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FCA Statute of Limitations Issues

FCA statute of limitations issues can be quite complex.(August 10, 2012):  The False Claims Act (FCA) is the primary civil enforcement used by the government to address the improper submission of false or fraudulent claims to the government for payment.  Under the FCA, a defendant can be held liable for significant penalties and treble damages, per false claim.  Moreover, under the FCA, a whistleblower can bring an action on behalf of the government and may be eligible to receive a share of any recoveries.  How long does a defendant have to bring an FCA case?  As discussed below, FCA statute of limitations issues can be somewhat complex.  If your are facing a potential FCA case, it is imperative that you retain experienced legal counsel to advise you of your rights.

I.  FCA Statute of Limitations:

The statute of limitations for False Claims Act (FCA) cases is quite long and presents several complex issues to be considered. The basic FCA statute of limitations is 6 years, or 3 years after the government knew or should have known about the fraud, up to a maximum of 10 years. This often raises questions including when “should” the government know about a certain fraud, especially if it long standing and continuous? What if the government should have known about the case 4 years ago, but the 6 year timeframe has not yet run?

II.  Impact of the Wartime Suspension of Limitations on FCA Cases:

A little known statute was recently used in a case in Texas to completely toll the statute of limitations. The court in U.S. v. BNP Paribas SA employed the “Wartime Suspension of Limitations” statute to toll the statute of limitations beyond what it would have normally been. The Wartime Suspension of Limitations provides that, “the running of any statute of limitations applicable to . . . fraud or attempted fraud against the United States or . . . connected with or related to the prosecution of the war . . . shall be suspended until 5 years after the termination of hostilities as proclaimed by a Presidential proclamation . . . or concurrent resolution of Congress.” 18 U.S.C. 3287.

Importantly, the suspended statute of limitations must be “connected with or related to the prosecution of the war.” In the Paribas case, the court in the Southern District of Texas (which includes Houston) held that a major French bank whose subsidiary was involved in exporting was sufficiently related to the prosecution of a war to toll the FCA statute of limitations, despite the fact that the company is not specifically a contractor for the Department of Defense or otherwise involved in war efforts. The Paribas decision raises many questions:

  • What constitutes a “war”? The United States’ last official declaration of war occurred on June 5, 1942 against Romania , Hungary, and Bulgaria during WWII. But as you know, the United States has been, and currently is, frequently engaged in military conflicts around the globe. What about NATO peacekeeping missions, or limited interventions? Under Paribas, it appears that “war” is construed broadly, and any military intervention funded by Congress could be sufficient to activate the statute.
  • What is the connection or relation of the war to the specific fraud?  In Paribas, the defendant was an exporter of grain dealing with the Department of Agriculture. While not specifically related to the war, an argument can be made that the exportation of food supplies, especially by a major international company, could have a sufficient effect on our military, its ability to obtain food and other supplies, and international relations. But what about healthcare? Certainly claims made under the TriCare program that were found to be false could be tolled by the Wartime Suspension of Limitations. But what about standard Medicare and Medicaid claims? Is the health of the nation sufficiently connected to war efforts to justify completely tolling the statute of limitations?

Obviously, this decision raises important concerns for anyone involved in FCA litigation, or anyone thinking about engaging in FCA litigation. On both sides, whistleblowers and FCA accused alike, this should be a major issue that your legal counsel must consider.

Robert Liles, David Parker, and Paul Weidenfeld are experienced in counseling clients on FCA statute of limitation and other litigation related matters.  Moreover, they have handled a variety of FCA cases. For a free consultation to discuss the FCA statute of limitations issues raised in Paribas or for other questions regarding the FCA, please call today at: 1 (800) 475-1906.

The AHA Expresses its Concerns with Recent False Claims Act Kyphoplasty Cases

The AHA is Concerned with DOJ's Use of the False Claims Act in Kyphoplasty Cases(September 11, 2010):  The American Hospital Association (AHA) has expressed its concern that the Department of Justice (DOJ) and its law enforcement partner, the Department of Health and Human Services, Office of Inspector General (HHS-OIG) may be overreaching in its use of the False Claims Act in kyphoplasty cases. As set out in the AHA’s letter dated September 7, 2010:

 

  “The AHA is concerned that aggressive FCA investigations are being initiated upon the discovery of evidence of a mistake or overutilization, making FCA enforcement through negotiated “settlement” a self-fulfilling prophecy.”

 Citing a “kyphoplasty” initiative current being pursued by at least one U.S. Attorney’s Office, the AHA stated:

 “. . . notwithstanding the fact that kyphoplasty claims have long been subject to changing and ambiguous regulations and guidelines, the kyphoplasty initiative appears to observers to rely on data mining to establish a presumption that hospitals are liable for “knowing” violations of the civil FCA and subject to treble damages and penalties. Targets of the initiative have received letters disconcertingly similar to letters written prior to the issuance of the original “Holder Memo” in 1998 (Guidance on the Use of False Claims Act in Civil Health Care Matters).” (emphasis added).

As the AHA noted, the threat of an FCA action, and its accompanying liability, forces hospitals to incur specialized legal counsel and outside forensic accountants in order to defend the hospital’s interests.  As a result, some hospitals elect to settle the allegations rather than litigate the issues.  In recent years, our law firm has noted a significant shift in the government’s reliance on data-mining in its development of administrative, civil and even criminal cases.  We share the AHA’s concerns in the regard.  The over-reliance on data mining in the targeting of defendants may lead to a presumption of guilt before any examination of the medical records and association documentation has occurred.  Notably, Robert W. Liles, a Managing Partner at Liles Parker was instrumental in the drafting and implementation of the “Holder Memo.”  A number of our attorneys have extensive experience working on False Claims Act cases.

Robert Liles health care attorneyA number of Liles Parker attorneys have extensive experience handling False Claims Act cases, including those brought under the Act’s Qui Tam provisions (commonly referred to as its “whistleblower”provisions).  Should you have questions regarding the False Claims Act, give us a call for a complimentary consultation.  We can be reached at: 1 (800) 475-1906.