What can you expect with false claims settlements? Here are some points to ponder.

There are provisions found in the False Claims Act that make it possible to file suit and seek false claims settlements. If you’re considering blowing the whistle for false claims you are aware of it’s important that your expectations are realistic.

Experienced attorneys strive to set reasonable expectations with their clients and help them understand what could come to pass. Here is some basic information you should know about why defendants would be willing to settle and what could happen if there is a settlement.

Reasons Providers Settle Instead of Fighting Suits

Physicians, hospitals, hospice centers, and nursing homes may choose to settle a false claim lawsuit for many reasons. Some of the most common are:

• Minimize legal fees: The legal costs related to fighting the claim may be prohibitive. If the case continues for a long time, those fees could be more than the amount of the original suit. When that is a real possibility, settling now translates into lower legal fees.
• Reduce the amount paid to Medicare and/or the plaintiff: Defending against a lawsuit and ultimately losing does mean the risk of paying a higher figure to the plaintiff or repaying a more substantial sum to Medicare. In many cases, it would be both. When the parties who filed the suit are willing, negotiating a settlement could result in paying a much smaller amount.
• Avoid negative publicity: Reputation is essential in the health care field. If word gets around that someone has intentionally falsified claims it could take years to undo the damage. Quickly and quietly settling contains the potential damage and makes a public relations disaster less likely.
• No admission of guilt: The terms of many settlements exclude any requirement for the provider to admit guilt. That’s important, as it minimizes the risks of losing the license to practice or to operate a facility.
• A matter of time: A settlement may be the best solution just because of the time involved. Next to the financial resources needed to fight the suit, allocating time for this action means less time to generate revenue or keep the facility or practice going.

Whatever the reason is for settling, the decision to settle impacts the plaintiff. The degree of that impact depends on what happens next.

Terms and Provisions within False Claim Settlements

Every settlement associated with a false claims lawsuit will include specific provisions. Those terms relate to the plaintiff as well as the defendant. Depending on the nature of the claim and the original amount sought, the terms and provisions may or may not include specific actions that one or both parties agree to observe.

The terms of payment are one example. In some cases, the plaintiff agrees to pay the settlement amount by a specific date. They can pay the sum in a series of installments leading up to the due date or pay the entire amount at one time. Depending on the number of plaintiffs, a trustworthy third party receives the payments and disburses the funds based on an approved schedule.

The plaintiff may agree to refrain from taking any further legal action against the defendant. The wording on this provision must be exact. A broad provision could prevent the plaintiff from pursuing action related to the same plaintiff but for a different cause. That includes claims prosecuted under laws other than the False Claims Act.

Sealing the terms of the settlement is another common approach. With this particular provision, the plaintiff and the defendant agree to not reveal the details of the settlement or talk about the case in anything other than the broadest terms. The goal is often to protect the privacy of all parties involved in the original suit.

The Bottom Line:  What about the Compensation?

What can you expect in the way of compensation? The plaintiff may agree to pay all legal fees, including the funds owed to your legal counsel. That’s good news since the plaintiff has no legal fees to pay.

In terms of how much the plaintiff may receive, a lot depends on whether a federal agency is among the relators and the degree of agency involvement. When the suit does not include a government entity, the relator who launched the lawsuit is by law allowed to receive somewhere between 15% and 25% of the settled amount. The remainder goes to Medicare.

Whistleblowers who pursue a case after the government chooses not to act may receive somewhere between 25% and 30% of the settlement amount. A writ of qui tam makes this possible. The private citizen comes forth with information and assists in pursuing a case of false Medicare claims issued by a health care provider.

Do you have some involvement with a claim you believe to be false? Contact the Bothwell Law Group online and get more information about false claims settlements and what to expect.