In a new Independence Institute working paper on the use and misuse of the False Claims Act (FCA), attorneys Mark W. Pearlstein and Laura McLane explain how an 1863 statute written to expose and punish Civil War contractors who billed for gunpowder and supplied kegs full of sawdust raises costs and threatens access to medical care.

The FCA authorizes private individuals to sue anyone they think is defrauding the federal government. Individuals filed more than 4,700 FCA actions between 2009 and June 2016. Awards range from $11,000 to $22,000 for each fraud detected, and the Act provides for treble damages. The spoils are divided among the person alleging the fraud, his attorneys, and the federal government. If the standard business practices of large firms come under fire, spoils can reach hundreds of millions of dollars. In 2014, the Department of Justice reported that FCA “recoveries” totaled $5.79 billion. Health care lawsuits accounted for $2.3 billion of that.

Read the whole article originally published in The Hill on September 28, 2017.