To crack down on tax-dollar-wasting fraud in the health care and pharmaceutical industries, Indiana Attorney General Greg Zoeller is alerting Hoosiers who work in those fields that they can file whistleblower lawsuits if they know of fraud and can collect a portion of any damages awarded to reimburse public funds wrongly paid out.

With fraud on Medicare and Medicaid estimated by the federal government to be a multi-billion-dollar problem nationwide each year, Zoeller reached out on Thursday to health care and pharmaceutical workers to advise them of their rights as whistleblowers to stop fraud under the state and federal versions of the False Claims Act.

A whistleblower action under the False Claims Act starts when an individual such as an employee files a private lawsuit—using his or her own attorney—against a provider or company. By alleging the company committed fraud on a government contract, the private plaintiff brings the suit on behalf of the government as the “relator” of the allegation. The case is sealed while the state and federal governments investigate; and the seal may be extended for up to three years for good cause. The suit becomes public when the court lifts the seal, usually when the government entities join the case as intervenors.

If the governments reach a monetary settlement with the provider or company where fraud occurred or win the case at trial, then the whistleblower may receive 15 to 30 percent of the proceeds.

“If individuals on the inside are aware of fraud involving a government contract, and reporting it internally has not stopped the fraud, they may be reluctant to come forward for fear of being ostracized from future employment in their chosen profession,” Zoeller said. “While we would hope people would report fraud because that’s the right thing to do, we understand that the potential of a substantial financial reward may be necessary to prompt insiders to come forward.”

The False Claims Act has existed in federal and state law for years and applies to fraud on all government contracts such as highway and defense contracts, not just health care and pharmaceutical companies. While the federal False Claims Act exists to collect federal funds, the similar Indiana statute is for recovering state funds. Although there are basic notice requirements for employees, the availability of filing whistleblower actions is not well known to the general public or health care workers.

To encourage whistleblowers to file and in turn expose health care fraud, Zoeller is raising public awareness of the False Claims Act through informational meetings, a promotional handout, Web content, and outreach to plaintiffs’ attorneys who file such cases initially. The effort is supervised by Deputy Attorney General Allen K. Pope, director of the Attorney General’s Medicaid Fraud Control Unit (MFCU).

“The idea is to persuade workers already concerned about fraud to raise those claims under the False Claims Act,” Zoeller said. “The private citizen acts, in effect, on behalf of the government to recover public funds wrongly paid out due to fraud. That in turn triggers our office to investigate and join the suit. It is often a lengthy process, but it can achieve great results in reimbursing the taxpayers—and it’s a necessary tool to discourage and stop health care fraud.”

In previous False Claims Act cases—also called qui tam cases (pronounced “key tam”) in legal jargon—the multimillion-dollar settlement payments made by companies to reimburse public funds that were lost to fraud meant whistleblowers also received millions of dollars individually.

Health care and pharmaceutical workers who know about fraud and are interested in filing a whistleblower action should first contact a private attorney who specializes in bringing lawsuits under the False Claims Act. Filing a private lawsuit is a necessary step in order for the state and federal governments to investigate the fraud case and intervene.

The following are links to legal referral services that can steer individuals to private attorneys who can represent them in filing a private whistleblower lawsuit. These websites are for informational purposes only and the Attorney's General Office does not endorse or verify any of these websites: www.taf.org

 and www.whistleblowercenter.com

 and http://www.whistleblowers.org

Posted 8/20/2010