WLC attorney Erica Blachman Hitchings was a featured guest at the National Whistleblower Center’s 2022 False Claims Act Celebration. Erica joined NWC Executive Director Siri Nelson, The Anti-Fraud Coalition (TAF) CEO and President Jeb White, and David Colapinto of Kohn, Kohn, & Colapinto in the discussion. This group of False Claims Act experts tackled a variety of subjects, ranging from the post-Escobar landscape, the recently proposed (and welcomed) amendments to the FCA, and challenges that they see on the horizon. Each panelist also spoke on a more personal level, sharing particular cases that had a lasting impact on themselves and others. They also each spoke to the respect they have for their courageous whistleblower clients. The event was capped off with a keynote from Senator Charles Grassley (R-IA), a longtime advocate for the False Claims Act.
The Power of the FCA to Fight Elder Abuse
The moderator asked each panelist to share a case from their career that demonstrated the value and power of the FCA. Erica spoke about her experience as a government attorney pursuing allegations of fraud by a nationwide skilled nursing home chain. Erica and the government team ultimately settled the matter as part of a $53.6 million resolution.
But the financial recovery, while significant, was not what Erica highlighted. Instead, she shared what motivated her: putting an end to an alleged practice that placed profit above patient care.
Profit over patient care is a practice we see all too often. And it is particularly egregious when perpetrated against patients who are especially vulnerable to abuse. It is thus no surprise that nursing homes, hospice providers, and home health care companies have been (and will continue to be) under great scrutiny from law enforcement. As one Department of Justice official put it:
[The] Department’s emphasis on nursing homes stems from the basic principle that there is no better use of our resources than to protect some of our most vulnerable citizens. Nursing home residents are frequently unable to voice medical needs and may lack effective advocates, such as family members or other caregivers, to speak up when they receive poor, non-existent, or unnecessary care.
The Clash Between the Realities of Our Healthcare System & Defendants’ Materiality Arguments
False Claims Act experts have debated the element of materiality for years, particularly after the 2016 Supreme Court Escobar decision. The False Claims Act requires that any fraud or misstatement must be material — or important enough to matter — in order for the law to apply. That is, it must be significant enough to (potentially) influence the government’s decision. Given this, defendants sometimes argue that if the government pays a claim once on notice of the allegations of fraud, there is no liability under the FCA.
Erica provided the audience with a practical rebuttal to this defense position. The following explanation is one which she and WLC attorney Bob Thomas have shared with the students in their Health Care Fraud and Abuse seminar at Boston University School of Law.
Congress and federal agencies must play an incredible balancing act when it comes to Medicare, Medicaid, and other federal health care programs. If they try to review every claim for fraud, the American health care system grinds to a halt. And real Americans are harmed in the process. If doctors and hospitals are not paid on time, patients will not be seen. In addition, the government may recognize an actual fraud occurring in one part a healthcare organization. But if that organization is a rural hospital or a federally qualified health care center, there are often no alternative providers in the area. Again, if the government abruptly cut off payment, the patients are the ones who would suffer.
So, instead the government follows the “pay and chase” model. It keeps the system running, but is susceptible to fraud.
That is where the False Claims Act comes into play; it expands the government’s ability to fight this fraud. A robust and effective False Claims Act is thus a true necessity.
