Intermountain Healthcare Seeks to Dismantle the DOJ’s Chief Civil Fraud Enforcement Tool

Lawsuits initiated by whistleblowers under the False Claims Act.

Last Wednesday, in a petition to the United States Supreme Court, Intermountain Healthcare (Intermountain), the largest healthcare provider in the Intermountain U.S., made headline legal news by challenging the constitutionality of the False Claims Act (FCA), one of the government’s most effective laws for prosecuting Medicare fraud. 

Specifically, Intermountain targeted the False Claims Act’s qui tam provisions, which allow private citizens (known as whistleblowers, or qui tam relators) to launch a lawsuit in the government’s name when they have information that individuals and/or companies are submitting (or causing to be submitted) false claims to the U.S. government and its various federal agencies, including the Centers for Medicare & Medicaid Services (CMS). If the lawsuit is successful, the whistleblower is entitled to receive a share of the government’s recovery as a reward for coming forward. 

In the present case, Dr. Gerald Polukoff, MD filed a whistleblower suit against Intermountain and another hospital for allegedly helping a staff cardiologist perform unnecessary heart surgeries on Medicare patients. In defending against the case, Intermountain now contends that the whistleblower provisions of the FCA violate the U.S. Constitution’s Appointments Clause, which provides that certain public officials must be appointed by the U.S. government. Per Intermountain’s argument, whistleblowers who file FCA cases in the government’s name alleging fraud against the government are acting as officers of the U.S. without having been properly appointed.               

The odds of the Supreme Court granting Intermountain’s petition here are quite long. The four federal circuit courts of appeal to have considered the issue, including the 10^th Circuit Court of Appeals, which heard the Intermountain case, have all rejected arguments that the whistleblower provisions are unconstitutional under the Appointments Clause. What’s more, the Supreme Court has already held in its 2000 ruling Vermont Agency of Natural Resources v. Stevens, penned by the late Justice Antonin Scalia, that False Claims Act whistleblowers have legal standing to bring cases on the government’s behalf.   

What really gave this story its legs, however, is the fact that the individual who originally championed the argument that the FCA’s whistleblower provisions violate the Constitution’s Appointments Clause is none other than the current nominee for U.S. Attorney General, William Barr. Mr. Barr has been an outspoken critic of the whistleblower provisions of the False Claims Act, even after the provisions were upheld by the Supreme Court’s ruling in Stevens, and has famously called them “an abomination.” During his Senate confirmation hearings last week, Barr was asked by U.S. Sen. Chuck Grassley, a strong advocate for whistleblowers, if he renounced his previous criticisms. Barr affirmed that he would diligently enforce the False Claims Act, and that it is not an “abomination.”     

Although the chances may be slim that the Supreme Court will grant Intermountain’s petition, in light of the above obstacles, the stakes are always extraordinarily high when it comes to False Claims Act whistleblowers. Of the $60 billion that has been returned to the U.S. Treasury via successful False Claims Act lawsuits to date, 85 percent of this amount (or $51 billion) is attributable to qui tam lawsuits initiated by whistleblowers.

Our eyes, like many others, remain fixed on the Supreme Court as it reviews Intermountain’s certiorari petition and decides whether to consider anew the constitutionality of whistleblower lawsuits.

We will continue to track this case as it unfolds. 

Program Note:

Listen to Mary Inman on Monitor Monday, Jan. 28, 10-10:30 a.m. EST.

Comment on this article