Whistleblower lawsuits—also known as qui tam actions—have increased significantly in recent years as the incentives for bringing such claims have grown. These claims typically are brought under federal or state versions of the False Claims Act (FCA). The proliferation of FCA claims against health-care service providers in particular is expected to accelerate as government involvement in health care expands with implementation of the Affordable Care Act (ACA). There are several reasons for this: (1) the expansion of government involvement in the health-care system necessarily will expand the opportunities for potential wrongful conduct; (2) the ACA has modified or created additional regulatory obligations for which a violation may support an FCA claim; and (3) the ACA made key changes to the FCA that, among other things, expanded the pool of potential whistleblowers.
To protect themselves in this increasingly dangerous environment, health-care service providers should review their existing insurance policies to determine whether they have coverage for the defense and resolution of FCA and related claims. While FCA claims are based upon allegations of fraud—often a bar to insurance coverage—coverage nevertheless may be available for the defense and resolution of these claims. This article addresses errors and omissions, employment practices liability, and directors and officers liability insurance—the traditional forms of insurance most likely to afford coverage to health-care service providers should they face such claims, and provides guidance for maximizing insurance coverage.
