What is the Origin of False Claims Act?

The original FCA was enacted in 1863 during the American Civil War to combat widespread fraud by contractors selling defective goods to the Union Army, hence its nickname, "Lincoln's Law." Its modern relevance to healthcare fraud, waste, and abuse grew significantly following major amendments in 1986 and 2009, making it a powerful tool for prosecuting healthcare providers and pharmaceutical companies who submit false billing claims. It is a key piece of legislation in healthcare compliance and integrity.

What is the Mechanism of False Claims Act?

The act operates by establishing liability for a broad range of fraudulent conduct, such as knowingly submitting false records, making false statements material to a false claim, or conspiring to defraud the government. The enforcement mechanism relies on the Department of Justice pursuing civil litigation or intervening in qui tam suits filed by whistleblowers. Penalties include significant fines per false claim and treble damages, providing a strong deterrent against financial misconduct in the medical field and protecting taxpayer funds.

False Claims Act ∞ Area

False Claims Act

Meaning

The False Claims Act (FCA) is a pivotal United States federal law that imposes liability on persons and companies who defraud governmental programs, including federal healthcare programs like Medicare and Medicaid. It is the government’s primary civil tool for recovering funds lost to fraud and abuse, specifically targeting the submission of false or fraudulent claims for payment. The FCA includes qui tam provisions, which allow private citizens, known as whistleblowers, to file lawsuits on behalf of the government and share in any recovery.