Significant Changes To Federal False Claims Act Introduced By Senator Grassley

On September 12, Senator Charles Grassley (R-Iowa), ranking member of the Senate Finance Committee, proposed Senate Bill 2041 to amend the federal False Claims Act ("FCA") in ways which would directly impact qui tam suits initiated against health care providers.

In his statement on the Senate floor, Senator Grassley stated that the proposed "False Claims Act Correction Act of 2007" ("S. 2041" or "the bill") is partly a response to recent federal court decisions that have weakened the congressional intent of the 1986 FCA amendments. The1986 amendments were designed to increase the incentives for whistleblowers who file false claims complaints.

For example, S. 2041 seeks to eliminate the requirement that a false claim be presented directly to a government employee for payment before liability attaches. In 2004, the D.C. Circuit Court of Appeals ruled that the federal government could not recover certain money because the defendant submitted the purported false claim to employees of