On April 28, 2016, the House Judiciary Committee’s Subcommittee on the Constitution and Civil Justice (Subcommittee) held a hearing on the False Claims Act (FCA). According to a statement of the Subcommittee chair, the hearing was called to examine FCA oversight and “what more can be done to prevent, detect, and eliminate false claims costing taxpayer dollars, while ensuring fair and just results.” The Subcommittee invited two health care lawyers, a professor and a hospital CEO to testify during the hearing. Several other individuals also submitted written statements to the Subcommittee, most notably Senator Chuck Grassley (R-IA), chairman of the Senate Judiciary Committee and long-time FCA proponent.
While the Subcommittee heard a variety of unique perspectives during the hearing, the oral testimonies generally spoke to two primary proposals. The first proposal would require corporate whistleblowers to report frauds internally before filing FCA actions. The second would eliminate or narrow FCA liability for corporations that adopt a so-called “gold standard” corporate compliance program. Both proposals appear to stem from a 2013 US Chamber of Commerce report, which asserted that the FCA as currently written and implemented “incentivize[s] the filing of frivolous lawsuits and impose[s] irrationally excessive penalties for technical violations that occur despite businesses’ good faith efforts to comply . . . .” (more…)