Why Thompson is Wrong: Misuse of the False Claims Act to Enforce the Anti-Kickback Act

Abstract

An increasing number of qui tam suits filed under the whistleblower provisions of the civil False Claims Act are premised on alleged violations of the Anti-Kickback Act, a criminal law with no private right of action. In July 1998, the Southern District of Texas opened the door for self-appointed private prosecutors to bootstrap such violations onto the civil False Claims Act, by denying the defendants' motion to dismiss in United States ex rel. Thompson v. Columbia/HCA Healthcare Corporation.

This article analyzes three primary reasons the decision in Thompson is wrong: 1) The Thompson court accepts the argument that Medicare payments are conditioned on blanket certifications of compliance with health care laws and regulations, an assertion that is contrary to the government's practice of ignoring certain technical violations of the Anti-Kickback Act through Department of Health and Human Services Advisory Opinions; 2) It assumes that every violation of the Anti-Kickback Act will be successfully prosecuted by the government; and 3) It permits a claim under the "reverse false claims" provision of the False Claims Act, improperly seeking to transform an inchoate, potential and undetermined liability under the Anti-Kickback Act into a present obligation to pay the government under the FCA.

JEL Classification: K14, K23, K41, K42