The False Claims Act is federal law dating back to the Civil War that allows people to file actions against federal contractors that they accuse of committing claims fraud against the government. The act of filing such actions is commonly known as “whistleblowing.” Persons filing under the False Claims Act typically receive a portion of any recovered damages. Because of widespread fraud during the Civil War (for example, unscrupulous contractors sold the Union Army decrepit horses and mules in ill health, faulty rifles and ammunition, and rancid rations and provisions), Congress passed the False Claims Act in 1863 to give the government a legal weapon to fight back. Through the years, defense contractors have been the primary target of False Claims Act lawsuits. But in the past few decades, as healthcare spending has soared in all sectors, the industry has become a much more prominent setting for False Claims Act litigation. The law has been amended several times, most recently in 2009 and 1986. Earlier this year, the U.S. Justice Department reported that for federal fiscal 2010, the government netted a record $2.5 billion in healthcare recoveries under the False Claims Act.
- Round 1: Lost To Creation of the Medicare Part D prescription drug program