March 15, 2024

Healthcare Fraud under The False Claims Act: Safeguarding Public Health and Funds

Healthcare fraud is an insidious drain on our nation’s finances, amounting to billions of dollars in losses for government healthcare programs annually. Although it’s a pressing financial issue, that is not the only concern; it compromises the integrity of healthcare services and erodes public trust. Beneath the vast sums spent on Medicare, Medicaid, and other health services, the opportunities for fraud are numerous, and the consequences are insurmountable. From the ashes of past claims going after taxpayer dollars, The False Claims Act was formed. Through its enforcement and the pivotal role of the qui tam lawsuit, the FCA serves as a powerful deterrent, ensuring that healthcare fraud is identified, addressed, and penalized. In the forthcoming discussion, we will uncover the mechanisms of healthcare fraud, notable cases that have shaped legal precedent, and the impact of the False Claims Act in safeguarding both public health and their pockets.

The Spectrum of Healthcare Fraud

In the United States, at the heart of healthcare fraud lies a multitude of deceptive practices, each engineered to deceive and receive funds from government-run health programs. Common stratagems include billing for services not provided, misrepresenting non-covered treatments as necessary medical procedures, and inflating costs through up-coding, all which are different forms of a false claim. These fraudulent activities not only bleed critical resources but also undermine the very foundation of patient care. On the other end of these horrible claims, is relator initiating a qui tam action, defending the government and protecting their funds.

Qui Tam and The False Claims Act: Justice Is Served

The qui tam provision of the False Claims Act is a crucial ally in the fight against healthcare fraud. It empowers individuals, known as a qui tam relator or whistleblower, to file a lawsuit on behalf of the government. These courageous actions often initiate a qui tam case that can bring to light complex schemes that might otherwise go unnoticed, opening the door to recovering billions of dollars for government healthcare programs. Furthermore, the successful pursuit of a qui tam action not only results in significant financial recoveries but also deters future fraudulent activities by setting a precedent for accountability and legal repercussions. This enforcement mechanism is grounded in qui tam law, which is designed to encourage private citizens to act as watchdogs on behalf of the public interest. By allowing relators to share in the financial recovery, qui tam law not only compensates individuals for their risk and effort but also significantly enhances the government’s ability to detect and prosecute fraud, ensuring the integrity and sustainability of healthcare funding. It’s the public fighting for justice for the government and the public, when health care providers try to abuse both.

Healthcare Fraud: Exposing Malpractice

Recent years have seen a series of high-profile healthcare fraud cases, showcasing the False Claims Act’s reach and the legal system’s commitment to combating fraud. One notable example from July 2013 involves the misconduct of Dr. Farid Fata, a Detroit-based oncologist who was found guilty of falsely diagnosing patients with cancer and subjecting them to unnecessary chemotherapy treatments. This sinister scheme not only capitalized on the vulnerabilities of countless patients but also defrauded Medicare of millions of dollars. The turning point in this case came when Dr. Soe Maunglay, a colleague of Fata, began to question the validity of these diagnoses. After collecting evidence and facing ethical dilemma’s, Maunglay informed practice manager George Karadsheh, who then alerted the FBI, resulting in Fata’s arrest and conviction. This case, initiated through the courage of an individual whistleblower, shows how a qui tam action has a profound impact in the realm of healthcare fraud. It highlights the critical role that healthcare professionals and qui tam relators play in exposing fraudulent activities, thereby protecting patients and preserving the integrity of government healthcare programs.

The Impact on Medicaid and Medicare

Medicaid and Medicare, essential pillars of American healthcare, are frequent targets of fraudulent activities. The abuse of these programs has significant repercussions, from financial loss to potential harm to beneficiaries. The federal False Claims Act, with its provisions for triple damages and penalties, acts as a guardian, protecting these programs from exploitation. A significant number of qui tam lawsuits have been pivotal in exposing and addressing fraud against Medicaid and Medicare. Through the mechanism of qui tam lawsuits, whistleblowers have successfully brought to light shocking cases of fraud, leading to the recovery of billions of dollars for these vital healthcare programs.

The Role of Whistleblowers in Uncovering Fraud

Whistleblowers are often the unsung heroes in the narrative of healthcare fraud detection. The False Claims Act provides them with protection from retaliation and a share in any recovered funds, incentivizing insiders to report wrongdoing. It is through filing a qui tam lawsuit that these whistleblowers can initiate legal action against malpractice, playing a critical role in the enforcement of the False Claims Act. This process not only brings justice to fraudulent parties but also reinforces the importance of integrity within the healthcare industry, showcasing the power and impact of individual courage in the face of wrongdoing. In the case of George Karadsheh, who played a pivotal role in exposing Dr. Farid Fata’s deceitful activities, he agreed to take a 10% share of the recovered funds, which is notably lower than the typical 15%-25% most whistleblowers receive. Karadsheh’s decision underscores the diverse motivations behind whistleblower actions, where the pursuit of justice can outweigh personal financial gain.


The False Claims Act is more than a legal instrument; it is a defense against the erosion of trust in the healthcare system. By holding fraudulent parties accountable and recovering misappropriated funds, the False Claims Act reinforces the ethics of public healthcare programs. Reflecting on the past, we see qui tam actions as vital enforcers of the False Claims Act, effectively addressing and rectifying instances of fraud. Looking forward, we aspire for healthcare providers to adhere to ethical practices and for whistleblowers to continue exposing fraudulent activities, ensuring the integrity of medical practice and the protection of public funds.