Whistleblowers gain power in government anti-fraud efforts

The power of whistleblowers to expose fraud is growing in the healthcare and pharmaceutical industries, according to a Live Science article by attorney Neil Getnick. "Whistleblower laws and cases are not only here to stay," Getnick wrote, "but their impact is about to get even greater."

Acting Associate Attorney General Stuart Delery recently emphasized the U.S. Department of Justice's commitment to preserving "a strong and effective False Claims Act." Delery stressed the importance of collaboration among government, whistleblowers and their attorneys to protect taxpayer-funded insurance programs and called for "a renewed emphasis on ensuring that settlements include clear public statements about the misconduct giving rise to [False Claims Act] violations."

September was a milestone for healthcare whistleblowers: Shire Pharmaceuticals agreed to repay $58.9 million, and other false claims cases involving medical devices, skilled nursing facilities, and surgical and medical centers settled to the collective tune of $13 million, Getnick noted. Annual False Claims Act civil recoveries now average more than $3.7 billion, the article added, not including criminal fines and other costs. All this reinforces the message to companies that "good conduct is good business," Getnick wrote.

A recent National Public Radio article described the False Claims Act's origins in the Lincoln administration, and how the law was taken out of mothballs in the 1980s to encourage fraud reporting in the defense industry. (Remember the stories of $400 Pentagon hammers?) Authorities then found that the law helped claw back dollars lost to healthcare fraud.

For example, Elin Baklid-Kunz worked for Halifax Health in Florida for more than 20 years. She noticed apparently fraudulent Medicare claims amounting to hundreds of millions of dollars annually, but her bosses turned a deaf ear when she raised the issue, NPR reported. Baklid-Kunz was ostracized at work in the years it took the government to develop its case against the Florida hospital system.

Halifax eventually settled with the government for $85 million, with Baklid-Kunz pocketing about $20 million. But she was disappointed that her bosses weren't punished, NPR noted. That loophole may close shortly, since heightened anti-fraud efforts by the DOJ may lead to more frequent criminal prosecution of executives.

For more:
- read the Live Science article
- here's the NPR piece

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