Whistle-Blower
Law Tightens with Changes to False Claims Act
For
laboratories concerned about exposure to internal whistle-blowers,
there is positive news. The whistle-blower law, which allows employees
of a company to bring the company’s failure to comply with
national rules and regulations to the attention of the authorities
for personal financial benefit, was recently dealt a blow by the
Supreme Court. In a 6-to-2 court ruling, the Court tightened a
component of the False Claims Act that requires the individual
whistle-blower to prove that he or she was the “original
source” for a claim of fraud against the government.
For a hospital or laboratory employee, this means that the whistle-blower
would likely have to file a false-claims lawsuit on behalf of
the federal government before the whistle-blower saw a CMS (Centers
for Medicare and Medicaid Services) investigator on the premises
of the healthcare institution. It may still be possible to file
the lawsuit and collect after a federal investigation has begun,
but it will be much harder for the employee to prove he or she
was the original source. The ruling “appropriately set limits
and reduces the potential for abuse of the powerful financial
incentives (dictated) under the statute,” according to attorney
Daniel Westman, a partner of Morrison
& Foerster in McLean, VA.
In 2006, the US government recovered $3.1 billion in settlements
and judgments in cases involving allegations of fraud (Nearly
72%, or $2.2 billion, of those recoveries were in healthcare.).
$1.3 billion of that $3.1 billion was paid out to individuals
using the qui tam act to file lawsuits on behalf of the US government.
With the new changes to the False Claims act, the US Government
can expect to surrender a smaller percentage of its recovered
funds from fraud allegations lawsuits in 2007. The hope of the
Supreme Court in its ruling is to deter fraudulent whistle-blowers
from coming forward. Critics, however, fear that the law will
keep whistle-blowers with genuine claims of fraud and abuse from
coming forward.
The staggering amount of claims in healthcare cases last year
made on behalf of the U.S. by employees is a reminder to all laboratories
and pathology group practices that potential whistle-blowers are
carefully watching for compliance violations by their employers.
When you Google
“Whistleblower Law” , it is immediately apparent
that the government provides whistle-blowers significant employment
protections and hundreds of lawyers are lined up to take their
cases.
The same employees that you trust to carry out procedures, rules,
and regulations properly are also watching both the laboratory
as a whole and their co-workers for examples of abuse and rule-breaking.
The government’s whistle-blower statutes provide these individuals
with a significant incentive, not only to do this for the betterment
of their industry and profession, but with the added benefit of
a significant personal payoff if a federal court rules that their
whistleblower claims are have merit and finds that the provider
has defrauded government healthcare programs, including Medicare
and Medicaid.
Finally, laboratories with active compliance programs have the
best protection of all from internal whistle-blowers. After all,
if the law is being followed, and management is documenting its
compliance, then whistle-blowers have no case to pursue.
Related Articles:
Supreme
Court: More Scrutiny Required in Whistleblower Claims
Whistle-Blower
Law Tightened (Modern Healthcare subscription required)
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