The False Claims Act (31 U.S.C. §§ 3729 – 3733) (the FCA) penalizes individuals and companies (often government contractors) who defraud the government by either submitting a false request for payment or avoiding payment of an obligation to the government. In May 2009, the Department of Justice (DOJ) and Department of Health and Human Services jointly announced the formation of the Health Care Fraud Prevention and Enforcement Action Team, or the “HEAT” initiative, to specifically target fraud in the health care industry, and using the FCA as a primary tool.
According to the DOJ’s own estimates, the HEAT initiative has been successful. Indeed, the DOJ claims that in only five years, it has recovered more than $13.4 billion based on its pursuit of FCA and other claims against alleged perpetrators in the health care industry.
It is no shock based on those numbers that the DOJ remains as determined as ever to bring the “HEAT” against the health care industry. For example, on Feb. 25, 2014, the DOJ announced a $15.5 million settlement under the FCAagainst a chain of diagnostic testing facilities in New Jersey and New York. The DOJ alleged that the facilities falsely billed federal and state health care programs for tests that were not performed or not medically necessary and by paying kickbacks to physicians. Three whistleblowers received over $2.5 million in connection with the settlement.
On Feb. 10, 2014, the DOJ announced the settlement of FCA allegations against an addiction clinic, clinical lab, and two doctors in Kentucky for $15.75 million, approximately $12 million of which represent funds to be refunded to the federal government. The settlement arose out of allegations that the targets defrauded Medicare and Kentucky Medicaid by seeking reimbursement for unnecessary tests or tests that were more expensive than those performed.
These and other settlements demonstrate the DOJ’s ongoing commitment to aggressively pursuing allegations of fraud in the healthcare industry.
United Auto Workers (UAW) and Volkswagen (VW) Efforts to Establish First Works Council in the U.S. Fails
The United Auto Workers (UAW), which already represents most of the largest carmakers in the United States, was unsuccessful in its efforts to unionizeVolkswagen’s (VW) plant in Chattanooga, Tennessee. What makes this noteworthy is that leading up to the February 14th representation election, the German company was actually campaigning for the UAW not against it in an employer-union alliance seldom seen in this country.
While the “big three” American carmakers (General Motors, Ford, and Chrysler) are all unionized, foreign carmakers have avoided unionization by locating their plants in Southern states with strong Right to Work laws. Volkswagen, however, considers the creation of a so-called “works council” a crucial element of its business. Works councils are common under German law, and Volkswagen has established works councils at all its foreign plants, with the exception of Chattanooga and China.
Under these works councils, all workers in a factory regardless of position and whether they are unionized or not, help decide things like staffing schedules and working conditions, while the union bargains on wages and benefits. They also have the right to review certain types of information about how the company is doing financially, which means that they tend to be more sympathetic towards management’s desire to make cutbacks during tough financial times. Each Volkswagen plant throughout the world sends its delegates to a global works council that influences which products the company makes and where. This arrangement would have represented a new experience for the UAW, unlike its relationship with Chrysler, General Motors and Ford, which would have involved sharing control with the works council.
A tough question for Volkswagen and the UAW is whether a works council would be legal in the United States without a union. There is no provision in the NLRA for the kind of German-style works council Volkswagen seeks. Volkswagen’s best option for creating a works council would have been for its workers to accept UAW representation. Volkswagen must now rethink its options in seeking a way to create a works council. Options include talking with a different union that might be more popular with its workers or encouraging workers to organize their own independent union. Another option would be moving ahead without a union and risking an NLRB challenge.
After the UAW was defeated by a 712-626 vote in its bid to represent workers at the Volkswagen plant, the UAW promptly requested a new election claiming Tennessee politicians and outside organizations coordinated and vigorously promoted a coercive campaign to sow fear and deprive Volkswagen workers of their right to join a union. Senior state officials including United States Senator Bob Corker, TennesseeGovernor William Haslam, State House Speaker Beth Harwell, and State House Majority Leader Gerald McCormick, made statements in an effort to convince the workers to reject the UAW. The UAW’s alleges this was part of an unlawful campaign which included publicly announced and widely disseminated threats by elected officials that state-financed incentives would be withheld if workers exercised their right to join the UAW’s ranks. However, on February 25, 2014, a group of Volkswagen workers sought to intervene in the UAW‘s bid, and argued that the election results should stand.