The Justice Department's new pilot program, which rewards whistleblowers who provide evidence of corporate misconduct, could lead to an uptick of whistleblower activity related to private payer fraud, The National Law Review reported Aug. 15
The program rewards individuals with monetary awards for coming forward with tips regarding criminal activity in an effort to close the gaps in healthcare fraud enforcement.
One potential gap is related to private insurers, the report said, because the False Claims Act imposes liability only for fraud perpetrated against federal payers.
Under the three-year pilot program, individuals with independent knowledge of corporate violations related to specified priority areas may submit information to the department themselves or through an attorney. The specific priority areas include crimes involving private payers and fraud against patients, investors and other non-governmental healthcare industry entities
If the tip leads to a forfeiture of more than $1 million, the whistleblower is eligible for a percentage of the amount. According to the report, the award could be up to 30% of forfeitures of up to $100 million and up to 5% of forfeitures between $100 million and $500 million. To be eligible for an award, the whistleblower must not have meaningfully participated in the criminal activity, the disclosure must be voluntary and cannot be made in response to any department request.
The program also allows corporate entities who self-report misconduct within 120 days of receiving an internal complaint to remain eligible for a presumption of declination.
Providers should review their internal reporting policies and procedures in response to the new pilot program, according to the Review.
"Exactly how and to what extent the whistleblower pilot program will expand liability of healthcare companies is unclear, but it certainly further incentivizes would-be whistleblowers to look beyond the FCA to uncover fraud on a larger scale," the report said.