Whistleblower cases have skyrocketed in the past few years. Simply stated, “whistleblowing” is speaking up against activity that a person reasonably believes is either against the law, against a regulation, or against a public policy. The definition varies depending on state laws as well as various federal laws. Very often an individual will be protected when “blowing the whistle” is done properly. Wrongful conduct that is the subject of the whistleblowing is protected. That is, the law protects the person for coming forward. The law also provides financial rewards for doing so.
One example of a “whistleblowing” statute is the Federal False Claims Act. The False Claims Act has a rich history. It was enacted during the Civil War to combat fraud committed by companies selling supplies to the Union Army. The False Claims Act contains a “qui tam” provision that allows private citizens, on the government’s behalf, to sue persons or entities that are defrauding the government. “Qui tam” is the shortened version of the Latin phrase meaning “he who sues for the king also sues for himself.” The person who files this kind of lawsuit on behalf of the government is termed a “relator.” Many states, such as Delaware, New Jersey, and New York, have enacted their own versions of the Federal False Claims Act, which allows a relator to initiate a suit against persons or entities that defraud those state governments.
False claims may appear in the medical setting, where the Federal Government pays for healthcare services under the Medicare or Medicaid programs. Another Federal healthcare program is Tricare, which provides civilian health benefits for military personnel, military retirees, and their dependents. These Federal Healthcare programs require that medical providers comply with certain regulations as a condition of payment. For example, in order to pay for a radiology study, Medicare requires certain levels of physician supervision for certain diagnostic studies. Contrast studies require the personal supervision of a physician. (Personal supervision requires that the physician be physically present in the room during the performance of the procedure.) If radiology studies require a certain level of supervision, the medical provider files a false claim when he/she bills Medicare without providing the required level of supervision. It can be that simple.
By way of further example, certain medical procedures are expressed in time units of 15 minute increments. When a provider bills Medicare, Tricare, or Medicaid in excess of the time actually spent performing the services, again, a false claim is submitted. Other examples of false claims include ambulance companies that improperly bill Medicare and Medicaid for medically unnecessary patient transport (e.g., many dialysis patients), nursing home abuse, and other types of fraudulent billing of a government healthcare program.
False Claims are not limited to Medicare or even the healthcare industry. Consider this example: A company provides shipping services for the Federal Government. The company sends cargo containers containing supplies over to US troops stationed in Afghanistan. An employee discovers that each cargo container is only being filled ¾ of the way, resulting in the utilization of more cargo containers, and a correspondingly higher expense for the Federal Government. If an employee, contractor, accountant, compliance person, etc., reports such fraud to the United States Government (Note: this is normally done through a whistleblower attorney), such person may be entitled to a substantial financial reward and is also protected from being retaliated against by the company if or when the company learns that the person “blew the whistle.” This example is a case that would fall under the Federal False Claims Act, Qui Tam and specifically, the related Anti-Retaliation provisions.
Reporting fraud in the scenarios described above may be considered “protected activity.” That is, the law will protect the whistleblower from retaliation by the employer in the event that the employer retaliates against the employee for speaking out against what the employee reasonably believes is fraudulent behavior being committed against a United States federal agency. The False Claims Act actually has a specific provision in it that expressly permits a whistleblower to bring a claim against the company for retaliating against the whistleblower. The provision is often referred to as the “(h)” claim. Finally, this provision provides for yet additional compensation for the whistleblower.
There are a number of reasons why a person would become a whistleblower. One of the most obvious and compelling reasons is the potential for an extremely large financial reward. Recoveries for whistleblowers can range from several hundred thousand to several hundred million, depending on the case. Even a small case can add up very quickly when penalties are assessed against a defendant. The average recovery for a whistleblower is approximately 18% of the government’s recovery. This number can vary based on a large number of factors. Other reasons for blowing the whistle include a dislike of the company generally and/or a certain boss or supervisor because of how the whistleblower had been treated as an employee, coupled with knowledge of the company’s fraud ripping off taxpayers, and a genuine desire to do the right thing. Fraud against the government takes a toll on society, and the government’s resources, which makes it harder for honest companies to compete.