Corrin Myers is a part-time law student at the Sturm College of Law at the University of Denver and expects to graduate in May 2026. While attending the University of Northern Colorado, Mrs. Myers double majored and earned a Bachelor of Arts in Liberal Arts and in Social and Behavioral Sciences.
Before joining The Employment Law Group® law firm, Mrs. Myers worked as a paralegal for five years in several practice areas including property law and business law.
If you face retaliation for raising concerns about cybersecurity violations, you may be protected by a variety of federal laws depending on the circumstances, including the False Claims Act; the Sarbanes-Oxley Act; and the Defense Contractor Whistleblower Protection Act as amended by the National Defense Authorization Act. In addition, state law may offer you additional protections.
If you’re blowing the whistle on a federal contractor — especially if you’re an insider whose complaints have been ignored — the federal False Claims Act is likely the first place you should look for a reward. This requires filing a lawsuit. Other options may be available, including state versions of the FCA and, if your employer has investors who are being deceived, the Dodd-Frank Act. An experienced attorney can advise you where to start.
Government contractors are required to follow the terms of their contracts, which often include security and reporting requirements, either by direct inclusion or by reference to the Defense Federal Acquisition Regulation Supplement (DFARS) or another set of standards. Requesting payment from the government while intentionally violating those standards, or signing a contract while intending to ignore the standards, may be viewed as a false or fraudulent claim or statement under 31 U.S.C. § 3729(a)(1), where these FCA violations are defined.
A classic instance would be where a contractor isn’t applying appropriate cybersecurity standards and fails to disclose its non-compliance — or falsely certifies that it is compliant. Another example would be failing to disclose a data breach through the proper channels. FCA liability may arise wherever a contractor or subcontractor fails to follow whichever regulations are incorporated into the relevant government contract.
Many of these security requirements are spelled out in the Federal Acquisition Regulation and its agency-specific supplements, including the DFARS. In addition, contractors should meet applicable standards set by the National Institute of Standards and Technology, and also must comply with broader data-security laws, including the Health Information Technology for Economic and Clinical Health Act (HITECH) and Health Insurance Portability and Accountability Act (HIPAA), both for sensitive medical information, and the Gramm-Leach-Bliley Act, for sensitive financial information.
To be clear, FCA liability may arise even if there’s no evidence of a hacking incident or data loss: In the Cisco case noted above, for instance, the simple vulnerability of key systems was the main issue. Under the FCA, such vulnerability must be found to be “material” — but in an environment where the U.S. president has declared cybersecurity to be “a top priority and essential to national and economic security,” any substantial corner-cutting should qualify.
First, report it within your company via whatever channel is specified for such security concerns — or if there’s no set procedure, through your chain of command. Federal contractors and subcontractors ultimately must report violations to their contracting agency or, depending on the information at risk, to the Defense Department. If reporting to the government isn’t your responsibility, press your company to do the right thing.
At this point it’s probably a good idea to speak with an attorney who can help you to report the problem to the government in a way that maximizes, first, your protection against blowback and, second, the chance that you’ll be rewarded for your integrity.
Different law firms have different procedures, but if you have solid evidence of fraud against the government you should be able to find an attorney who’ll give you a free consultation. If you choose to proceed under the False Claims Act the attorney may offer to represent you on a contingency basis, so that you have no out-of-pocket costs.
The FCA is an unusual and powerful law: It allows you to sue on behalf of the U.S. government to compensate taxpayers for payouts that a company received under false pretenses, including by lying about cybersecurity — and violators face a steep punishment that can include triple damages plus substantial extra penalties. Federal prosecutors must investigate your allegations, and if your complaint leads to a monetary recovery you’re entitled to at least 15 percent of the resulting amount.
Meanwhile, the FCA protects whistleblowers with a robust anti-retaliation provision that may require your employer to make you whole for the ill effects of any punishment you receive for speaking out about possible fraud against the government. Other laws may apply, too.
False Claims Act complaints are filed under seal in federal court, meaning that they remain secret for at least 60 days and usually much longer. A lawyer can help you with this. The secrecy allows the government to start its investigation and to decide its approach, which could include criminal prosecution.
