Qui tam

Qui tam is the whistleblower provision of the False Claims Act (31 USC 3730) that allows a private individual (the relator) to file a civil suit on behalf of the United States against a person or entity alleged to have submitted false claims for federal payment. The case is filed under seal, the government investigates and elects whether to intervene, and if there is a recovery the relator receives a share (15 to 25 percent if the government intervenes, 25 to 30 percent if the government declines and the relator proceeds alone).

How qui tam works

A relator files a sealed qui tam complaint in federal district court along with a written disclosure statement that lays out the relator's evidence. The seal protects the relator's identity and gives DOJ the time to investigate before the defendant learns of the suit. The seal period is statutorily 60 days but routinely extended for months or years as DOJ works the matter. During the seal, DOJ may issue Civil Investigative Demands, interview witnesses, and coordinate with parallel criminal investigations.

At the end of the seal, DOJ elects to intervene (joining the case as the lead party), decline (allowing the relator to proceed pro se or with private counsel), or in rare cases move to dismiss the case under 31 USC 3730(c)(2)(A). Government intervention dramatically changes the case posture: intervention rates correlate strongly with settlements above $10M, while non-intervened cases settle or proceed under different economics. Procedural defenses include the public disclosure bar (31 USC 3730(e)(4)) which prevents parasitic suits based on already-public information, the first-to-file rule (31 USC 3730(b)(5)) which blocks duplicate suits, and the Rule 9(b) particularity standard at the pleading stage.

When qui tam applies

Qui tam applies anywhere the False Claims Act applies: any allegation that a defendant submitted (or caused the submission of) false claims for federal payment. The relator must be the "original source" of the allegations or must base the suit on information not publicly disclosed. Common relator profiles include former employees with insider knowledge of billing practices, compliance officers, competitors who observed market conduct, and patients. Healthcare qui tam cases concentrate in DME billing, pharmacy and PBM matters, hospital billing, and physician practices.

The defendant's exposure under qui tam

The seal mechanic means a defendant often does not know it is the target until DOJ unseals or makes contact. Pre-suit defense begins with the document hold, parallel investigation interview preparation, and CID response if one issues. Post-unseal, the defense framework depends on whether DOJ intervened and on the specific FCA theory (worthless services, factually false claims, false certification, AKS-tainted claims). Damages exposure is the same FCA framework (treble damages plus per-claim penalty) with the added dimension of a sophisticated relator's counsel motivated by a percentage recovery. Defense strategy emphasizes Rule 9(b) particularity at pleading, the public disclosure and first-to-file bars where applicable, and the materiality analysis under Escobar.

Related terms

• False Claims Act The federal statute under which qui tam suits are brought.
• Anti-kickback statute The criminal statute whose violations frequently produce the underlying allegations in healthcare qui tam suits.
• Stark law The physician self-referral statute that supports qui tam suits under a strict-liability framework.
• Extrapolation The statistical technique often used to scale damages in qui tam recoveries.

See also

• Practice area
  False Claims Act Defense

  The full FCA defense framework including qui tam mechanics, seal-period investigation, intervention analysis, and Rule 9(b) particularity defense.

• Practice area
  Subpoenas and CIDs Defense

  Civil Investigative Demand defense for the pre-suit qui tam investigation phase.

• Case result
  Oncology Dispensing FCA Dismissal

  Rule 9(b) particularity dismissal at the pleading stage in an oncology dispensing qui tam matter.