Medicare Fraud Whistleblower: Rights, Rewards & Retaliation

What Is a Medicare Fraud Whistleblower and What Can You Do?

A Medicare fraud whistleblower is a person — often a hospital billing employee — who reports false claims submitted to Medicare by filing a civil lawsuit under the False Claims Act on behalf of the United States government. Under 31 U.S.C. § 3730(b)(1), “a person may bring a civil action for a violation of section 3729 for the person and for the United States Government” — no government title, regulatory role, or law degree is required. The person filing is called a relator; the lawsuit is called a qui tam action; and the statute is the False Claims Act.

If you are a billing employee who has seen something at work that does not look right — a code that does not match the service provided, charges for procedures that did not happen, or documentation that appears altered — you may be weighing a serious personal decision. This article describes three things most people in that position want to understand: whether they can report, whether the law provides for a financial award, and whether they are shielded from being fired. Each of those questions has a statutory answer, and each is addressed below.

What Conduct Qualifies as Medicare Fraud Under the False Claims Act?

The Core Prohibition — False or Fraudulent Claims

Under 31 U.S.C. § 3729(a)(1)(A) and (B), liability attaches to any person who knowingly presents, or causes to be presented, a false or fraudulent claim for payment to the government, and also to any person who knowingly makes or uses a false record or statement material to a false or fraudulent claim. In a hospital billing context, this reaches submitted claims that misrepresent the service provided, the diagnosis, the patient, or the provider — because each such misrepresentation may constitute either a false claim or a false record material to one.

The statute’s reach is broad by design. A claim need not be submitted directly to a government officer; § 3729(b)(2) defines “claim” to include requests made to a contractor, grantee, or other recipient if the money or property is to be spent on the government’s behalf or to advance a government program or interest, and if the United States provides or will reimburse any portion of the money requested. Medicare reimbursements to hospitals fit squarely within that definition.

What “Knowingly” and “Material” Mean — and Why They Matter to You

Under 31 U.S.C. § 3729(b)(1), “knowingly” means that a person has actual knowledge of the information, acts in deliberate ignorance of the truth or falsity of the information, or acts in reckless disregard of the truth or falsity of the information — and the statute expressly states that this definition requires “no proof of specific intent to defraud.” Under § 3729(b)(4), “material” means “having a natural tendency to influence, or be capable of influencing, the payment or receipt of money or property.”

For a billing employee, these definitions matter practically. A person who observed irregular billing practices and reported them does not need to prove that hospital administrators intended to defraud the government. The statutory definition of “knowingly” is broader than specific intent, and “material” is satisfied if the false information was capable of influencing whether Medicare paid — not only if it actually did.

How the Medicare Fraud Whistleblower Process Works

Filing Under Seal — Your Identity Is Protected at the Outset

Under 31 U.S.C. § 3730(b)(2), the complaint is filed in federal court in the name of the United States government, must be filed in camera, “shall remain under seal for at least 60 days, and shall not be served on the defendant until the court so orders.” The hospital or other defendant is not notified and is not served during that period. The government may, for good cause shown, move the court for extensions of the time during which the complaint remains under seal. The sealed filing is a structural feature of the statute itself, not an unusual accommodation.

During the seal period, the relator is also required to serve on the government “a copy of the complaint and written disclosure of substantially all material evidence and information the person possesses.” This disclosure gives investigators the foundation they need to evaluate the case before any defendant learns the action exists.

Government Intervention — Two Possible Paths

Under 31 U.S.C. § 3730(b)(4), before the seal period expires, the government must either proceed with the action — in which case the action is conducted by the government — or notify the court that it declines to take over the action, in which case the person bringing the action has the right to conduct it. Under either path, the relator may remain a party. If the government proceeds, § 3730(c)(1) provides that the relator “shall have the right to continue as a party to the action, subject to the limitations set forth in paragraph (2).” If the government declines, § 3730(c)(3) provides that “the person who initiated the action shall have the right to conduct the action.” To learn more about how qui tam actions involving hospital billing fraud are structured, including the types of conduct that have drawn government scrutiny in this area, visit our hospital billing fraud practice page.

Financial Awards Available to a Medicare Fraud Whistleblower

Relator Share When the Government Intervenes

Under 31 U.S.C. § 3730(d)(1), if the government proceeds with the action, the relator shall receive “at least 15 percent but not more than 25 percent of the proceeds of the action or settlement of the claim, depending upon the extent to which the person substantially contributed to the prosecution of the action.” One important qualification in the statute: where the court finds the action is based primarily on public disclosures of specific information (other than information provided by the relator), the court may award no more than 10 percent of the proceeds. The relator is also entitled to reasonable expenses necessarily incurred, plus reasonable attorneys’ fees and costs — all of which “shall be awarded against the defendant.”

Relator Share When the Government Declines

Under 31 U.S.C. § 3730(d)(2), if the government does not proceed and the relator conducts the action, the relator receives “not less than 25 percent and not more than 30 percent of the proceeds of the action or settlement.” Reasonable expenses, attorneys’ fees, and costs are again awarded against the defendant. The precise share in any individual matter depends on facts specific to that matter; this article provides no assurance of a particular outcome.

Retaliation Protections for a Medicare Fraud Whistleblower

Under 31 U.S.C. § 3730(h)(1), any employee, contractor, or agent who is “discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment because of lawful acts done by the employee, contractor, agent or associated others in furtherance of an action under this section or other efforts to stop 1 or more violations of this subchapter” is entitled to all relief necessary to make that person whole. This protection applies whether or not a qui tam complaint has been filed — the statute covers “other efforts to stop” violations as well.

Section 3730(h)(2) specifies what that relief includes: reinstatement with the same seniority status the employee would have had but for the discrimination; 2 times the amount of back pay; interest on the back pay; and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorneys’ fees. Under § 3730(h)(3), a civil action for retaliation may not be brought more than 3 years after the date when the retaliation occurred.

If practices like these look familiar from your own workplace, you can discuss what you have seen with a Price Armstrong attorney confidentially and at no cost. Call (888) 670-9542 or use the secure evaluation form below.

Frequently Asked Questions

Do I need to be a lawyer or a government employee to file a Medicare fraud whistleblower lawsuit?

No. Under 31 U.S.C. § 3730(b)(1), “a person may bring a civil action for a violation of section 3729 for the person and for the United States Government” — the statute uses the word “person” without restriction to any professional credential or government affiliation. A hospital billing employee with direct knowledge of false claims submitted to Medicare may bring a qui tam action under this provision.

Can my employer fire me for reporting Medicare billing fraud?

The False Claims Act expressly addresses this concern. Under 31 U.S.C. § 3730(h), an employee who is discharged, demoted, suspended, threatened, or harassed because of lawful acts taken in furtherance of a False Claims Act action — or other efforts to stop violations — may be entitled to reinstatement, two times back pay, interest, and compensation for special damages including attorneys’ fees. A retaliation claim must be brought within 3 years of the date the retaliation occurred.

How long do I have to file a False Claims Act qui tam complaint?

Under 31 U.S.C. § 3731(b), a civil action may not be brought more than 6 years after the date on which the violation was committed, or more than 3 years after the date when facts material to the right of action are known or reasonably should have been known by the official of the United States charged with responsibility to act — but in no event more than 10 years after the date on which the violation was committed, whichever period expires last. Because these limitations interact and depend on specific facts, speaking with an attorney who handles False Claims Act matters as early as possible may be important to preserving your rights.