To get the government’s full attention, an FCA complaint should make detailed allegations that are likely to survive a judge’s early scrutiny, and should be filed in a federal district where the U.S. Attorney’s Office is likely to be interested in the case. Because of this, you should choose an experienced FCA attorney who can guide you through the process.
If you report via an FCA complaint, the government will eventually need to know who you are. There are mechanisms that may keep your name from your employer and from the public — including the initial secrecy of the filing — but few FCA whistleblowers remain anonymous forever. This is a good topic to discuss with an attorney. FCA cases take a long time, and some whistleblowers stay under the radar for years.
Under the FCA and other laws, it is generally illegal to retaliate against whistleblowers, including by firing them. If you use the FCA to disclose cybersecurity failings, your role as a whistleblower may remain unknown for some time. You may still face retaliation for raising concerns internally, of course — but again, the law should protect you. If you are punished, you may have a viable claim for damages and legal fees.
If you know about cybersecurity failures at a federal contractor, please contact us. We would like to help you.
» “Changing Currents in Employment Law” will take place on October 25, 2023. Click here for more details and registration options.
(Transcribed and edited lightly by The Employment Law Group)
R. Scott Oswald:Welcome to our preview of this year’s “Changing Currents in Employment Law,” the D.C. Bar’s three-hour fast-paced fall CLE covering cutting edge topics in employment law.
I’m Scott Oswald. I am faculty chair of “Changing Currents in Employment Law,” and I am joined by Christopher Wilkinson who is a senior counsel at the law firm of Perkins Coie.
Hey, Chris!
Christopher Wilkinson: Hey, how are you doing, Scott? Glad to be here.
Oswald: Well, we are really happy to have you here as well – in particular speaking at this year’s “Changing Currents in Employment Law.”
Your panel is “Bias Cuts? How to Avoid (or Prove) Discrimination in a Mass Layoff,” and boy, Chris, we’ve seen – just all over the news – tech, firms, banks, and all kinds of big businesses downsizing really seemingly in droves lately. Tell us just a little bit about your panel and your co-panelists.
Wilkinson: Our panel will walk through the legal landscape facing employers as they embark on thinking through RIFs and layoffs and employees who may be subject to some form of downsizing. The legal landscape here is pretty complex, and the pitfalls for employers can be costly.
Oswald: So, if I’m in the audience, let’s say, and I come to Changing Currents and I’m hearing your panel this year, what can I expect to learn?
Wilkinson: Well, you can expect to learn a lot of different things. There are questions that come up on any of these issues: What’s the current state of the law? How federal and state laws may apply when you’re thinking about RIFs? What actions can employers take that can ensure that they’re not targets of potential discrimination claims?
But, you know, one of the things in my experience is that these RIF decisions move lightning fast and can get messy, so this presents opportunities for lawyers representing workers. The panel will really walk through something that moves pretty quickly – more for employers themselves. Employees also can be at risk for mistakes that employers will make.
Oswald: Chris, thank you. I am really looking forward to seeing you at this year’s “Changing Currents in Employment Law.”
It’ll be October 25th, 2023, at the D.C. Bar headquarters. You can join us live or virtually on your Zoom screen. We look forward to seeing you then.
———-
R. Scott Oswald is managing principal of The Employment Law Group, P.C. Christopher Wilkinson is senior counsel at Perkins Coie LLP.
» “Changing Currents in Employment Law” will take place on October 25, 2023. Click here for more details and registration options.
» “Changing Currents in Employment Law” will take place on October 25, 2023. Click here for more details and registration options.
(Transcribed and edited lightly by The Employment Law Group)
R. Scott Oswald:Welcome to our preview of this year’s “Changing Currents in Employment Law,” the D.C. Bar’s three-hour fast-paced fall CLE covering cutting edge topics in employment law.
I’m Scott Oswald. I am faculty chair of “Changing Currents in Employment Law,” and I am joined by Nathaniel Glasser, who co-leads the law firm of Epstein Becker & Green’s COVID-19 Compliance practice group.
Nathaniel, hello!
Nathaniel M. Glasser: Good afternoon.
Oswald: You’re speaking on a panel entitled “The Long Haul: Accommodating ‘Brain Fog’ and Other Long COVID Symptoms in the Workplace.”
