False claims recoveries in the health care field are a growth area. In the 2003 fiscal year, the government collected $1.48 billion in suits initiated by whistleblowers under the federal False Claims Act. Most of that was obtained in the health care industry.
The Federal False Claims Act provides penalties against those who file false claims with the government and gives a portion of the government's recovery to qualifying individuals who have provided the information on which the government's recovery is based. (These whistleblower suits are also called "qui tam" actions, a Latin shorthand for "one who brings the action for himself as well as the king.")
Large amounts of money are involved and healthcare entities are especially vulnerable. Health care entities, such as hospitals, laboratories, nursing homes, and physician practices groups submit a high volume of claims to the government. A false claim is punishable by a penalty of $5,000 to $10,000 per claim. Even more formidable is the prospect of facing damages for claims that may have spanned several years -- and then having damages multiplied by three, as provided in the False Claims Act.