Certified in Healthcare Compliance (CHC) Practice Test 2025 - Free CHC Practice Questions and Study Resources

The False Claims Act is the piece of legislation that made qui tam lawsuits possible. This act permits private citizens to sue on behalf of the government if they know of fraudulent activities involving federal funds. The term "qui tam" comes from a Latin phrase meaning "he who brings a case on behalf of the king" and allows whistleblowers to report and take action against individuals or businesses that attempt to defraud government programs, especially in the healthcare sector.

The act not only serves as a means for the government to recover funds lost to fraud but also incentivizes whistleblowers by allowing them to receive a percentage of the recovered funds. This mechanism is essential in promoting compliance and accountability within healthcare and other sectors that deal with federal resources.

In contrast, the Fair Labor Standards Act primarily addresses wage and hour laws, the Freedom of Information Act deals with public access to government information, and the Emergency Medical Treatment and Active Labor Act focuses on patient care standards in emergency situations. None of these laws establish the framework for whistleblower lawsuits regarding fraudulent claims against the government, which is the core function of the False Claims Act.