Key Takeaways:

• New Corporate Whistleblower Awards Pilot Program incentivizes the reporting of corporate misconduct with the whistleblower possibly receiving upwards of $30 million

• Healthcare insurance fraud schemes are one of the focuses of the program

• The program ensures whistleblower confidentiality

Late this past summer, the Department of Justice (DOJ) launched a new initiative to crackdown on corporate misconduct. Beginning August 1, whistleblowers can submit original information to the DOJ regarding various types of misconduct. The DOJ’s program is focused on four areas: (1) healthcare fraud schemes targeting private insurers; (2) financial institutions and their employees; (3) foreign corruption involving privately held companies and others that are not issuers of U.S. securities; and (4) domestic corruption involving companies.

This alert focuses on the first category: healthcare fraud schemes

With respect to healthcare insurers, the reported violations must pertain to: (a) federal healthcare offenses involving private or other non-public healthcare benefits programs, where the overwhelming majority of claims are submitted to private or other non-public healthcare benefit programs, (b) fraud against patients and other non-governmental entities in the healthcare industry where the overwhelming majority of the actual or intended loss was to patients, and other non-governmental entities, and (c) any other federal violations involving conduct related to health care not covered by the Federal False Claims Act, 31 U.S.C. Section 3729, et seq.

An individual may be eligible for a whistleblower award if, alone or jointly with other individuals, they provide the DOJ with original information in writing, and that information leads to “civil or criminal forfeiture exceeding $1,000,000 in net proceeds forfeited in connection with a successful prosecution, corporate criminal resolution, or civil forfeiture action.” Notably, awards are issued in the DOJ’s “sole discretion.”

While the program claims to ensure confidentiality for the whistleblower, that individual must cooperate with the DOJ in its investigation of related conduct and criminal or civil actions. This includes but is not limited to providing testimony and evidence, whether in interviews, before a grand jury, or at trial or other court proceedings. The whistleblower must also produce documents and other evidence when called upon by the DOJ. If requested, they must also work in a proactive manner under the supervision of, and in compliance with, U.S. law enforcement officers and agents.

Recommendations:

• Healthcare insurers and other corporations must strengthen their internal reporting systems and take action to prevent misconduct
• They should self-report to the DOJ if corporate misconduct is discovered
• They must identify the individuals responsible to the DOJ and cooperate with the government investigation

For more information or immediate guidance, contact:

• David E. Leach
• Caroline J. Berdzik
• Scott R. Green

Or another member of the Employment and Labor practice.