We know that upwards of 23 million Americans suffer from long COVID. Tell us a little bit about your panel and your co-panelists.
Glasser: Thanks, Scott. As you said, millions of Americans still suffer the effects of what’s being called long COVID, which is essentially an amorphous set of symptoms that linger after a COVID-19 infection. Many of these individuals may find it hard to perform their jobs. Our panel is going to discuss the implications of long COVID in the workplace, how it relates to the Americans with Disabilities Act, and give some tips and tricks for employers and employees for engaging in the interactive process when it comes to matters of long COVID.
I practice exclusively management-side employment law, and throughout the pandemic, I’ve counseled employers on developing COVID policies and protocols, including how to address requests for reasonable accommodation under the ADA or Title VII — particularly when it comes to COVID-19.
My co-panelist, Yaida Ford, is a trial lawyer who represents employees in civil rights matters. She was one of those few people who went to the office every day to manage COVID. So, I think together we’re going to bring insight from both the employee and the employer perspective as to how to address these issues.
Oswald: So, you’ve kind of driven into this subject and thought about the panel and what you might talk about. If I’m in the audience, what are one or two things that I might take away from the panel?
Glasser: We expect attendees of our panel to gain a better understanding of long COVID, the types of symptoms, and how those symptoms may interfere with job performance and to learn how to best engage in the interactive process when that underlying diagnosis is long COVID. Then in addition to all that, they’ll gain an understanding of the various types of accommodations that may be available and suitable for people with long COVID.
Oswald: Nathaniel, it sounds terrific. Thank you.
We look forward to seeing each of you on Wednesday, October 25th, 2023, either in-person or virtually for this year’s 2023 D.C. Bar’s “Changing Currents in Employment Law.”
We look forward to seeing you then.
———-
R. Scott Oswald is managing principal of The Employment Law Group, P.C. Nathaniel M. Glasser is an attorney at Epstein Becker & Green, P.C., and co-leads the firm’s COVID-19 Compliance practice group.
» “Changing Currents in Employment Law” will take place on October 25, 2023. Click here for more details and registration options.
A Riverside, California skilled nursing facility and its management healthcare services company agreed to pay California and the US $3.825 million to resolve allegations that they paid kickbacks to physicians to induce referrals, the U.S. Department of Justice announced Wednesday.
The companies will pay $3,228,300 to the federal government and $596,700 to California.
Between 2009 and 2019, Alta Vista Healthcare & Wellness Centre, LLC allegedly gave physicians “extravagant gifts, including expensive dinners for the physicians and their spouses, golf trips, limousine rides, massages, e-reader tablets, and gift cards worth up to $1,000” under the direction of Rockport Healthcare Services, a news release from the Justice Department says. The groups “submitted and caused the submission of false claims to Medicare and Medicaid,” prosecutors said.
“Separately, Alta Vista paid these physicians monthly stipends of $2,500 to $4,000, purportedly for their services as medical directors. At least one purpose of these gifts and payments was to induce these physicians to refer patients to Alta Vista,” according to the U.S. Attorney’s Office
The settlement came as a result of a whistleblower complaint. A former Alta Vista accounting employee, Neyirys Orozco, in 2015 filed the complaint and will receive $581,094 “as her share of the federal government’s recovery in this case,” the Justice Department said.
» View full story on USA Today
[OFFICIAL ANNOUNCEMENTS]
From the U.S. Department of Justice (June 21, 2023)
Alta Vista Healthcare & Wellness Centre, LLC (Alta Vista), a skilled nursing facility in Riverside, California, and its management company, Rockport Healthcare Services (Rockport), have agreed to pay the United States and California a total of $3.825 million to resolve allegations that they submitted and caused the submission of false claims to Medicare and Medicaid by paying kickbacks to physicians to induce patient referrals. The settlement amount was negotiated based on Alta Vista’s and Rockport’s lack of ability to pay.
The Anti‑Kickback Statute prohibits offering or paying remuneration to induce the referral of items or services covered by Medicare, Medicaid, and other federally funded programs. It is intended to ensure that medical decision-making is not compromised by improper financial incentives and is instead based on the best interests of the patient.
