Whistleblowers Reduce Fraud & Abuse

Elizabeth Hogue, Esq

Oct 1, 2020

The Justice Department’s Civil Division continues to recover record amounts primarily from healthcare providers. “Many of the cases would not be possible without the whistleblowers…who have come forward to report fraud, often at great personal risk,” said Stuart Delery, the principal deputy assistant attorney general for the civil division.

A number of recent enforcement actions have targeted the activities of marketers. Enforcers do not hesitate to recruit individuals to wear wires to record the inappropriate activities of marketers.

If marketers obtain referrals in ways that violate the law, claims submitted based on services provided to these referrals are false claims under the False Claims Act.

So, who are whistleblowers?

In order to bring a qui tam action under the False Claims Act, private parties or whistleblowers must have direct and independent knowledge of fraud by providers against whom suits are filed. Thus, current or former employees who are familiar with providers' practices may initiate whistleblower actions under the False Claims Act. Specifically, whistleblowers must be able to show that the information forming the basis for the complaint has never been publicly disclosed by the media, in litigation, or through voluntary disclosure. If the information has been previously disclosed, an individual who files such a lawsuit must be able to show that he or she is the original source of the information.

Individuals who start qui tam actions are known as “relators.” Relators must first file a written complaint on behalf of the United States government and serve a copy of their complaint on the United States Department of Justice. Relators must also provide the Justice Department with copies of documentation that substantiates the allegations contained in their complaints.

Following review, government representatives must make a decision about who will continue to pursue the allegations made in the complaint. The government may elect to proceed with the action without the relator. If the government assumes responsibility for pursuing the complaint, the relator may continue as a party in the suit, but the government may settle the case against facilities without the agreement of relators.

If the government recovers money as a result of a whistleblower lawsuit, relators receive a percentage of these monies. The percentage given to whistleblowers varies, but a number of whistle blowers are now multi-millionaires as a result. Generally, relators receive less money when the government elects to proceed with the lawsuit than if the government declines to become involved and relators proceed by themselves.

When a qui tam action has been initiated by filing a complaint, only the government can intervene as described above. No other private individuals can become parties to the existing suit or initiate another complaint based upon the same information.

What can providers do to protect themselves from allegations by whistleblowers?

1. All providers must have a Corporate Compliance Plan that addresses fraud and abuse issues. Corporate Compliance Plans should be up to date and should be fully implemented with all employees.

2. Corporate Compliance Plans should require employees to report any possible violations to providers first. If whistleblowers fail to adhere to this requirement, they may damage their credibility with enforcers.

3. Providers must take concerns of employees seriously regarding possible fraudulent and abusive practices. Most whistleblowers take their concerns to their employers first. It is only when employers ignore their concerns or, even worse, retaliate against employees for raising issues in the first place, that employees turn to outside enforcers for assistance in pursuing their concerns. Whether or not the allegations of employees are valid, providers must take them seriously. Thorough investigations are required in order to demonstrate to employees that there is no problem or that the problem has been corrected.

Government enforcers love whistleblowers, especially those who target marketing activities! Employers who ignore employees’ concerns about fraud and abuse clearly do so to their own detriment.

Elizabeth E. Hogue, Esq.

Office: 877-871-4062

Fax: 877-871-9739

E-mail: ElizabethHogue@ElizabethHogue.net

Twitter: @HogueHomecare