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What Is the Penalty?[index]

The law has not been changed since 1986, so the penalty for each claim remains "...not less than $5,000 and not more than $10,000, plus 3 times the amount of damages which the Government sustains because of the act of that person...". In addition, the qui tam plaintiff is entitled to all legal expenses and costs of court. These can easily exceed a million dollars, and they are tied to the size of the award. You can be forced to pay attorneys fees that exceed the other penalties.

The definition of a claim is important in determining how the penalty is calculated. A single grant request could generate a penalty of $5-$10,000 as a single false claim, plus 3 times the amount of the grant. Since there is no materiality defense, a single, insignificant misrepresentation can make a $1,000,000 grant into a false claim, and generate a penalty of $3,000,000!

The penalty can mount up with lots of little claims as well. Assume a medical researcher tries a new infusion pump on a group of Medicaid (indigent) patients. The pump has not been approved by the FDA. The patients are billed the standard charge for an infusion pump, and this goes to the hospital, not the researcher. Each patient bill related to the infusion pump could be a false claim, carrying a minimum $5,000 penalty. In one case, a dentist was charged with billing the government separately for oral cancer exams on Medicare patients when this exam was part of the routine dental checkup. The dentist submitted 3,683 claims for these exams. When the government decided that it was improper to bill for this examination, these became false claims. The trial court was required to award plaintiff $18,415,000 - 3,683 x $5,000.

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