For more than 150 years, the False Claims Act has been key to ferreting out fraud in US military and health care spending.

The False Claims Act (FCA) has long served as a powerful weapon against fraud and waste in government programs, from rancid Civil War rations to Medicare scams. The Department of Justice (DOJ) recovered $2.88 billion under the law last year, with whistleblowers involved in the majority of cases.

March 2 marks the anniversary of the law, which was signed in 1863 by President Abraham Lincoln. After the Civil War, the FCA continued to identify military contractors guilty of mismanagement and fraud. With rising health costs, much of it covered by Medicare, most cases now involve medical providers and suppliers. The DOJ’s December report noted that $2.5 of the $2.8 billion in recovery involved the health care industry. The first line of a story in the trade publication Modern Healthcare reports “Healthcare industry groups have always hated False Claims Act whistleblower lawsuits.”

The law’s qui tam provision allows those with evidence of fraud to sue on behalf of the federal government. In these cases, the whistleblowers often expose crimes the government may have never detected. Qui tam cases accounted for more than $2.1 billion of the $2.8 billion collected in fiscal year 2018. More than $300 million of that went to whistleblowers.

Challenges

Despite the high numbers, the False Claims Act faces challenges. Here are a few of them:

• Last year’s recoveries were high, but they were the lowest since 2008.
• Attorney General William Barr has not been a supporter of the False Claims Act in the past. In 2001, he called it an abomination and described whistleblowers as “bounty hunters.” However, during his confirmation hearings, he promised to “diligently uphold” the law. Under questioning, Barr said the constitutionality of the law has been upheld by the Supreme Court.
• Whistleblowers still pay a steep price for coming forward. The New Yorker ran a long story in February on the personal toll of pursuing a qui tam case. “Institutional denial, obfuscation, and retaliation are hallmarks of many whistle-blowing cases,” wrote Sheelah Kolhatkar
• A case before the Supreme Court, Cochise Consultancy, Inc. v. United States, could narrow the window for action on qui tam cases. The case will decide when the statute of limitations clock start running in a False Claims Act case when the government declines to intervene.
• The DOJ in January moved to dismiss 11 qui tam suits filed by Health Choice Group, which DOJ describes as a “shell company” controlled by “investors and former Wall Street investment bankers.”