According to Nolan & Auerbach (2009), it is important that every citizen of the United States of America understands what is meant by the term false claim act. Apart from what it means, the false claim act was enacted for a number of reasons and its implementation had a significant impact on the medical billing. This paper aims at giving detailed information about the above issues about the false claim act.


False Claims act refers to law put in place by the government of the United States of America during the civil war. This act was meant to stop fraud against the government by people. Under this act, the individuals who have knowledge about corrupt deals by civil servants who defraud the government may witness in court and or sue these fraudulent people on behalf of the government. The person who sues on behalf of the government stands to benefit from contributing to the state's efforts to stop fraud and to prevent other potential government looters. Additionally, incase he or she wins the case, the whistle blower stand to gain financially at approximately 30% of the entire wealth that is recovered (Latham & Watkins, 2009).  

False claim act

Latham & Watkins (2009), stated that this act was put in place by United States of America government in the days of the civil war. The act is also referred to as the Lincoln Act was put in place in order to check fraud by the corrupt suppliers to the army. This was because the war made it impossible for the government it self to directly get involved in the fight against such fraud cases. In the recent days, the false claim act has been used by the government fight fraud in its various departments of government. It allows any person i.e. private person who knows about any fraud committed by anybody against then federal government to sue on behalf of the government in order to assist it reclaim its wealth that has been swindled by fraudulent people. Usually, the person who is first to table the case in court against the government looters is the one who is paid; 30 percent of the recovered wealth.

Roles of the false claim act

This act was founded way back in 1863 during the civil war. From then, the act has been important tool by the federal government of the United States of America in various ways. First, was put in place in order to prevent fraud by people who had been given supply contracts to the military by the federal government of the United States during the civil war in 1863 (Nolan & Auerbach, 2009).

Secondly, Nolan & Auerbach (2009) argued that the false claim act is also very important as it was used to reduce general loses by the federal government through corruption that led to depriving of its budget. High economic and financial loses through this vice was reported the united states congress, followed with similar report by the department of justice in 1980. The act was fine tuned to reduce the escalating rates of financial and economic loses due to fraud. This was hurting the federal government's budget and the general economy as hundreds of $ millions that added up to 50 billion dollars worth of loses resulting form fraud were recorded.

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The act was important in helping the federal government fill the gap in its efforts to identify and fight fraud. The gaps came about as a result of the huge nature of the federal government. The job of federal government protection of its treasury from escalating rates of advanced theft was too hard without the help of the general public. There was need to involve the public who were required to blow the whistle on the corrupt deals that deprived the government's economy (Nolan & Auerbach, 2009).

Lastly, the false claim act was voted in order to seek the counsel of the private citizens that was to go a long way in helping streamline the government's endeavor to stop fraud. This led to the improved working relationship between the government and the public. Consequently, the government had plenty of resources at its disposal to use in fighting fraud for it did not have to pay using its revenue (Latham & Watkins, 2009).  

Effects of false claim act on medical billing.

Nolan & Auerbach (2009) said that the general purpose of this act is to prevent fraud against the government. The majority of fraud cases revolve around the programs that are sponsored by the government. These include the programs that are meant to provide medical care and other health services to the civil servants.  First, the act has helped to streamline medical billing procedures in health institutions. This has been achieved through its potential to check fraud in government financed medical services and other health care arrangements.

The medical billing process has been made more transparent. There is small or no room for the health facilities to cheat on the medical tests results and the price for the medical products e.g. drugs and cost of there services to the government. Before the act was enacted, these used to happen and the government lost a millions of billions of dollars this form of fraud inform of nonexistent and/ or inflated medical bills for the civil servants e.g. military (Latham & Watkins, 2009).  

Nolan & Auerbach (2009) pointed out other examples of fraudulent acts  in relation to medical billing that have been eradicated including selling of unlicensed or reject drugs to the government, charging unnecessarily high medical fees, cases of medical personnel forging signatures that are required before the government  can release money to cater for the medical bills by civil servants among other federal medical bills.

Finally, there has been a notable effect by this act on the medical billing in cases that involve the health insurance companies. Before the act, the fraudulent health insurance companies colluded with private health providers to defraud the government by inflating the medical bills of patients that are sponsored by the government e.g. the military personnel. The act has brought an end to this vice (Latham & Watkins, 2009).  


The false claim act is the law that was put in place by the federal government in its efforts of curbing fraud by the military suppliers. It was later adopted for other general frauds prevention through the government-private individuals partnership facilitated by the act. The act had a number of positive effects that include reduction of financial loss by the federal government through fraud. Besides, the act also had effects on the medical billing. These include making the medical billing process transparent through prevention of falsification of results and fake drugs among others. All these vices were meant to inflate the medical bills that were to be catered by the federal government.

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