By: David S. Barmak, Esq.
The Department of Justice (DOJ) announced in December 2016 that it had obtained more than $4.7 billion in settlements and judgments from cases involving fraud against the government. This amount marks the third highest annual recovery in the history of the False Claims Act (FCA).
In 1863 during the Civil War, the False Claims Act was enacted by Congress over concerns that the Union Army was being defrauded by those providing supplies and goods for the war effort. The act stipulated that anyone who intentionally filed fraudulent “government claims would be liable for double the government’s damages plus a penalty of $2,000 for each false claim.” There have been several amendments to the FCA including one in 1986, when Senator Charles Grassley authored amendments to the qui tam provision of the law. These amendments provided more support for the qui tam provisions allowing private citizens to file lawsuits against government contractors alleging false claims on behalf of the government. Since the 1986 amendment, the FCA has recovered a total of $53.1 billion and averages $4 billion in settlements per year. Successful qui tam lawsuits make the whistleblower eligible to receive up to 30 percent of the monies recovered.
The majority of healthcare providers are compliance conscious, and genuinely welcome input from employees to promote effective compliance practices. Unfortunately, a small minority of providers retaliate against employees; thereby, laying the seeds of their own and our industry’s destruction by creating qui tam whistleblowers. These whistleblowers allege violations of the Stark Law, the Anti-Kickback Law, and other fraudulent schemes. These fraudulent schemes include efforts by a minority of providers to induce referrals, obtain unlawfully high reimbursements and seek reimbursement for medically unnecessary services.
One such example of a fraudulent scheme is the $256 million case of U.S. v. Millennium Health. The company was alleged to have billed federal programs for medically unnecessary testing, giving kickbacks to physicians, and threatening employees who complained. The qui tam lawsuit’s complaint identified the retaliatory environment that existed in the company at the time. It stated that during a company presentation on the topic of compliance, the company’s general counsel presented slides showing what action the company would take with an employee who raised concerns. This presentation included photo-shopped pictures of a shooting range and a former company employee who had sued the company riddled with bullet holes. There were also pictures of a line of body bags labeled with the names of the former employees and company competitors. The complaint also disclosed the speaker’s notes:
“Don’t be a weasel. . . . I don’t want to be on the other side of litigation from any of you. I hope you don’t want to be on the other side of litigation with Millennium. There is no amount of time or resources we won’t spend to hold our employees accountable. . . . [W]e will protect this company.”
Cases like this one only fuel support for whistleblower protection. Healthcare providers must place the highest priority on encouraging potential whistleblowers to come forward; and, with support and security from management, take seriously all potential concerns. Creating a compliance culture includes creating a culture of support and protection for employees to communicate their concerns and observations.
For any inquires regarding this article, please contact
David S. Barmak, Esq. at info@barmak.com or by telephone at (609) 454-5351.
