Healthcare providers should be advised that the U.S. Department of Justice has launched a new program soliciting information regarding healthcare fraud involving private health plans and insurance programs. Historically, the DOJ directed its efforts on healthcare fraud that impacted federally funded healthcare programs, like Medicare, Medicaid and TRICARE. However, on August 1, 2024, the DOJ launched a three-year initiative entitled the Corporate Whistleblower Awards Pilot Program, which addresses private healthcare fraud. The launch of the Pilot Program also coincides with recent DOJ updates to their Evaluation of Corporate Compliance Programs made in mid-September 2024.
DOJ Pilot Program
The Pilot Program incentivizes individuals with original and accurate information about corporate crime, including private healthcare fraud, to file a report with the DOJ conveying their first-hand knowledge in exchange for a potential monetary award.
The Pilot Program intends to “motivate corporations to create more robust compliance programs that detect and deter criminal conduct, including by encouraging internal reporting of complaints.” Under this policy, a whistleblower is someone who has (1) original, (2) relevant, (3) voluntary, and (4) truthful and complete information about corporate crime that (5) yields a successful asset forfeiture on behalf of the DOJ.
Information is “relevant” if it relates to one of the four enumerated subject areas defined by the DOJ. The fourth subject area includes federal healthcare offenses and crimes involving private healthcare benefit programs, as well as healthcare fraud against patients, investors, and other private or non-public healthcare benefit programs, including employer-sponsored health and other benefit plans.
The Pilot Program is focused on healthcare fraud involving private insurers outside the purview of the False Claims Act or a qui tam claim. The breadth of this inquiry could now include whistleblower claims regarding overbilling commercial payers and fraudulent schemes with employee benefit plans. To the extent that a healthcare provider’s compliance program only addresses risk related to federally funded healthcare programs, compliance programs should be updated to also apply to private health plans and commercial insurance programs.
Evaluation of Corporate Compliance Programs (ECCP) Guidance
The ECCP guidance document summarizes the questions and considerations of prosecutors in assessing compliance programs. One key addition to the inquiry is whether the compliance program includes a confidential reporting structure that protects whistleblowers.
In light of these updates, healthcare providers should ensure their compliance programs have effective and protected reporting channels protecting whistleblowers. The DOJ analyzes compliance programs from both an employee’s perspective, as well as the entity’s governance perspective.
Regarding the employee’s perspective of the program, the DOJ considers anonymity of the reporting scheme, frequency of use, and internal knowledge of the reporting hotline. Regarding the governance perspective of the program, the DOJ considers entity reactions to reports, anti-retaliation procedures, training covering protection of whistleblowers, investigation procedures, program funding, and tracking mechanisms for reports and investigations.
How healthcare providers should proceed
These policies indicate a steady increase in the DOJ’s monitoring of the corporate sector, including healthcare providers. The Pilot Program creates a new avenue for scrutiny by using whistleblower disclosures about potential private healthcare fraud. The ECCP Guidance advises entities on how to structure or review compliance programs in light of these DOJ policies.
Healthcare providers should create or continue to diligently maintain rigorous compliance programs. These programs should include internal reporting systems that successfully detect and address issues before they escalate. Compliance officers should use the factors outlined by the ECCP to strengthen their programs and information channels, as well as dedicate resources to detecting and preventing both private and public healthcare fraud.
