Sen. Charles Grassley, who accused the U.S. Justice Department of shortchanging taxpayers in last year's proposed fraud settlement with HCA, plans to introduce legislation to require congressional reviews of large settlements of federal False Claims Act charges.
His proposed amendment to the False Claims Act, expected to be introduced this month, could force providers to jump through additional legal hoops before settling civil fraud allegations. The bill would require the Justice Department to explain to the Senate Finance Committee or some other congressionally appointed agency the mathematical, statistical and legal rationale for a settlement.
The reviews would be triggered when single alleged damages in False Claims Act cases exceed $5 million. Officials could not say how many cases would reach that threshold, but while the actual number of those cases would be small, they constitute the bulk of annual dollar amount recoveries. James Moorman, president of Washington-based Taxpayers Against Fraud, said the Justice Department seldom actually states the amount of single damages alleged in False Claims Act cases.
Healthcare defense attorney Jack Boese, of the Washington firm Fried Frank Harris Shriver & Jacobson, said the bill would "take the settlement of False Claims Act cases out of the hands of professionals and put them into the hands of politicians." He predicted that would lead more defendants to litigate.
A Senate Finance Committee staff member said the review panel would not have veto power, but the prospect of congressional review would compel the Justice Department to achieve fair settlements for taxpayers.
"I don't think this legislation is necessary," Moorman said. "The Justice Department should provide this kind of information to senators already. But it isn't."
Grassley, who is chairman of the Senate Finance Committee, loudly objected to a tentative $898.5 million Justice Department settlement with Nashville-based HCA, which he said may have shortchanged the Medicare Trust Fund and the whistleblowers who brought the cases. That agreement is pending and awaits approval by a federal judge.
Grassley told a meeting of healthcare lawyers last month that Congress had "an explicit right to review the facts and figures behind any proposed False Claims Act settlement." As a legal precedent, Grassley cited a provision in the Internal Revenue Code giving the congressional Joint Committee on Taxation the right to review taxpayer refunds of more than $2 million.
Justice Department and HHS inspector general officials declined comment, but the proposal has piqued providers' interest.
"In reality, it seems that what Sen. Grassley proposes is to do just what he says he is trying to avoid: to politicize and delay the process of settling FCA claims," Boese said.