large impact on healthcare defendants and their businesses as well as anyone who contracts with, or receives money from, a federal program. A broader interpretation of the FCA would unnecessarily target and stifle healthcare, and other businesses, for simple errors in daily operations. This goes against the intended application of the FCA, which was to prevent fraudulent activity.

Violation of the FCA can potentially lead to liability for treble damages, or three times the actual losses, so it is imperative to have the proper legal counsel as you navigate the FCA waters. Whether you are facing allegations of violating the FCA or you want to put in place safeguards to ensure your business does not face such allegations, our team and BMD is ready, willing, and able to help. Our team has experience successfully defending against FCA claims and large qui tam cases, and they would be happy to discuss any concerns you may have. Questions should be directed to Shalini Bhatia at sbhatia@bmdllc.com or 216.658.2214.

FCAHealthcare
Client Alert

Proposed Health Information Privacy Reform Act Expands Protections Beyond HIPAA

January 26, 2026The Health Information Privacy Reform Act (HIPRA) seeks to extend privacy protections to health data not covered under HIPAA, including data collected by apps and wearables. HIPRA introduces broader definitions of protected health information, strengthens privacy and security requirements, establishes patient notification rights, and sets national de-identification standards. Companies processing health data should monitor developments to ensure compliance.Client Alert

Medicare Updates on Skin Substitutes: LCDs Withdrawn, Payment Changes Take Effect

January 23, 2026Medicare’s planned Final Local Coverage Determinations (LCDs) for skin substitutes were withdrawn in late December 2025, meaning previous coverage rules remain in effect. The 2026 Medicare Physician Fee Schedule introduces a single payment rate of approximately $127.14 for these products. Providers should review implications for diabetic foot and venous leg ulcer treatments.Client Alert

Understanding the Seven Core Elements of an Effective Healthcare Compliance Program

January 22, 2026The Affordable Care Act requires healthcare providers participating in Medicare, Medicaid, and CHIP to maintain an effective compliance program. Guidance from the Department of Health and Human Services and the Office of Inspector General outlines seven core elements that form the foundation of these programs, from written policies and compliance oversight to auditing, training, and corrective action. This alert highlights each element and explains how practices can tailor compliance programs to their size and risk profile while meeting federal expectations.Client Alert

Preventing a Board Investigation

January 21, 2026Healthcare professionals in Ohio are subject to licensing board investigations that can lead to disciplinary action. Staying compliant with regulations, documenting carefully, and operating within your professional scope can help prevent issues. If contacted by a board, working with an attorney is critical to protect your license and rights.Client Alert

Ohio Board of Nursing Proposes Rule Changes for Nurses

January 14, 2026On Monday, January 12, 2026, the Ohio Board of Nursing (“BON”) released a package of proposed changes to the Ohio Administrative Code. There are two proposed changes to continuing education requirements that Ohio nurses should be watching.
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