» View press release on Justice.gov
From the State of California Department of Justice (June 21, 2023)
OAKLAND — California Attorney General Rob Bonta, in partnership with the U.S. Department of Justice, today announced a $3.8 million settlement with a Riverside skilled nursing facility, Alta Vista Healthcare & Wellness Centre (Alta Vista), and its management company, Rockport Healthcare Services (Rockport), to resolve allegations of Medi-Cal fraud. The defendants are accused of violating the federal Anti-Kickback Statute and False Claims Act, as well as the California False Claims Act, by paying illegal kickbacks to doctors to encourage them to refer Medicaid and Medi-Cal patients to Alta Vista. As part of this settlement, the United States will receive $2.8 million and California will receive $596,700, based on the proportion of losses to state and federal funds.
“Decisions that affect patient health should be made solely on the basis of a patient’s best interest,” said Attorney General Bonta. “When a healthcare company cheats and offers kickbacks to gain an unfair advantage, it jeopardizes the health and well-being of those who rely on its services. These illegal schemes also make public services and programs costlier, and ultimately waste valuable taxpayer dollars. Today, I thank the U.S. Department of Justice for teaming up with the California Department of Justice on this case. This settlement demonstrates our commitment to protecting the integrity of Medi-Cal, and the taxpayer dollars that support the program.”
» View press release on OAG.CA.gov
[ADDITIONAL COVERAGE]
From Bloomberg Law (June 21, 2023)
Alta Vista Healthcare & Wellness Centre LLC, and Rockport Healthcare Services have agreed to pay the United States and California $3.8 million to resolve false claim allegations involving Medicare and Medicaid, according to a Wednesday news release.
» View full story on Bloomberg Law
From The Washington Gazette (June 21, 2023)
RIVERSIDE, Ca — Alta Vista Healthcare & Wellness Centre, LLC (Alta Vista) and its management company, Rockport Healthcare Services (Rockport), have agreed to pay a settlement of $3.825 million to the United States and California. The allegations against them are that they submitted false claims to Medicare and Medicaid by paying kickbacks to physicians to induce patient referrals. The negotiated settlement amount took into account the financial capacity of Alta Vista and Rockport.
» View full story on The Washington Gazette
From Patch (June 21, 2023)
RIVERSIDE, CA — A $3.8 million settlement agreement has been reached over allegations that a Riverside County skilled nursing facility paid illegal kickbacks to doctors as part of a fraud scheme, state officials announced Wednesday.
Alta Vista Healthcare & Wellness Centre on Garfield Street in Riverside, along with its management company, Los Angeles-based Rockport Healthcare Services, are accused of violating the federal Anti-Kickback Statute and False Claims Act, as well as the California False Claims Act, by paying illegal kickbacks to doctors for referrals of Medicaid and Medi-Cal patients to Alta Vista.
State and federal investigators found evidence that from January 2009 through December 2019, Rockport and Alta Vista paid the kickbacks — in the form of cash, gifts and salaries — to certain Riverside-area doctors. The referrals resulted in millions of dollars in Medicare and Medi-Cal reimbursement to Alta Vista and Rockport, according to California Attorney General Rob Bonta who worked with the U.S. Department of Justice in the investigation.
From The Press-Enterprise (June 21, 2023)
A Riverside skilled nursing facility and its management company will settle with the state of California and the U.S. Department of Justice for $3.8 million following accusations of paying illegal kickbacks to doctors, California Attorney General Rob Bonta’s office announced on Wednesday, June 21.
» View full story on The Press-Enterprise
From the Sierra Sun Times (June 21, 2023)
Alta Vista Healthcare & Wellness Centre, LLC (Alta Vista), a skilled nursing facility in Riverside, California, and its management company, Rockport Healthcare Services US DOJ(Rockport), have agreed to pay the United States and California a total of $3.825 million to resolve allegations that they submitted and caused the submission of false claims to Medicare and Medicaid by paying kickbacks to physicians to induce patient referrals. The settlement amount was negotiated based on Alta Vista’s and Rockport’s lack of ability to pay.
