The U.S. attorney for the Eastern District of New York yesterday announced that the United States will intervene in a False Claims Act case that began in April 2007, when a qui tam relator first filed the whistleblower lawsuit under seal. In this case, the federal government is joining in the whistleblower’s lawsuit against the City of New York, seeking $2 million in damages, penalties, and costs for overcharging Medicaid.

In particular, according to the U.S. attorney’s press release, the United States has intervened in Ohlmeyer ex rel. United States of America v. City of New York, where the United States alleges that “the City of New York Department of Education (DOE) submitted false claims to Medicaid for psychological counseling services to special education students in the New York City public schools.” According to the release, “Medicaid pays DOE a flat fee of $223 for each student to whom DOE provides at least two psychological counseling sessions in a month. Medicaid pays nothing if an individual student receives fewer than two counseling sessions in a month.” Thus, the government alleges that, “between 2001 and 2004, DOE knowingly billed Medicaid for counseling services to students even though it provided fewer than two counseling sessions per month to individual students.”

Of course, these are just allegations at this stage, and the city can be expected to defend itself. This case is noteworthy, however, because it highlights that long-quiet qui tam cases sometimes take many years to mature into a government intervention decision. The lesson here is that a relator and relator’s counsel must be patient and plan for an initial time horizon of a few years to as many as five or six years.