The false claims act and its impact on medical practices

A lawsuit under the federal False Claims Act can threaten the survival of a medical practice. The Act prohibits a range of misconduct involving the submission of false claims to the government, as well as the knowing and improper retention of overpayments of government funds. Violations of the Act result in liability for treble damages and civil penalties of as much as $11,000 per violation. Although the Act imposes liability only on persons who act "knowingly," the "knowing" requirement is met if the person acts with deliberate ignorance or reckless disregard of the circumstances. The Act contains a "qui tam provision under which a whistleblower, acting on behalf of the government, may file suit to enforce the Act's terms, and if the lawsuit is successful, can receive a substantial percentage of the government's recovery.