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False Claims Act Nets Whistleblower $4.9 Million

Last week the Atlanta Journal Constitution reported the case of Teri Ramsey, a former St. Joseph’s Hospital nurse turned whistleblower whose False Claims Act lawsuit against St. Joseph’s cost the hospital $26 million with a net reward to her of $4.9 million.This is the highest paid health care fraud in Georgia history.

Ramsey, a nurse by profession, was hired to review hospital admissions.Within weeks of beginning her job, Ramsey noticed that many outpatient services were billed as inpatient services.The billing distinction allowed for St. Joseph’s to collect significantly more from Medicare.Ramsey complained to supervisors and doctors, but claims she was quickly rebuffed and even told not to “rock the boat.”Ramsey’s persistence caused her to be ostracized by co-workers and intimidated by supervisors.The hospital culture created a disincentive to whistle blowing.

Ramsey persisted, nevertheless.She contacted an attorney and filed a complaint under the federal False Claims Act. This Act, also known as a qui tam proceeding, allows private citizens to sue on behalf of the United States for fraudulent claims on United States funds.The False Claims Act has considerable teeth. Defendants found liable under the Act must pay treble (three times) damages of the actual over billing.Also, the Act provides for civil penalties of $5000 per each fraudulent claim.Finally, in order to encourage private citizens to turn in defrauders, the private citizen is entitled to collect 15 to 25 percent of the recovery.Often, federal prosecutors step into the suit and pursue it on behalf of the government.

For Ramsey’s trouble, she is now a stay-at-home mom with a considerable nest egg for her family. Many employees fear retaliation for filing whistleblower lawsuits or even for complaining about fraudulent practices.The Federal False Claims Act also provides a private cause of action for employees who suffer retaliation as a result of the complaint.

Since the False Claims Act was restructured in 1986 and given more procedural and substantive force, the federal government has steadily collected one billion dollars or more per year.The health care industry accounts for the vast majority of settlements and judgments filed under the False Claims Act.

Last May the Georgia legislature enacted the State False Medicaid Claims Act.This act is modeled on the federal False Claims Act.In 2005, the federal government offered incentives to states that enacted similar state legislation.Those states participating in similar legislation receive a ten percent share of Medicaid fraudulent recoveries.The state act does exclude public employees or officials from participating.The federal act does not make any distinction between public and private employees.

If you believe that you may have a claim under the federal False Claims Act or the Georgia State False Medicaid Claims Act, contact Robert Katz for a free, private consultation.