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Whistleblowers (Qui Tam)


The Federal False Claims Act (FCA) creates civil liability for false or fraudulent claims presented to State Medicaid programs by participating providers and others.  The statute authorizes triple damages and a penalty ranging from $5,500—11,000 per claim for anyone who knowingly submits or causes the submission of a false or fraudulent claim to the United States.  In the healthcare context where a provider, insurer or pharmaceutical company often submits (or causes the submission of) hundreds, if not thousands, of claims, the financial implications of liability under the FCA can be staggering.  To incentivize individuals to come forward with allegations of violations under the FCA without fear of reprisal, the FCA entitles these individuals, often called whistleblowers, to a specified percentage of the proceeds of the action or settlement.


The Federal False Claims Act (FCA) creates civil liability for false or fraudulent claims presented to State Medicaid programs by participating providers and others.  31 U.S.C. §§ 3729-3733.  The FCA includes an ancient legal device called a qui tam provision which allows a private person, known as a “relator” though more commonly referred to as a “whistleblower,” to bring a lawsuit on behalf of the United States where the whistleblower has information that the defendant(s) knowingly submitted or caused the submission of false or fraudulent claims to the United States.  31 U.S.C. § 3730(b). 

The FCA provides for a highly detailed process by which qui tam claims must be filed and pursued.  The whistleblower must file the qui tam complaint under seal with the Clerk of the Court and must give copies to the United States Department of Justice (DOJ) and local United States Attorney.  31 U.S.C. § 3730(b)(2).  Additionally, the whistleblower must serve upon the DOJ a “disclosure statement” that contains all of the evidence in the whistleblower’s possession regarding the allegations set forth in the complaint.  Id.  The complaint, and all related filings, remain under seal for sixty (60) days.  At the conclusion of the sixty (60) day period, the DOJ may elect to intervene and proceed with the action.  The DOJ may also request that the complaint remain under seal by filing a motion with the District judge showing “good cause” for the extension of the seal.  31 U.S.C. § 3730(b)(3). 

Under the FCA, the Attorney General (or a DOJ attorney) must “diligently” investigate any alleged FCA violation.  31 U.S.C. § 3730(a).  At the conclusion of the investigation and before the expiration of the sixty (60) day period, or any extensions, the DOJ must either: (1) intervene as a plaintiff in one or more counts of the pending qui tam action; (2) decline to intervene in one or all counts; or (3) move to dismiss the whistleblower’s complaint.  Importantly, if the DOJ declines to intervene, the whistleblower may proceed with the action on behalf of the United States.

The amount of the award to which a whistleblower is entitled depends, by statute, on the DOJ’s decision to intervene.  If the DOJ elects to intervene, the whistleblower is entitled to fifteen to twenty-five percent (15-25%) of the recovery or settlement, depending on the extent to which the whistleblower “substantially contributed” to the prosecution.  31 U.S.C. § 3730(d)(1).  Where the action is one which the court finds to be based primarily on disclosures of specific information, rather than information provided by the whistleblower, the court may award a sum it considers appropriate, but in no case more than ten percent (10%) of the proceeds.  If the DOJ declines to intervene, the whistleblower is entitled to twenty-five to thirty percent (25-30%) of the proceeds or settlement, as determined by the court.  31 U.S.C. § 3730(d)(2).  Regardless of whether or not the DOJ intervenes, the whistleblower is entitled to reasonable expenses, including attorneys’ fees and costs, all of which are awarded against the defendant.  However, if the DOJ declines to intervene, the court may award reasonable attorneys’ fees and costs to the defendant if the court determines the whistleblower’s claim to be “clearly frivolous, clearly vexatious, or brought primarily for purposes of harassment.”  31 U.S.C. § 3720(d)(4).

If the court finds that the whistleblower planned and initiated a violation of the FCA, the court may, whether the DOJ intervenes or not, reduce the whistleblower’s share of the proceeds to the extent it considers appropriate.  31 U.S.C. § 3720(d)(3).  If the whistleblower is convicted of criminal conduct arising from his or her role in the violation of the FCA, the whistleblower shall be dismissed from the action and shall not receive any share of the proceeds.  Id. 

If the DOJ elects to intervene, a decision that typically requires approval from the head office in Washington, D.C., the DOJ files a notice of intervention and a motion to unseal both the qui tam complaint and the notice of intervention.  A decision to intervene is not tantamount to a wholesale endorsement of the whistleblower’s allegations or legal conclusions.  Rather, the DOJ often files its own complaint setting forth a statement of the facts and the specific relief sought.  Once the complaint is unsealed, the whistleblower has one hundred and twenty (120) days under the Federal Rules of Civil Procedure in which to serve the complaint on each named defendant. 

The FCA protects whistleblowers from retaliatory action by their employer.  Indeed, any employee who is “discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against” by his or her employer because of lawful acts done by the employee in furtherance of a qui tam action, shall be entitled to all relief necessary to “make the employee whole.”  1 U.S.C. § 3720(h).  Such relief shall include: reinstatement with the same seniority status; two (2) times the amount of back pay plus interest; and compensation for any special damages sustained, including litigation costs and reasonable attorneys’ fees.  Id.

Agency Guidance

Rules and requirements regarding the process by which a whistleblower must file and pursue a claim are set forth in statute as part of the FCA.  However, the OIG regularly publishes information about qui tam lawsuits, once settled or otherwise resolved, on its website:

Future Direction

It appears that the qui tam process will remain a compelling avenue by which individuals allege a violation of the FCA and, in certain circumstances, are handsomely rewarded for those efforts.  Between 1987 and 2005, health care fraud cases constituted nearly one-half of all qui tam actions filed, with total recoveries of more than $5 billion—more than all other types of fraud alleged under the FCA, combined.  See Letter from Laurie E. Ekstrand, Director, Homeland Security and Justice, United States Government Accountability Office to U.S. Congress, January 31, 2006.  Whistleblowers’ recoveries totaled more than $800 million during that same period, with a median recovery of $150,000 in each qui tam health care case.  Id.


The FCA’s qui tam long-standing provisions are designed to encourage individuals to come forward to identify and disclose fraud that is being or has been perpetrated against the Government by federal contractors.  In the health care arena where a single contractor may be filing hundreds, if not thousands, of claims with the Government, the qui tam provisions become a highly lucrative way for whistleblowers to allege violations of the FCA.  As a result, an entire cottage industry has been built in which attorneys seek out potential whistleblowers to make such allegations.


AHLA would like to thank Auburn K. Daily for drafting this article.