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False Claims Act: Failure to Seek Legal Advice Not a Violation of the FCA

Published online by Cambridge University Press:  01 January 2021

Jeanne Cavanaugh
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Extract

In United States ex rel. Quirk v. Madonna Towers, Inc., the U.S. Court of Appeals for the Eighth Circuit held that the failure of a skilled nursing facility's executives to seek a legal opinion regarding a billing practice they considered valid did not meet the definition of knowingly presenting a false claim for payment to the federal government under the False Claims Act (FCA). Alleging that the facility that provided care to his aunt fraudulently submitted claims to Medicare for services provided free of charge, the appellant brought this case qui tam on behalf of the federal government under the FCA.

The FCA was passed by the legislature in an effort to punish and deter fraud against the federal government. It provides financial incentives for private individuals to come forward with information about fraudulent activity.

Type
Recent Developments in Health Law
Information
Journal of Law, Medicine & Ethics , Volume 30 , Issue 2 , Summer 2002 , pp. 318 - 319
Copyright
Copyright © American Society of Law, Medicine and Ethics 2002

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References

United States ex rel. Quirk v. Madonna Towers, Inc., 278 F.3d 765 (8th Cir. 2002).Google Scholar
31 U.S.C.A. §§ 3729–3733 (2002).Google Scholar
See Quirk, 278 F.3d at 766.Google Scholar
31 U.S.C.A. $ 3729 (2002) (Notes of Decisions, Section I, Part 4).Google Scholar
Damages are calculated as treble damages and civil penalties of $5,000 to $10,000 per false claim. 31 U.S.C.A. $ 3729(a) (2002). The qui tam plaintiff can receive up to 30 percent of the government's recovery. See Meyer, J.A. Anthony, S.E., Reducing Health Care Fraud: An Assessment of the Impact of the False Claims Act (Washington, D.C.: New Directions for Policy for Taxpayers Against Fraud, 2001): at 9, available at <http://www.taf.org/publications/PDF/reducing.pdf>.Google Scholar
Quirk, 278 F.3d at 767 (citing Norbeck v. Basin Elec. Power Coop., 248 F.3d 781, 803 (8th Cir. 2001)).Google Scholar
See Id. at 766–67.Google Scholar
Id. at 767 (citing 42 U.S.C. $ 1395y(a)(2)).Google Scholar
Id.Google Scholar
See Id. at 769.Google Scholar
Id. at 767 (citing 31 U.S.C. $ 3729(b)).Google Scholar
Id. (citing 31 U.S.C. $ 3729(b)).Google Scholar
See id. at 768 (citing 31 U.S.C. $ 3729(b)(1)).Google Scholar
Id. (citing 31 U.S.C. $ 3729(b)(3)).Google Scholar
Id. (citing 31 U.S.C. $ 3729(b)(2)).Google Scholar
See Meyer, Anthony, , supra note 5, at 12.Google Scholar
See id. at 10, 17.Google Scholar
See 31 U.S.C. $ 3729(b). The 1986 amendments to the FCA “clarified the definition of ‘knowingly’ (the Act's requisite level of intent for liability).” Meyer and Anthony, supra note 5, at 10.Google Scholar