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Health Care Reform, or 'Qui Tams Made Easy'

BY Jonathan L. Marcus
May 27, 2010

While the insurance provisions of the new health care reform law (the Patient Protection and Affordable Care Act or PPACA) have received much media attention, the media have barely noticed another PPACA feature that could have a profound impact on the pharmaceutical, medical-device and health care industries ' its revisions to the False Claims Act (FCA), 31 U.S.C. ” 3729 et seq. The PPACA makes it significantly easier for whistleblowers to bring suits under the FCA, a statute that already entices whistleblower plaintiffs with potential millions in treble damages. An uptick in whistleblower suits will likely bring increased health care enforcement by the Department of Justice (DOJ), since whistleblower suits generated almost ten times as many new matters opened by the DOJ as department-initiated investigations during the period 2002-2009.

Narrowing What Is a 'Public Disclosure'

The “public disclosure bar” of the old FCA allowed defendants like hospitals, medical-device companies, pharmaceutical companies and doctors to obtain dismissal of a qui tam suit when the facts alleged had already been publicly disclosed. This bar reflected Congress's attempt to strike a balance between encouraging whistleblowers to come forward and preventing opportunistic plaintiffs from piggybacking on facts already in the public domain. The PPACA noticeably shifts that balance.

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