Whistleblower Health Fraud Cases on Pace at DOJ

March 1, 2019, 9:37 PM

The Justice Department is just as active as it always has been in health-care fraud cases, usually brought by whistleblowers, despite last year’s memo that appeared to make it easier for the government to dismiss them.

This March 1 statement came from the official who wrote the memo.

The DOJ considers it an exception when it dismisses a False Claims Act case brought by a whistleblower, Michael Granston, director of the civil division’s fraud section, said March 1 at a Federal Bar Association conference.

Whistleblowers are often responsible for filing initial FCA cases. The government can then either intervene in the case, decline to intervene, or dismiss the case outright. The 2018 memo, penned by Granston, appeared to open the door for more DOJ dismissals of fraud cases and raised concerns among attorneys representing whistleblowers.

Granston reiterated the DOJ’s strong support for the FCA, both for its ability to protect the public health and to recover money that rightfully belongs to the government. The DOJ recovered $2.8 billion from FCA cases in fiscal year 2018, Granston said. Health-care FCA cases accounted for over $2.5 billion of total recoveries.

The DOJ intervenes in roughly 25 percent of FCA cases, according to a 2012 memo from the department that hasn’t been updated.

The memo doesn’t call on U.S. attorneys to dismiss more FCA cases, but asks them to consider dismissing FCA cases that weren’t legally or factually strong.

Frivolous Cases

The DOJ can always dismiss an FCA case if it’s considered frivolous or a waste of government resources, Granston said.

But he warned that defense attorneys trying to impose a burden on the government through litigation won’t automatically lead to a dismissal.

“Just because a case may impose substantial discovery burden on the government doesn’t mean it’ll be dismissed,” he said.

The DOJ’s decisions on whether to dismiss FCA cases are made on a case-by-case basis, Granston said, as opposed to part of a blanket policy.

Guidelines for Dismissal

Granston’s memo provided DOJ attorneys with a framework to evaluate when the department should dismiss whistleblower lawsuits, an authority granted to it under the FCA.

The Granston memo includes seven principles DOJ attorneys can use when deciding whether to dismiss a whistleblower lawsuit. For example, one principle calls for dismissing an FCA case if it risks wasting government resources.

The DOJ had the authority to dismiss FCA cases prior to the Granston memo, but lacked guidance on making that choice.

To contact the reporter on this story: James Swann in Washington at jswann1@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloomberglaw.com; Brent Bierman at bbierman@bloomberglaw.com

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