This is a question or concern we hear a lot: can I file a healthcare or government fraud case without any tangible evidence?

Yes! This happens quite a lot, actually.  

Here are key points concerning evidence and FCA cases that you should know:

  • You don’t need a lot of evidence to file a healthcare or government fraud case, but more evidence makes it more likely that the government conducts a thorough and successful investigation. It can also increase your relator’s share if the case settles.
  • You do need a lot of evidence to litigate it if the government declines to intervene because the Court will dismiss your case if you can’t show knowledge or proof of the entire fraudulent scheme.
  • Failure to gather evidence in the right way can result in costly claims and lawsuits against you.
  • It is always better to talk to an attorney before you start collecting evidence so they can advise you on how to stay out of trouble. 

Many of our clients who witnessed fraud firsthand have no evidence to support it. Often, whistleblowers are surprised to have had their employment terminated as a result of their investigations and complaints. They believe they have discovered a mistake, not fraud, and they present their findings internally with expectations that their superiors will acknowledge and correct the error. 

Instead, they are unceremoniously escorted out of the building. Needless to say, gathering evidence for a lawsuit is not a consideration until it is too late to do so. 

Physical evidence or not, if you spot “mistakes” that could actually be fraud, it never hurts to get a confidential evaluation from an attorney.

Evidence Desired, Not Required

In a perfect world, our clients would have a mountain of evidence that we can gift wrap and present to the government. Good evidence simplifies matters tremendously. The more evidence in your possession, the more likely that the government can prove its case, intervene in your case, and settle the case. Plus, it can increase the relator’s share.

But it is not required to file a False Claims Act case. Nor is it an automatic death knell for your lawsuit. The government has various ways of obtaining much of the necessary evidence itself. For example, it can collect Medicare billing data from CMS. It can issue a Civil Investigative Demand to a defendant for documents. It can interview witnesses to build its case. 

We have had the government intervene and settle in many of our cases where our clients had nary a scrap of evidence to provide besides their own knowledge and testimony.

What evidence do I need to file a healthcare or government fraud case?

Simply put, you only need enough evidence to plausibly make the allegations in your complaint and to set the government investigation on the right track. A False Claims Act case alleges that someone is committing fraud against the government. These are serious accusations, and the facts you are alleging are sworn statements.

Pursuant to Federal Rule of Civil Procedure 11, you may file a lawsuit if “the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery.” It is not enough to merely guess that fraud is occurring. 

“There is no way they got the government contract without cheating.” “That guy has way more money than his peers; he must be getting a kickback or committing fraud somehow.” “That doctor only refers patients to my competitor; I bet they have an illegal arrangement.” These are all arguments we have heard before from potential clients. But without any knowledge or evidence of fraud, it would be unethical to file a lawsuit based on such speculation. 

Moreover, if you are wrong, you may be subject to sanctions under Rule 11 or under the False Claims Act, which requires relators to pay the other side’s attorney’s fees if “the court finds that the claim of the person bringing the action was clearly frivolous, clearly vexatious, or brought primarily for purposes of harassment.”

But this does not mean you have to know every detail of the fraud, either. Rarely do whistleblowers have access to all the pieces of the puzzle. For example, a nurse may know that her doctor is circling the wrong billing codes on a superbill and entering inaccurate information, but she may not know how the billing is actually being performed. Looking back at Rule 11, she can plausibly allege this claim because it “will likely have evidentiary support after a reasonable opportunity for further investigation or discovery.” 

Even without any documentary evidence in hand, she can bring the case to the government, who can obtain the claims and compare them to the patient files.

If the government is not convinced that the whistleblower has any real knowledge of fraud occurring, there is no obligation to investigate the claim. If the government investigated every unsubstantiated tip it receives, there would be few resources remaining for the real cases. 

It is up to experienced whistleblower lawyers to know what information will help the government in its investigation and to get that from their clients or through independent investigation. 

There are gray areas, and it takes good qui tam counsel to know when they have sufficient information to file a case. Most False Claims Act lawyers work on contingency, meaning they have little incentive to file cases that are unlikely to result in an award. They also have reputations to consider, as nobody wants to be known as the lawyer who cried wolf, filing qui tam cases alleging fraud only to discover that no fraud occurred.

How much evidence do I need to litigate a False Claims Act case if the government declines to intervene? 