» View full story on the Sierra Sun Times
From McKnights (June 23, 2023)
A California skilled nursing facility run by the state’s largest nursing home owner has, in conjunction with its management firm, agreed to pay $3.8 million to settle kickback allegations brought by a whistleblower.
Alta Vista Healthcare & Wellness Centre in Riverside, CA, and Rockport Healthcare Services faced False Claims Act charges of paying physicians to send them more patient referrals over an 11-year period, the Department of Justice announced late Wednesday.
» View full story on McKnights
From The Center Square (June 21, 2023)
(The Center Square) — California is receiving a $3.8 million settlement with Riverside skilled nursing facility, Alta Vista Healthcare & Wellness Centre (Alta Vista), and its management company, Rockport Healthcare Services (Rockport), resolving an issue of alleged Medi-Cal fraud.
» View full story on The Center Square
From My News LA (June 21, 2023)
A Riverside-based skilled nursing facility will pay $3.8 million to the federal and state governments to settle a civil action alleging payments to doctors to provide referrals to the care and rehabilitation center, officials announced Wednesday.
“Decisions that affect patient health should be made solely on the basis of a patient’s best interest,” California Attorney General Rob Bonta said. “When a healthcare company cheats and offers kickbacks to gain an unfair advantage, it jeopardizes the health and well-being of those who rely on its services.”
Cole Wilson is a part-time law student at the Sturm College of Law at the University of Denver and expects to graduate in May 2026. Before joining The Employment Law Group® law firm, he worked at the National Environmental Health Association, a non-profit that credentials and supports environmental health workers.
Mr. Wilson graduated from Colorado State University with a bachelor’s degree in sociology.
By R. Scott Oswald
Yesterday’s decision from the U.S. Supreme Court in U.S. ex rel. Schutte v. SuperValu Inc. is a stark warning against aggressive billing by Medicare providers and other federal contractors: The False Claims Act, which punishes fraud against the U.S. government, doesn’t apply to honest mistakes — but internal debate about the propriety of certain billing practices, even where federal rules seem ambiguous, can count as evidence of FCA liability, according to the 9-0 opinion from Justice Clarence Thomas.
The decision elevates the voice of corporate whistleblowers who raise red flags on possibly fraudulent billing. It’s an unalloyed defeat for the original defendants in SuperValu, who had argued that in-house discussion is irrelevant so long as the federal contractor can retroactively offer a good argument that might have applied, regardless of whether anyone believed it at the time.
In his opinion, Thomas compares such post hoc rationalization to a driver who zooms past a signpost that requires “reasonable” speeds, even after a cop has warned him that it’s unreasonable to drive over 50 mph — and even though all the other cars are driving at 48 mph:
[I]f the same police officer later pulled the driver over, we imagine that he would be hard pressed to [avoid a ticket by arguing] that some other person might have understood the sign to allow driving at 80 mph. The same analysis applies here.
An End to Safeco Arguments
The brusque 15-page opinion, which also covers the consolidated case of U.S. ex rel. Proctor v. Safeway, Inc., guts several defense-side arguments that have bedeviled FCA cases in recent years.
In particular, it rejects the idea that FCA liability is governed by Safeco Insurance Co. of America v. Burr, a 2007 Supreme Court ruling that the SuperValu defendants had interpreted to mean that the requisite FCA scienter can’t exist if there was, at the time of overbilling, any objectively reasonable view of the rules that could have gotten them off the hook.
Safeco applies only to the Fair Credit Reporting Act and doesn’t reach the FCA, says Thomas — and anyhow, its teaching was misconstrued by the SuperValu defendants and the U.S. Court of Appeals for the Seventh Circuit below, to which he returned the case.
After a scant page of Safeco analysis, Thomas’ opinion bluntly holds that “we do not look to legal interpretations that respondents did not believe or have reason to believe at the time they submitted their claims.”
As a practical matter, the court’s decision in SuperValu makes it easier for FCA cases — which often are brought by whistleblowers in the name of the government — to survive summary judgment. And unlike a 2016 FCA opinion by Thomas, in Universal Health Services Inc. v. U.S. ex rel. Escobar, there seems to be little that the FCA defense bar can salvage in defeat.
