Historically, the U.S. Department of Justice has directed its efforts on combatting healthcare fraud by focusing on persons and companies who defraud or attempt to defraud federally funded healthcare programs, such as Medicare, Medicaid and TRICARE. To do so, the agency often relied on persons with knowledge of fraud to come forward and file a qui tam (whistleblower) lawsuit under the False Claims Act. The penalties under the FCA are steep, which is why it has been such a powerful tool to combat fraud.
Until just recently, though, fraud perpetrated against private health plans and insurance programs was not scrutinized as heavily as fraud involving federally funded healthcare programs.
Healthcare compliance programs, take notice.
Late this summer, the DOJ launched a three-year initiative entitled the Corporate Whistleblower Awards Pilot Program and updated their Evaluation of Corporate Compliance Program guidance. The program incentivizes individuals with 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.
Under this program, 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. “Corporate crime” 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 specifically focused on 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.
The ECCP guidance document summarizes the questions and considerations of prosecutors in assessing compliance programs. The DOJ analyzes compliance programs from both an employee’s perspective, as well as the entity’s governance perspective. 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.
These policies indicate a steady increase in the DOJ’s monitoring of the corporate sector. 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.