If the government intervenes in your case, then that usually means that the government has been able to obtain enough evidence to prove its case. 

But what if the government declines to intervene? Although it does happen on occasion, rarely does the government share its evidence with relators in a declined case. And so whether we can and should go forward with litigation generally depends on what evidence the whistleblower brought to the case.

The short answer is that you need enough evidence to not only plausibly allege fraud but to do so with specificity. Under Federal Rule of Civil Procedure 9(b), courts require not only knowledge of the underlying fraud, but that false claims were submitted to the government for reimbursement. 

Now, not only is a scrap of evidence no longer enough, but even a stack of evidence may be insufficient if you don’t have proof of all the elements of your claim.In the example of the nurse above, there is a high probability that her case will get dismissed for lack of specific knowledge that the falsified documents resulted in false billing, even if she has a hundred examples where the doctor circled the wrong code on a superbill.

Still, this does not mean that a whistleblower has to have tangible evidence. 

Courts want to see that you have sufficient knowledge and are not just guessing, about the who, what, where, when, why, and how of the fraud. While a specific example of a false claim is preferred and is by far the easiest way to meet this standard (a claim was submitted for this service on this date, for that patient, by that provider), courts have permitted cases to go forward based on an “indicia of reliability” standard. If the relator worked in the billing department, for example, and she had the opportunity to compare the patient files with the resulting billing, even if she did not take any particular examples with her, she could allege the entire fraudulent scheme with specificity. Then the relator can get what she needs in discovery to prove her case.

How can I get the evidence I need?

An issue fraught with danger is the gathering of evidence to support your complaint. You want to have enough evidence to convince the government to investigate, and ideally, you even have enough evidence to survive a motion to dismiss if the government declines your case.

But collecting evidence subjects you to potential liability and counterclaims as defendants don’t generally like it when you take their information and share it with the government.

As much as we would like to prepare some bright-line rules for you about what you can and cannot do to collect evidence, these determinations must be given on a case-by-case basis. Different courts and judges have different views on this topic. 

Available counterclaims can depend on if the whistleblower is a fiduciary (such as a C-Suite executive) or has a contract or severance with a nondisclosure agreement. Even the type of documents at issue can change the analysis, such as whether they are trade secrets or proprietary information.

Courts tend to side with whistleblowers when it comes to taking documents to support their False Claims Act cases, but there are many potential pitfalls. Here are some general tips that apply to most situations:

  • Only take evidence that falls within the scope of your employment. In other words, if you have to borrow a key or a password to get the evidence, you are probably better off leaving it alone.
  • Only take evidence that you need to support your case. In other words, do not copy your entire hard drive with a plan to sort through it later, because the courts are not as forgiving about taking documents that are unrelated to your claims.
  • Do not use the information for any purpose except for whistleblowing, and do not share it with anyone except for your lawyers and the government. It is not always enough for whistleblowing to be one reason you took documents; it often has to be the only reason you took documents.
  • There is a HIPAA exception to whistleblowers, as long as you are sharing the information only with lawyers and the government. There is no need to redact patient information, and doing so could render the evidence mostly worthless.
  • It is rarely a good idea to record conversations. Although they may help you, there is also a chance they can hurt you. Without being able to see the person as they speak or have access to the full context of the conversation, it can be pretty easy for a defendant to spin it another way. And most importantly, it is not legal in every state to record a conversation without the other person’s knowledge. Don’t risk it.
  • Once the case is filed, the government will tell you to stop investigating. It is important that you build your case before you file, not after.
  • Get permission, not forgiveness. Good attorneys can advise you as to the best way to gather evidence, but if you try to do it on your own and make mistakes, you can’t put the toothpaste back in the bottle.

Contact a False Claims Act Attorney Today

In sum, it is best to contact False Claims Act attorneys before you leave your job so that they can guide you in your investigation. They can tell you what evidence is most needed to support your case and have you obtain it in a way that limits your liability for countersuits. 

But if it is too late for that, don’t assume that means you cannot file a case. The government wants to know whenever fraud is occurring, and it would rather do the digging itself than continue to lose money to bad actors.

Are you a potential whistleblower who needs specific guidance on this topic for your situation? Call Bracker & Marcus LLC at 770-988-5035 to schedule a free evaluation.