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Whistleblowers may be compensated under Federal False Claims Act

When a company fails to properly handle its financial obligations, a myriad of issues could arise. In cases where companies cause the federal government to cover costs that the companies themselves should have paid, they may be violating the law. The Federal False Claims Act holds companies responsible for defrauding governmental programs. If an individual believes that a company is carrying out this type of fraud, that person may file a claim.

New York residents may be interested in such a case that recently came to a settlement in another state. Reports indicated that a whistleblower had claimed that two Progressive insurance companies had been carrying out actions that resulted in Medicare and Medicaid covering payments that the Progressive insurance companies themselves should have been paying. The situation arose because the companies had a "health first" policy that allowed policyholders to name Medicare or Medicaid as primary payers for insurance claims.

However, if a person has private insurance in addition to Medicaid or Medicare, then the government programs cannot act as primary payers for claims. Therefore, the insurance companies involved in this case should have handled numerous claims that Medicare and Medicaid ended up paying. An investigation into the incident led to the companies being charged, and they recently agreed to pay over $2 million to settle the case. It was noted that the whistleblower would receive more than $600,000 of that settlement.

When individuals believe that a company is carrying out wrongful actions against the government, they may feel the need to blow the whistle on the wrongdoing. Under the Federal False Claims Act, whistleblowers could potentially receive compensation for their assistance in such situations, as this case shows. If New York residents believe that they have a valid claim, they may wish to speak with knowledgeable attorneys.

Source: nj.com, "Insurance companies agree to pay $2M after false claims allegations," Noah Cohen, Nov. 15, 2017

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