Thursday, May 6, 2010

Relief From Retaliation Against False Claims Act Whistleblowers

People may witness Medicare or Medicaid fraud but choose to look the other way. That may be entirely understandable, but is that the most we should expect from our fellow citizens? If health care fraud becomes ever more rampant, should any thought be given to where that might ultimately lead?

Alternatively, a person who has knowledge of fraud and whose conscience is troubled may choose to take action. Depending on the course of action, however, the whistleblower may be exposed to retaliation. Any realistic appraisal of the consequence of blowing the whistle must consider the risk of such an outcome. In weighing whether to bear that risk, the whistleblower should take into account the federal law, discussed within, that is designed to protect whistleblowers and deter retaliation.

The Proactive Options

If not ignored, cases of suspected fraud may be handled in one of three ways:

1) Reporting to Governmental Agencies

There are established “hotlines” for reporting health care fraud. Cases of suspected fraud may be reported to the Office of the Inspector General (1-800-447-8477 or or to the local Senior Medicare Patrol (“SMP”), an established anti-fraud project administered by the states through the U.S. Department of Health and Human Services and the Administration on Aging. For instance, in Maryland, the fraud SMP hotline is 1-800-243-3425.

2) Reporting to Anti-fraud Compliance Programs of Private Entities

At the risk of a response like “Don’t rock the boat,” another option is to trust the employer’s internal reporting procedures. In larger organizations, employees may be encouraged to report suspected fraud to a supervisor or directly to the organization’s Compliance Department.

3) Pursuit of a False Claims Act Lawsuit

Initiating a lawsuit must not be undertaken lightly, as it is a stressful experience which most persons would prefer to avoid at all costs. Yet a highly effective mechanism exists for recovery of funds to the United States Treasury while simultaneously providing a significant reward for the person who files suit. The U.S. Department of Justice recently reported that $2.3 billion has been recovered since January 2009 in health care fraud lawsuits based on the False Claims Act (“FCA”). Unlike action taken under the first two options, under the FCA, whistleblowers are entitled to receive a reward. The successful whistleblower can receive between 15 and 30 percent of the proceeds of the action.

Whistleblower Protection

The FCA provides relief from retaliatory actions. For example, if an employee is fired because of lawful acts in furtherance of efforts to stop a false or fraudulent billing scheme, the employee is entitled to “all relief necessary to make the employee whole.” See 31 U.S.C. § 3730(h)(1) (emphasis added). Moreover, the protected conduct (i.e., lawful efforts to stop FCA violations) does not require that the whistleblower win the FCA lawsuit, or even file suit. See United States ex rel. Yesudian v. Howard Univ., 153 F.3d 731, 739 (D.C. Cir. 1998) (“the protected conduct element of a [§ 3730(h)] claim does not require the plaintiff to have developed a winning qui tam action before he is retaliated against”); United States ex rel. Ramseyer v. Century Healthcare Corp., 90 F.3d 1514, 1522 (10th Cir. 1996) (“[t]he case law is clear that a retaliation claim can be maintained even if no FCA action is ultimately successful or even filed”).

Forms of Retaliation

Retaliation by an employer may be more subtle than firing the employee. For instance, the FCA identifies the following full array of additional types of retaliatory conduct:

• demotion;
• suspension;
• threat;
• harassment; and
• discrimination affecting terms and conditions of employment.

Id. The employer who retaliates thus only magnifies his woes in light of the significant additional award an employee may secure if subjected to retaliation.

Statutory Relief

The remedy for such prohibited conduct includes reinstatement of same seniority status and double back pay:

Relief under paragraph (1) shall include reinstatement with the same seniority status that employee, contractor, or agent would have had but for the discrimination, 2 times the amount of back pay, interest on the back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorneys’ fees.

Id. at § 3730(h)(2). Thus, any lost pay gets doubled, with interest on the back pay.


For some persons, the anger rising from witnessing taxpayers being ripped-off and the long-range prospects of receiving a significant share of the ultimate recovery provide enough motivation to retain counsel to explore the risks and benefits to filing a FCA lawsuit. For others, the remedies for retaliation may be just that added measure of protection that allows the whistleblowers to protect their personal interests while doing their part to stop health care fraud.