Pursuing a False Claims Act Case
The False Claims Act dates back to 1863, and it has never been busier than it is right now. In fiscal year 2025, the U.S. Department of Justice reported more than $6.8 billion in settlements and judgments, along with a record 1,297 new whistleblower lawsuits, according to its annual FCA announcement.
If blowing the whistle is on your mind, here's a few things you should know.
Key Takeaways
The False Claims Act targets people and companies that cheat government programs. That includes overbilling Medicare or Medicaid, charging for work that was never done, or lying to get government money. A company doesn’t have to mean to commit fraud to be held responsible. Ignoring obvious warning signs can be enough.
If you report fraud, you may be entitled to a reward. Employees and others who bring a case through a lawyer can receive between 15 and 30 percent of what the government recovers. Calling a fraud hotline alone doesn’t qualify you for a reward, so it’s worth talking to an attorney first.
The law protects you if you’re punished for speaking up. If you’re fired, demoted, or harassed for trying to stop fraud, you may be able to get your job back, receive double the pay you lost, and have your legal fees covered.
Businesses under investigation should act quickly. Keep every relevant document, and don’t take action against an employee you think reported you. Talk to a lawyer before responding to the government. Reporting a problem yourself early can lower what you owe.
What the False Claims Act Covers
The FCA, found at 31 U.S.C. §§ 3729 to 3733, makes a person or company liable for knowingly submitting a false claim for payment to the federal government, or causing someone else to submit one. It also covers false records used to support a claim and “reverse false claims,” where someone knowingly holds on to money they owe the government. The Anti-Fraud Coalition has a helpful plain-language fact sheet on the law’s history and purpose.
In Kentucky, most of the cases I see involve health care: billing Medicare or Medicaid for services that never happened, upcoding, kickbacks for referrals, or care provided by staff without the right credentials. However, the law also reaches defense contractors, grant recipients, pandemic loan borrowers, and importers who underpay customs duties.
“Knowingly” does not require proof of intent to defraud. Actual knowledge, deliberate ignorance, or reckless disregard of the truth is enough. In 2023, the U.S. Supreme Court held in United States ex rel. Schutte v. SuperValu Inc. that the question is what the defendant actually believed when it submitted the claim, not whether some reasonable reading of an unclear rule could justify it after the fact.
The financial exposure is serious. A defendant faces three times the government’s damages plus a civil penalty for every false claim, adjusted each year for inflation and currently starting above $14,000 per claim, as the DOJ Civil Division explains. When a business has submitted hundreds of claims, the penalties alone can exceed the actual loss.
How a Whistleblower Case Moves Forward
A private citizen, called a relator, can file a qui tam lawsuit on the government’s behalf. A few parts of the process surprise most people I talk to:
The complaint is filed under seal in federal court and served on the government, not the company. The seal lasts at least 60 days and is often extended for many months while the government investigates.
You must give the government a written disclosure of substantially all the material evidence you have.
If the government intervenes, the relator generally receives 15 to 25 percent of the recovery. If it declines and the relator wins on their own, the share rises to 25 to 30 percent.
The first person to file usually wins the race. Later relators with related claims are generally barred, and cases built on information already in the news or public audits can be dismissed unless you qualify as an original source.
You can report suspected Medicare or Medicaid fraud through the HHS Office of Inspector General hotline, but a hotline tip alone does not make you eligible for a relator’s share. Only a filed qui tam complaint does that.
Kentucky does not have its own qui tam statute. State Medicaid fraud falls under KRS 205.8451 to 205.8483, but because Medicaid is jointly funded, a whistleblower reward in Kentucky typically comes through the federal FCA.
You also have protection if your employer pushes back. Section 3730(h) covers employees, contractors, and agents who are fired, demoted, or harassed for trying to stop a violation. Remedies include reinstatement, two times back pay with interest, special damages, and attorney’s fees, and you generally have three years to file. Kentucky adds its own protection for good-faith reports of Medicaid fraud under KRS 205.8465.
What to Look for Before Filing
Louisville cases are filed in the Western District of Kentucky, which sits in the Sixth Circuit. The Sixth Circuit is one of the stricter courts when it comes to pleading fraud with detail. In most cases, a relator must point to at least one specific false claim that was actually submitted, with a narrow exception for people who have personal knowledge of the billing itself. A general sense that the numbers are padded will not survive a motion to dismiss.
So in our first meeting, especially as it relates to health care or other sensitive or security matters, I ask about dates, claim numbers, internal emails, and who signed off on what. I also talk with clients about which documents they can safely keep. Copying patient records or secure files you are not authorized to access can create problems of its own.
Timing matters too. A case generally must be filed within six years of the violation, or within three years of when the responsible government official knew or should have known the facts, but never more than ten years after the violation.
Where Things Stand in 2026
Some defendants have argued that the qui tam provisions are unconstitutional. A Florida federal judge agreed in 2024, but the Eleventh Circuit reversed on September 1, 2026, joining the Fifth, Sixth, Ninth, and Tenth Circuits in rejecting that Appointments Clause challenge.
Other constitutional arguments are still working through the courts, but for now, whistleblower cases in Kentucky continue to move forward. Health care remains the top enforcement area, accounting for more than $5.7 billion of the 2025 recoveries, and customs and cybersecurity cases are growing.
Talk to a Lawyer Early
If you are thinking about reporting fraud, the earliest decisions tend to carry the most weight. At Chris Sanders Law PLLC, I help whistleblowers build cases that hold up in federal court.
If you have questions about a possible claim, contact me today to schedule a confidential consultation. We can talk through what you have, what your options are, and what a smart next step looks like for you.