“The FCA’s scienter element refers to respondent’s knowledge and subjective beliefs — not to what an objectively reasonable person may have known or believed,” writes Thomas definitively.
Background of the Case
SuperValu revolves around requests for reimbursement by SuperValu-owned pharmacies for their usual and customary price of prescriptions covered by Medicare, the federal insurance program. During the period in question, the pharmacies routinely offered big discounts to customers on many drugs, even as they often billed the government for the non-discounted retail price, which they portrayed as the norm. The consolidated case, Safeway, involves very similar facts.
Yesterday’s opinion cited “evidence that, at least some times and for some drugs, SuperValu made more than 80% of its cash sales for prices less than what was disclosed as its ‘usual and customary’ price,” while executives discussed staying “stealthy” for fear of undermining the amounts being reimbursed by the government.
The trial court granted summary judgment to SuperValu and the Seventh Circuit affirmed, agreeing that the pharmacies’ certification of their retail prices as “usual and customary” was factually false, and that the pharmacies may have believed it to be false — but that under a Safeco analysis, subjective belief and intent were irrelevant.
“What mattered, instead,” writes Thomas, summarizing the argument that he goes on to reject, “was that someone else, standing in [the pharmacies’] shoes, may have reasonably thought that the retail prices were what counted.”
The Common Law of Fraud
As in Escobar, Thomas interprets the FCA as largely a fraud statute that is construed under the well-settled meaning of common law fraud. “On their face and at common law,” he writes, “the FCA’s [scienter] standards focus primarily on what respondents thought and believed” — and under common law, the moment at which such thoughts and beliefs must be gauged is “when submitting the false claim.”
The pharmacies’ arguments to the contrary are unavailing, he says, and Justice Thomas devotes just a few pages to rebutting all of them. Even a common-law argument that purely legal misstatements aren’t actionable must fail, he says. In a homespun analogy, Thomas conjures a worker who falsely states that “the plumbing work that I did on your house complied with state law.” Because plumbers have unique knowledge of the work they did and how it related to requirements, says Thomas, such a statement isn’t merely one person’s interpretation of disputable, fuzzy rules — it’s also a representation of facts that can support a fraud claim.
By certifying their own “usual and customary” prices, he says, SuperValu and Safeway sound much “like our hypothetical plumber.”
Thomas’ analogies to everyday life may signal trouble ahead for FCA defendants. The now-discredited Safeco standard suggested that the government bears a responsibility to warn away contractors from every spurious interpretation of its rules before FCA liability can attach.
The speeding driver analogy, however, implies that contractors should look to road signs and common practice for their cues — and that if everyone else is driving at 48 mph, you can’t complain about being ticketed for driving at 80 mph.
Similarly, if you install leaky pipes it’s dubious to say that the regulations are so complex that they arguably allow leaky pipes.
At oral arguments in April, the justices talked about “easy” and “hard” FCA scienter cases, suggesting that SuperValu was easy because of evidence that pharmacy executives were deliberately overstating their normal prices despite subjective knowledge of the rules. If proven, that’s classic scienter.
The harder case, they posited, would involve some degree of uncertainty over the rules — and a conscious decision to act aggressively, perhaps after weighing the risks. After this decision, such a determination doesn’t look so hard after all: We look at the advice and examples that were available to the decision makers, and we apply common sense.
Were they driving just a tad fast? Or recklessly? What kind of ticket do they deserve?
In most cases, as long as the culprits’ feet were consciously on the pedal, their fate will rest in the able hands of a jury, which will be guided by Thomas’ easy-to-understand analogies.
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R. Scott Oswald is managing principal of The Employment Law Group, P.C.
(Note: This article has been edited slightly from the version published by Law360.)
On May 20, 2023, TELG staff participated in multiple races for the 2023 Lawyers Have Heart event, which raised funds for the American Heart Association. Participants had the option to take part in a 5k, 10k, or Fun Walk around West Potomac Park in Washington, D.C. This photo shows senior project assistant Marlene Cosme (right) after she completed the 10k race — a total of 6.2 miles!
Pictured on the left is senior law clerk Deirdre Mullane, the coordinator and coach for TELG’s team who ran the 5k race.
