An individual does not need to be an employee of a company to file an anti-retaliation claim under the False Claims Act (FCA), according to a Florida judge. Before May 2009, only individuals employed by a company had the right to file claims for retaliation under the FCA anti-retaliation provisions if they were fired or suffered other consequences from exposing fraudulent activities by a company. However, that changed with the passage of the Fraud Enforcement and Recovery Act (FERA). A recent settlement involving a Florida hospital and clinics and two doctors brought the retaliation issue to light. The case resulted in the defendants paying the United States $3.5 million to settle allegations of fraudulently billing the Medicare, Medicaid, and TRICARE programs for radiation oncology services that were not eligible for payment. In this case, United States ex rel. Koch v. Gulf Region Radiation Oncology Centers Inc., et al., the relator, Richard Koch, filed an anti-retaliation suit against his employer and the two other entities involved in the suit, neither of which actually employed him. Background Koch was hired in 2008 as an administrator/manager by West Florida Medical Center Clinic. Several mergers with West Florida Medical Center Clinic and Sacred Heart […]
An individual does not need to be an employee of a company to file an anti-retaliation claim under the False Claims Act (FCA), according to a Florida judge.
Before May 2009, only individuals employed by a company had the right to file claims for retaliation under the FCA anti-retaliation provisions if they were fired or suffered other consequences from exposing fraudulent activities by a company. However, that changed with the passage of the Fraud Enforcement and Recovery Act (FERA). A recent settlement involving a Florida hospital and clinics and two doctors brought the retaliation issue to light.
The case resulted in the defendants paying the United States $3.5 million to settle allegations of fraudulently billing the Medicare, Medicaid, and TRICARE programs for radiation oncology services that were not eligible for payment.
In this case, United States ex rel. Koch v. Gulf Region Radiation Oncology Centers Inc., et al., the relator, Richard Koch, filed an anti-retaliation suit against his employer and the two other entities involved in the suit, neither of which actually employed him.
Background
Koch was hired in 2008 as an administrator/manager by West Florida Medical Center Clinic. Several mergers with West Florida Medical Center Clinic and Sacred Heart Health System eventually resulted in Koch becoming an employee of Gulf Region Radiation Oncology (GRRO). In January 2010 Koch was fired by GRRO after raising concerns about the organization defrauding government health care programs. Koch subsequently filed an anti-retaliation suit against GRRO and included the predecessor companies West Center Clinic and Sacred Heart Health System, even though they maintained a separate legal status.
The two entities sought dismissal of the retaliation claim based on the fact that Koch was not their employee. The judge ruled that because of a change in the FCA’s anti-retaliation language as a result of FERA, which became law in 2009, the suit was valid. FERA expanded the anti-retaliation to reach nonemployers by removing the word employer from the FCA’s retaliation provisions.
What does this mean for a laboratory? Potentially, if a hospital system sells its outreach laboratory business to another laboratory, it may still be held liable under FCA anti-retaliation provisions for acts committed by the new company under certain circumstances. This change in the retaliation section of FERA will help employees who are “blackballed” or otherwise prevented from gaining employment in a particular marketplace because they filed a whistleblower lawsuit.
Takeaway: The anti-retaliation provisions of the False Claims Act can result in problems for a laboratory even after it is sold to another company. Labs should be aware that individuals who are no longer employees can still file anti-retaliation claims.
