Article - October 6, 2008 - Ortho SuperSite

Recent court lawsuits shed light on whistle-blower and informed consent

By Lawrence H. Brenner, JD; B. Sonny Bal, MD, MBA

“Qui tam” is an abbreviation of the Latin phrase qui tam pro domino rege quam pro se ipso in hac parte sequitur, and it refers to the filing of a lawsuit by a private citizen on behalf of the king. Qui tam writs were issued by the king in 13th century England to enforce his laws. This legal concept existed in the United States during colonial times to enforce the laws of the new federal government since there were no law enforcement officers. Qui tam lawsuits were filed, for example, against corrupt government contractors during the Civil War under the administration of President Abraham Lincoln.

The practice fell into disrepute in England in the 19th century and effectively ended there in 1951. However, recent proposals have sought to reintroduce qui tam in England based upon the current United States model, in which a private party or “whistle-blower” who has knowledge of past or present fraud committed against the federal government can bring suit on the government’s behalf under the False Claims Act. The private person in such suits is known as a “relater,” and this person must have some knowledge that the defendant knowingly submitted or caused the submission of false or fraudulent claims to the United States government. The relater need not show personal harm from the defendant’s conduct.

In practice, qui tam legal actions are usually filed by a company insider who is a private citizen, who initiates the suit by filing a sealed complaint in a federal district court. After reviewing the case, the Department of Justice has the option of intervening and assuming the lead role in the whistle-blower lawsuit.

Health care fraud

Whistle-blower lawsuits most frequently allege health care fraud, and qui tam settlements can be very substantial. The largest settlement was against Tenet Healthcare Corp. for $920 million. In these cases, the individual(s) who initially file the action typically receive between 15% and 25% of the total amount recovered as a reward.

Between 1996 and 2005, the government recovered $9.3 billion against health care providers; private whistle-blowers collected over $1 billion. While the number of whistle-blower claims has dropped in recent years, the monetary recoveries have increased from about $10 million per case in 2002 to $50 million in 2005.

Not surprisingly, there have been criticisms of the qui tam or whistle-blower suits. There is also concern about the potential for abuse, given the high incentives to file a qui tam lawsuit. Also, company insiders who file such suits may themselves have engaged in illegal conduct, so rewarding them with a part of the recovery is offensive. In some cases, employees may conspire for years to file a whistle-blower lawsuit, thereby violating their duty of loyalty to their corporate employer.

Pros and cons

Advocates of whistle-blower lawsuits claim that they are an effective way to combat health care fraud and abuse. The threat of a whistle-blower lawsuit can chill the unbridled desire of unscrupulous corporations to increase profit margins by submitting inflated claims to the federal government.

Surprisingly, some plaintiff’s attorneys who have filed qui tam actions have expressed their own set of complaints, namely that the federal government does not always intervene in the qui tam action. The government may also ineffectively prosecute such claims, and judges have not been entirely receptive to whistle-blower lawsuits, making monetary recovery difficult.

The most recent example of a whistle-blower lawsuit was the one filed against 136 spine surgeons and company distributors linked to the use of Medtronic products. The lawsuit alleges that, “All of the defendants have been paid sham consulting fees in 2006 ... none of these defendants performed consulting services ... and these payments constitute kickbacks made or effected by each physician and/or for the agreement to perform unlawful promotional activities for ... off-label sales.”

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