Annals of Health Law
READY OR NOT
IV. THE FALSE CLAIMS ACT AND VALUE BASED PURCHASING
A. The Evolution of the FCA
The Civil False Claims Act prohibits the submission of false claims for
payment where federal funds are involved. 117 Congress enacted the federal
FCA in 1863 to respond to abuse of federally funded programs in the Civil
War reconstruction era. 118 The Act witnessed a resurgence of popularity
and strength as a result of amendments in 1986, 119 and by the early 1990s,
the FCA had become the primary enforcement tool used by the federal
government to combat fraud, waste, and abuse in federal healthcare
The FCA imposes civil liability on any person who knowingly submits,
or causes to be submitted, a false or fraudulent claim to the Federal
Government. 121 The “knowing” standard expressly set forth in this
provision assures the statute of its broad reach as it encompasses acting in
“deliberate ignorance” or “reckless disregard” of the truth as related to the
fraudulent claim; 122 moreover, specific intent to defraud is not required. 123
In 2009, the Federal Enforcement Recovery Act124 (FERA) amended the
FCA to include a significant expansion of the FCA’s liability provisions. 125
117. False Claims Act, 31 U.S. C. §§ 3729-3733 (2006).
118. See CHARLES DOYLE, QUI TAM: THE FALSE CLAIMS ACT AND RELATED FEDERAL
STATUTES 5 (2009), available at http://www.fas.org/sgp/crs/misc/R40785.pdf.
119. The 1986 amendments lowered the standards for intent and burden of proof
required to establish liability, enhanced whistleblower incentives, and increased damages
and penalties. See, e.g., Rhoad, supra note 91, at 15.
120. See, e.g., id.; see also Dave Nadler, supra note 91. There is also a criminal False
Claims Act, 18 U.S. C. § 287, with penalties including fines, imprisonment, or both.
Moreover, there is a Criminal Health Care Fraud Statute, 18 U.S. C. § 1347, which prohibits
knowingly and willfully executing, or attempting to execute, a scheme or artifice to defraud
any health care benefit program; or to obtain (by means of false or fraudulent pretenses,
representations, or promises) any of the money or property owned by, or under the custody
or control of, any health care benefit program in connection with the delivery of or payment
for health care benefits, items, or services. Proof of actual knowledge or specific intent to
violate the law is not required. Penalties for violating the Criminal Health Care Fraud Statute
may include fines, imprisonment, or both. It should also be noted that the OIG has authority
under 42 U.S. C. § 1320 a- 7, to impose exclusions from participation in all Federal health
care programs on health care providers and suppliers who have been convicted of Medicare
fraud. See generally CTRS. FOR MEDICARE & MEDICAID SERVS., MEDICARE FRAUD & ABUSE:
PREVENTION, DETECTION, AND REPORTING (2011), available at http://www.cms.gov/
121. 31 U.S. C. § 3729(a).
122. 31 U.S. C. § 3729(b).
123. See 31 U.S. C. § 3729(a)( 1)( B).
124. Fraud Enforcement & Recovery Act of 2009, Pub. L. No. 111-21, 123 Stat. 1617.