Whistleblowers:
Whistleblowers:
What You Need to Know
What You Need to Know
To Protect Your Agency
To Protect Your Agency
Presented by: Denise Bonn Deputy Director Center for Health Care Law
National Association for Home Care & Hospice Denise-Bonn@nahc.org
(202) 547-5262
Whistleblower Actions
DOJ collected $3.1 Billion from fraud actions in 2006
72% from health care; only 20% from defense contractors
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Do you think that you don’t have
to be concerned?
1. You are a small agency
2. Whistleblower suits have not been filed against HHAs or Hospices
3. You are not filing false claims
YOU ARE WRONG
What is a Whistleblower suit?
Private person files lawsuit against Provider
alleging provider filed false claims with U.S.
with right to recover part of the proceeds if suit is successful
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Suit authorized by federal Civil
False Claims Act, 31 U.S.C. § 3730
“Qui Tam”
What is a False Claim under the
FCA?
knowingly present false or fraudulent claim for payment
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What is “knowingly” under FCA?
actual knowledge
acts in deliberate ignorance (ostrich)
acts in reckless disregard
Government does NOT have to prove specific intent to defraud
What is Defendant’s potential
liability?
3X damages
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Why is the person called a
whistleblower?
Individual must have direct and
independent knowledge of alleged false claims
Usually disgruntled employee
Sometimes a spurned spouse or lover
Sometimes a competitor
Does an employee have to bring
the problem to your attention
BEFORE filing suit?
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How can you find out about
problem before suit is filed?
Hotline
Exit interview with employee
Employees believe you will do something about alleged fraud
Risk Areas
HHA and Hospice:
Claims
Billing for services not rendered
Furnishing services which are not13
Risk Areas
(cont’d)HHA and Hospice:
Claims
Furnishing services which were not ordered by a physician
Furnishing services by unlicensed personnel
Furnishing services supported by falsified documentation Marketing: improper payments to referral sources
Home Health Risk Areas
Furnishing services to patients who are not homebound
Always billing 5 therapy visits to avoid LUPA
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Hospice Risk Areas
Certifying patients who have more than six months to live
Risk Areas – Medicaid
State Medicaid False Claims Acts
DRA incentives for States to adopt Medicaid False Claims Acts
Reward: states keep 10% more
OIG must review state law
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Providers with $5 Million or More
Medicaid Revenues
Must establish written policies for your employees and contractors about:
state and Federal FCAs
whistleblower protections
your policies for detecting and preventing fraud and abuse
Provider non-compliance = Non-payment (DRA 2005)
FAQs:
http://www.cms.hhs.gov/smdl/downloads/SMD03 2207Att1.pdf
What should you do if employee
comes to you with alleged
improper activity?
Investigate Report results back to employee
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Should you fire the employee or
threaten termination if he discloses
his concerns to the government?
NO!
Employment protections for
whistleblower
Protected for investigation, initiation, assistance in suit
If discharged, demoted, suspended, threatened, harassed, or discriminated against for above is entitled to:
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Employment protections for
whistleblower
(cont’d) If discharged, demoted, suspended, threatened, harassed, or discriminated against for above is entitled to:
2X back pay
Interest
Special damages, including attorneys’ fees and costsHow can you DETER whistleblower
suits?
Hotline
Compliance Plan
Review billing
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Whistleblower Procedure
Whistleblower observes what he/she believes is illegal activity
false billing, false cost report, kickback, Stark violation
gathers information and evidence to support his/her allegations
may or may not confront employer with alleged illegal activity
brings information and evidence to a lawyerWhistleblower files suit in
Federal Court
Suit is brought in the name of U.S.
Suit filed “under seal”
Not filed upon Defendant until court so orders
Whistleblower’s lawyer gives U.S. copy of all information and evidence
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Government may:
Take over the case
Can choose to proceed with administrative remedy for CMP, rather than court proceeding
Can choose to file criminal action as well ascivil action
Dismiss the case
Decline to proceed with case
Whistleblower may then proceed with the case Settle case with Defendant
Other Potential Liability:
Stark
Anti-Kickback
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If suit is successful, what can
whistleblower get?
