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Why be a Whistleblower?

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The abuse of federal healthcare programs by entities in whom the American public implicitly places its trust is a matter of great concern to the nation. Medicare and Medicaid programs have been designed to assist needy and aged Americans; providers have the moral responsibility to adhere to the established code of ethics. Unfortunately, the incidence and extent of fraud and abuse has only increased in recent years. Thankfully, healthcare whistleblowers have uncovered the wrongdoings of defrauding parties and done their bit to recover taxpayer money while also putting the spotlight on the important issue of fraud in federal-sponsored healthcare programs.

There isn’t a single go-to definition of a ‘whistleblower’. A whistleblower is an employee, healthcare professional or a consumer who, in good faith, discloses information that he/she reasonably believes is evidence of fraud, illegality, abuse of power, wrongdoing or a danger to public health and safety.

Whistleblowers take the personal and professional risk to speak out about unethical actions in the workplace. By doing this, they do a great service to the public and contribute to upholding the integrity of federal and state laws.

How Much Money Have Healthcare Whistleblowers Recovered for US Taxpayers?

According to Taxpayers Against Fraud Education Fund, a non-profit organization dedicated to fighting fraud against the government, civil and criminal fraud investigations initiated by whistleblowers resulted in almost $20 billion in recoveries, between 2008 and 2012. It included billions of dollars in settlement money paid by individuals and companies in qui tam cases, federal criminal fines and money collected by states that had lost money owing to fraud.

It is estimated that for every dollar spent by the government in pursuing whistleblower cases, more than $20 is recovered. This is an incentive for the government as well as individuals blowing the whistle. However, the greatest benefit of exposing guilty parties is to pull the plug on unethical practices that can endanger the safety and indeed the lives of patients.

Another advantage of whistleblower cases is that they act as a strong deterrent to prevent more frauds against Medicaid and Medicare programs. Cases involving million-dollar fines and settlements can be cautionary and lower the likelihood of large-scale frauds against the system. Having said that, the number of whistleblower cases has increased over the years. Six years after the passage of the False Claims Act in 1986, 62 whistleblower cases were filed. In 2011 and 2012, a total of 829 healthcare fraud cases were filed. Individuals have stopped witnessing wrongdoings at their workplace silently, and are coming forward to initiate qui tam actions on behalf of the government.

Whistleblower Protection Acts

Qui tam, under the False Claims Act (31 U.S.C. Sections 3729 through 3733), gives entities with the knowledge and evidence of fraud against federal programs to sue the guilty party on behalf of the U.S government. The government has the right to join the action. The whistleblower ( private plaintiff ) may also pursue the case on his/her own if the government declines to intervene.

Under the False Claims Act, the following actions are considered violations: (a) knowingly presenting the federal government with a fraudulent or false claim for payment (b) knowingly using a false statement or record to claim payment from the federal government (c) knowingly using a false statement or record to avoid, lower or conceal an obligation to make a payment to the government (d) conspiring with other entities to defraud the government through fraudulent or false claims.

You can file a qui tam lawsuit if you have evidence of fraud against federal programs. The lawsuit cannot be pursued if the government or another private party has filed a qui tam lawsuit under the False Claims Act based on the same evidence as you.

A qui tam action should be filed confidentially in a federal court as per the Federal Rules of Civil Procedure. A copy of the complaint and a written statement disclosing all the evidence must be confidentially presented to the Attorney General and the US Attorney or the district where the complaint is brought.

Certain Statutes of Limitations apply to a qui tam lawsuit. The action must be filed within six years from the date of violation of the Act, or three years after the government knows or should have known about the violation. The lawsuit cannot be filed at a time exceeding ten years after the violation of the Act.

The False Claims Act offers the strongest provisions for whistleblower protection in the country’s legal system. Under Section 3730 (h) of the Act, the employee (whistleblower) is entitled to the following types of relief (a) reinstatement with the same seniority that the employee held before adverse action was commenced and (b) double the amount of back pay, interest on the back pay and compensation for any damages resulting from the discrimination, including attorney’s fees and litigation costs.

Awards Under the False Claims Act

Whistleblowers reporting Medicaid and Medicare fraud are entitled to financial rewards under the False Claims Act. Here is a brief breakdown of the whistleblowing process under the Act:

  • You consult with a whistleblowing attorney to understand if you have a case worth pursuing
  • You file your complaint confidentially in court
  • The government prosecutor peruses the presented evidence and decides to pursue or decline
  • If you pursue the case on your own, you stand to receive 25 per cent to 30 per cent of the amount recovered in the case.

A new rule proposed in 2012 by the Centers for Medicare and Medicaid Services (CMS) increases the financial reward for individuals reporting Medicare fraud. Currently, the Medicare Incentive Reward Program (IRP) entitles individuals to a maximum reward of $1,000 for each identified case. The new proposal rewards individuals with 15 per cent of the overall damages recovered by the government in relation to the case, and a maximum award of $9.9 million per case. The reward money would be paid only to the first individual who makes the report. CMS believes that the proposed change has the potential to increase net recoveries by $24.5 million each year.

You are entitled to rewards for reporting all kinds of Medicare fraud committed by a physician, dentist, hospital, pharmaceutical company, medical equipment provider or nursing home.

Notable Healthcare Whistleblowing Cases

Promoting off-label use of prescription drugs: In a record $3 billion settlement, GlaxoSmithKline was found to have engaged in a nationwide scheme to push the unapproved use of Imitrex, Wellbutrin and Advair. The two whistleblowers in this case were Glaxo’s senior marketing development manager and the company’s former regional vice-president. The case was the biggest of its kind, with the depth of evidence and information provided by the whistleblowers compelling the government to launch a massive investigation into Glaxo’s marketing practices.

Pfizer’s improper off-label marketing of Bextra, a drug approved by the FDA to address arthritis, was brought to the government’s attention by the company’s sales representative. The drug being pushed for unapproved uses put patients at a risk of heart attack, blood clot in the lungs and stroke. The case was settled for $1.8 billion.

Stark Law and Anti-Kickback Statute violations: Intermountain Healthcare, one of Utah’s biggest healthcare providers, paid $25.5 million in settlement money to resolve allegations of violating the Stark Law. The provider admitted to improper compensation arrangements with referring physicians. In another major case, South Carolina-based Tuomey Healthcare System was also found to have filed $39 million in illegal Medicare claims through kickbacks involving 19 specialists.

Mislabeling: GlaxoSmithKline (GSK) and Bayer sold relabeled drugs to a Health Maintenance Organization at discounted prices and concealed this information to avoid paying millions of dollars in rebates to the Medicaid program. The whistleblower filing qui tam action in this case was a former Bayer marketing executive, who received $34 million out of the total $344 million settlement.

Fraudulent laboratory billing: GSK also found itself in the eye of a storm involving improper laboratory billing practices. The whistleblower was awarded $52,000,000. In another case of fraudulent Medicare and Medicaid billing by Damon Clinical Laboratories, three whistleblowers received millions of dollars; the total cost recovered by the government stood at $83,000,000.

A more recent high-profile qui tam lawsuit involves Florida-based Halifax Health Medical Center, which is alleged to have committed Medicare fraud. The government has joined the lone whistleblower in prosecuting the hospital for over ten years of unnecessary hospital admissions, billing fraud and illegal kickbacks to doctors. The initial lawsuit sought $600 million in damages; in the light of further allegations, the damages are expected to reach $1 billion.

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