On December 23, the U.S. Attorney for the Middle District of Georgia announced that an Arkansas-based drug wholesaler, BTW Solutions, LLC, agreed to pay $1.5 million to resolve allegations of violating federal laws in a case brought to light by a whistleblower under the False Claims Act’s qui tam provisions. The case, U.S. ex rel. Young v. BTW Solutions, LLC, et al., alleged that BTW Solutions improperly billed the government for pain creams sold to physicians treating workers’ compensation patients.
According to the Department of Justice (DOJ), BTW Solutions violated the Anti-Kickback Statute and False Claims Act between 2013 and 2018 by engaging in a profit-sharing scheme with physicians. The company reportedly offered pain creams to physicians at or near cost, billed the Department of Labor’s Office of Workers’ Compensation Programs (OWCP) at marked-up prices, and shared the reimbursement profits with the physicians. The OWCP handles medical bill payments under the Federal Employees’ Compensation Act (FECA), which provides healthcare to injured federal workers.
The case began in June 2017, when a whistleblower filed a lawsuit under the False Claims Act’s qui tam provisions. These provisions allow private individuals to file lawsuits on behalf of the government when they encounter fraud against federal programs. If the government recovers funds through a settlement or judgment, the whistleblower is eligible to receive between 15 and 30% of the recovered funds.
The Department of Justice formally intervened in the case in September 2023, following years of investigation into the alleged misconduct. The settlement concludes the case without any admission of liability by BTW Solutions. “The Anti-Kickback Statute protects medical decision-making from being corrupted by improper financial considerations,” said U.S. Attorney Peter D. Leary. He referred to the settlement as the result of a “difficult case involving an often-overlooked program designed to provide needed healthcare to injured federal workers.”
“This settlement allows the OWCP to recover medical bill payments under the Federal Employees’ Compensation Act and return these funds to the Employees’ Compensation Fund,” said OWCP Director Christopher J. Godfrey. “It also shows the commitment of the Department of Labor to ensuring that program funds are used as the law requires.”
During FY 2024, settlements and judgments under the False Claims Act exceeded $2.9 billion and over $2.4 billion of the recoveries stemmed from qui tam whistleblower lawsuits. Furthermore, according to the government, a record 979 qui tam lawsuits were filed in FY 2024.
However, in September 2024, a district judge in Florida ruled that the False Claims Act’s qui tam provisions were unconstitutional. The U.S. federal government is urging the U.S. Court of Appeals for the Eleventh Circuit to reverse that decision, stating in a brief that “other than the district court here, every court to have addressed the constitutionality of the False Claims Act’s qui tam provisions has upheld them.”
Whistleblower advocates have warned of dire consequences should the district court ruling stand and have also outlined why it is inconsistent with prior case precedent and misinterprets the qui tam provisions.
The claims asserted in this case are allegations only, and there has been no determination of liability.
Further Reading:
DOJ Reports a Record Number of Qui Tam Whistleblower Suits Were Filed in 2024
