Ileana Hernandez of Manatt and is a member of the firm’s healthcare litigation practice. She represents defendants and insurers in False Claims Act (FCA) matters and other complex civil cases relating to healthcare. Her practice also includes advising on FCA compliance programs and helping companies resolve qui tam actions under various theories without incurring False Claims Act liability or reputational harm. We spoke to her about whistleblower protections in healthcare fraud litigation.
What are whistleblower protections under the False Claims Act (FCA)?
Hernandez: The FCA was first passed in 1863 to allow whistleblowers or “relators” to bring qui tam actions on behalf of the government against individuals who knowingly submit false claims for payment, often to federal health care programs such as Medicare and Medicaid. The FCA imposes a civil penalty of up to $11,000 per claim on those who submit these false healthcare claims. Additionally, the FCA permits the relator to receive between 15-30% of any recovery from a lawsuit filed by the government if their qui tam action is successful. In cases where the government declines to intervene and pursue a qui tam action, whistleblowers have even more options, as they can choose to file their own lawsuit based on information known to them.
In recent years, Congress has also passed laws protecting whistleblowers who disclose federally protected health care information from retaliation by employers. In 2009, President Obama signed the American Recovery and Reinvestment Act (ARRA), commonly known as the stimulus package, which passed with bipartisan support and protected whistleblowers. In 2010, President Obama signed the Patient Protection and Affordable Care Act (ACA) to protect whistleblowers who disclose protected health care information from employer retaliation.
The American Recovery and Reinvestment Act was the first step to ensure that whistleblowers could safely disclose evidence of fraud or other violations without fear of losing their jobs. In 2010, President Obama supported a Senate bill – the Patient Protection and Affordable Care Act – which increased protections for whistleblowers who disclose protected health care information from employer retaliation. More specifically, Section 922 of the Affordable Care Act prohibits employers from retaliating against employees who disclose health care fraud or other wrongdoing. The section also protects whistleblowers from retaliation for assisting in an investigation of suspected fraud or misconduct.
What’s new under the Affordable Care Act?
Hernandez: Last year, the Department of Labor (DOL) issued its new final rules implementing Section 922 of the ACA and creating the “Office of the Whistleblower.” The rules went into effect in November 2012, and they give employees new protections against retaliation if they report suspected fraud against federal health care programs.
More importantly, the DOL established an Office of the Whistleblower within its Occupational Safety and Health Administration (OSHA) to oversee the rules, investigate complaints, and assist whistleblowers. OSHA enforces 15 worker protection laws, including those prohibiting retaliation against whistleblowers.
What are some of the changes?
Hernandez: The new rules have several provisions designed to better protect employees who report fraud or wrongdoing. First, employers cannot take any action to impede an employee’s engagement in protected conduct. This includes preventing an employee from making a disclosure, requiring them to do something before they are permitted to make a disclosure, or taking action against them when they have made disclosures related to fraud.
Furthermore, employers cannot take any adverse employment action against someone based on their protected conduct. The law protects employees who report suspected fraud against federal health care programs, participate in investigations or hearings on such allegations, and refuse to participate in conduct they believe would be fraudulent.
Most importantly, the new rules provide a more streamlined process for employees who wish to file complaints of retaliation against employers. Employees must first notify their employers within 90 days of an employer’s action that they believe was in retaliation for their protected conduct. The OSHA will then investigate the complaint. If it finds reasonable cause that an employee has been retaliated against, it will attempt to settle with the employer. If no settlement can be reached voluntarily, OSHA can issue an order requiring the employer to take specific actions, such as reinstating the employee with back pay.