Judge allows whistleblower FCA case against Omnicare

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Nursing assistant faces 3 years in prison for HIPAA crime
Nursing assistant faces 3 years in prison for HIPAA crime

A whistleblower who alleges Omnicare Inc. paid kickbacks to nursing homes did not violate the False Claims Act, a  judge has ruled.

Whistleblower complaints under the False Claims Act are often filed under seal, to give the government a chance to review the charges and determine whether to join the action. Omnicare filed a motion to disqualify whistleblower plaintiff Donald Gale, saying he violated the False Claims seal by mentioning the case to his wife and coworkers at Omnicare.

U.S. District Court Judge James S. Gwin didn't disqualify Gale, noting that his comments did not violate the seal because they were not public. Comments about lawyer meetings and oblique references to “whistles” were not direct or detailed enough to tip off Omnicare, Gwin said.

Omnicare figured out how Gale's comments related to the case only after the complaint was unsealed, the judge determined, saying this was proven by the timing of Omnicare's motion to disqualify. 

“[Omnicare] cannot say that it knew that Gale committed disqualifying conduct nearly three years ago, but decided for unstated reasons not to bring this motion until now,” Gwin wrote. “More likely, Omnicare did not actually know about this lawsuit in 2010, and made this motion as soon as it could connect the dots.”

Gwin's ruling comes during a debate about whistleblower awards. In April, the Centers for Medicare & Medicaid Services proposed a rule to increase the maximum payout for fraud whistleblowers. Award incentives are currently capped at $1,000, and the proposed change would increase that to 15% of the recovery, capped at nearly $10 million.

The American Health Care Association, however, thinks this award amount is too high, according to formal comments issued on June 28.

“Ten percent of any recovery, capped at $1 million, is adequate to incentivize persons to come forward with material information exposing allegedly illegal health care activities while fairly compensating them for their trouble and risk,” wrote Dianne De La Mara, vice president of legal affairs at AHCA.