Today, even the most ethical and compliant health care and life science companies are faced with substantial risks while operating in a highly regulated field of ever-changing laws, rules, and regulations. As federal and state health care investigations and prosecutions continue to increase, there has also been a dramatic increase in the number of whistleblower, or qui tam, suits filed each year. In fiscal year 2013, a total of 753 qui tam suits were filed under the federal False Claims Act,1 alleging health care fraud and other frauds against the government.2 Those 753 complaints represent a 15 percent increase over the prior year’s record number of 652 complaints filed.
While companies may feel helpless to stem the tide of suits by whistleblowers, there are steps that companies can and should take to lessen the chances of being named as a defendant in a qui tam suit and thereby lessen the chances of being subjected to the glare of government scrutiny. There are also steps that companies can and should take to best position themselves to address and resolve the employment-related issues that often accompany claims of alleged misconduct by whistleblowing employees.