15-30% of proceeds
Expenses
Attorneys’ fees
Costs
ALL PAID BY DEFENDANT
What if whistleblower “planned and
initiated” the false claim?
Receive reduced amount of proceeds
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What if Defendant wins?
Court MAY award Defendant attorneys’ fees and expenses
IF
Defendant WINS, AND
What if Defendant wins?
(cont’d) Court finds U.S. position was not “substantially justified”
Size limitIndividual net worth not more than $2M
Business net worth not more than $7M and 500 employees
Non-profit exception
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Hospice Qui Tam Case
Odyssey
Former Regional Clinical Administrator filed qui tam case
Patients lived longer than 6 months
Allegation that General Managers under pressure to admit patients who did not meet hospice requirements
Allegation that whistleblower recommended that some patients be discharged
Claims 2001-2005
Settled for $13 million
Whistleblower got $2.3 million
U.S. ex rel. Russell v. Odyssey Health Care, Inc., E.D.
Wis., 2:03-cv-00865-AEG
Home Health Qui Tam Cases
Perez Case
Payroll clerk files qui tam action againstProvident Home Health Care Services, Inc., Tri-Regional Home Health, owner Lourdes Perez, etc. (Los Angeles, CA) in 4/03
(10/01– 4/03) billing for 1,000’s of visits never
performed
Sept. 2003 – Medicare suspended payment and seized more than $20M in assets
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Home Health Qui Tam Cases
(cont’d)Criminal case against Perez –
Allegations
Kickbacks to patients, nurses, marketers and physicians
Billing for patients not homebound and no medical necessity for services
Billing Medicare for services not rendered
Creating false records to support false claims
Perez pleaded guilty Oct. 2004
Agreed to repay $33.9 million
Sentenced to 46 months in jail RN (DON) also pleaded guilty
Whistleblower to get more than 20% of the recovery
Government said investigation is continuing
U.S. v. Perez, C.D. CA, CR 04-1155 SVW (unsealed 9/6/06)
Home Health Qui Tam Cases
(cont’d) Perez progeny?
Employee of Community Home Health filedqui tam case
Medicare suspended payment August 2004
Criminal case against owner, Nida Campanille- She pleaded guilty to scheme (May 2003 – August 2004)
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Home Health Qui Tam Cases
(cont’d)forged physician signatures and falsified
medical records to conceal the fraud - 2 years jail
- $600,000 restitution
(RN also pleaded guilty; LPN admitted to forging physician signatures and
falsifying medical records)
U.S. ex rel. Shutt v. Community Home
Health Care Services, Inc., C.D. CA, No.
2:04-cv-02075-MMM
Home Health Qui Tam Cases
(cont’d) Aging Care Home Health
Two whistleblowers filed qui tam case: former employee of HHA and former employee of physician (2002)
Suit against HHA and Government alleged claims were false because referrals violated Stark II and Anti-Kickback
Multiple Medical Directors/physicians for HHA Advisory Board37
Home Health Qui Tam Cases
(cont’d)
Court decision re: Stark violations (5 physicians) (Feb. 2006)Physicians referred to HHA
Sham contracts
HHA paid physicians for little or no services OR to perform routine services for physicians’ own patients
HHA and owner must pay government more than $400,000 for services rendered to patients referred by the 5 physicians during period of prohibited referrals (9/99 – 11/03)
Government alleged Anti-Kickback violations re:
payments for referrals by Aging Care and owner to 5 physicians plus an additional 6 physicians
U.S. v. Medica-Rents Co., No 4:01-CV-198-Y, 2006 WL 3635416 (N.D. Tex. Dec. 7, 2006)
Court awarded attorneys’ fees to successful Defendant
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U.S. v. Medica-Rents Co.
(cont’d)
Government withheld crucial evidence from Medica-Rents
Court awarded attorneys fees to Defendant because of Government’s bad faith
Defendant was too large a corporation to qualify for attorneys fees under the“substantially justified” test
What Should You Do?
Compliance must be top down
Educate your staff and contractors
Control and monitor your marketers
Review and monitor billing
Review all contracts with referral sources