Medicare Whistleblower: Hospital Billing Employees

A Medicare whistleblower is a person — often someone who works in hospital billing — who reports false Medicare claims under the False Claims Act, 31 U.S.C. § 3729. If you have seen claims submitted for services that were not provided, codes that do not match the chart, or pressure from a supervisor to bill in a way that feels dishonest, this article answers the three questions you are most likely asking: Is what I saw actually illegal? Can I report it without losing my job? And is there any reason to come forward at all?

The short answers are: yes, the conduct you likely witnessed is exactly what the statute covers; yes, the law provides specific protections against retaliation; and yes, the statute provides for a meaningful financial award to the person who brings the case. Read on for the details.

What Conduct the False Claims Act Covers

The False Claims Act makes any person who knowingly presents a false or fraudulent claim for payment to the federal government — or who knowingly makes or uses a false record material to such a claim — liable to the United States. Because Medicare is a federal program, a hospital billing claim submitted to Medicare is precisely the type of claim the statute addresses.

Submitting False or Fraudulent Claims to Medicare

Section 3729(a)(1)(A) covers knowingly presenting, or causing to be presented, a false or fraudulent claim for payment or approval. Section 3729(a)(1)(B) covers knowingly making, using, or causing to be made or used, a false record or statement material to a false or fraudulent claim. Both provisions apply directly to the conduct hospital billing employees most commonly witness: claims for services not rendered, upcoded procedure codes, and false documentation submitted to support payment.

What “Material” Means Under the Statute

Under 31 U.S.C. § 3729(b)(4), “material” means having a natural tendency to influence, or be capable of influencing, the payment or receipt of money or property. In plain terms for a billing employee: if the false information affected whether Medicare paid the claim, it meets this threshold.

What “Knowingly” Means Under the Statute

Under 31 U.S.C. § 3729(b)(1), the terms “knowing” and “knowingly” mean that a person, with respect to information, 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 require no proof of specific intent to defraud. A billing employee who was pressured to submit a claim they had reason to doubt may fall within this definition even without proof that anyone intended to defraud Medicare.

How a Medicare Whistleblower Files a Case: The Qui Tam Process

The False Claims Act creates a procedure called a qui tam action, in which a private individual files suit on behalf of both themselves and the United States government. No professional license is required to file, and the process is designed to protect the person who comes forward while the government investigates.

Who May File

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 action is brought in the name of the Government. The filing individual is called a qui tam relator, and a hospital billing employee who witnessed false claims being submitted is the type of person the law contemplates.

The Sealed Complaint and Government Investigation

Under 31 U.S.C. § 3730(b)(2), the complaint is filed in camera, remains under seal for at least 60 days, and is not served on the defendant until the court so orders. The relator must also serve the government with a copy of the complaint and a written disclosure of substantially all material evidence and information the person possesses. The government may seek extensions of the seal period for good cause shown, and uses that time to investigate before deciding whether to join the case.

What Happens After the Government Decides

If the government proceeds with the action, it has the primary responsibility for prosecuting the case, and the relator retains the right to continue as a party, subject to certain limitations set out in the statute. If the government declines to proceed, the relator has the right to conduct the action independently. For a closer look at how this process applies specifically to hospital billing fraud, see our overview of hospital fraud qui tam actions.

Financial Awards Available to a Medicare Whistleblower

The False Claims Act does not leave the relator’s financial award to chance. The statute sets minimum and maximum percentages tied to whether the government intervenes, and it requires that attorneys’ fees and costs be paid by the defendant — not taken from the relator’s share.

Relator’s 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. Where the court finds the action to be based primarily on disclosures of specific information (other than information provided by the person bringing the action) from certain public sources, the court may award no more than 10 percent of the proceeds. The relator also receives an amount for reasonable expenses necessarily incurred, plus reasonable attorneys’ fees and costs — all awarded against the defendant.

Relator’s Share When the Government Does Not Intervene

Under 31 U.S.C. § 3730(d)(2), if the government does not proceed with the action, the relator shall receive an amount that is not less than 25 percent and not more than 30 percent of the proceeds of the action or settlement, paid out of those proceeds. Reasonable expenses necessarily incurred, plus reasonable attorneys’ fees and costs, are again awarded against the defendant.

Underlying Damages the Government May Recover

Under 31 U.S.C. § 3729(a)(1), a person who violates the statute is liable for a civil penalty plus 3 times the amount of damages the government sustains. Under § 3729(a)(2), if the court finds that the person furnished responsible officials with all information known about the violation within 30 days after first obtaining it, fully cooperated with any government investigation, and at the time no criminal prosecution, civil action, or administrative action had commenced and the person did not have actual knowledge of an existing investigation, the court may assess not less than 2 times the amount of damages the government sustains.

Retaliation Protections for Hospital Billing Employees

Concern about job loss is often the first thing a billing employee thinks about. The False Claims Act directly addresses this. Under 31 U.S.C. § 3730(h), 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 in furtherance of a False Claims Act action or other efforts to stop one or more violations is entitled to all relief necessary to make that person whole.

What the Law Prohibits

Section 3730(h)(1) prohibits discharge, demotion, suspension, threats, harassment, or any other discrimination in the terms and conditions of employment taken against an employee, contractor, or agent because of lawful acts done in furtherance of a False Claims Act action or other efforts to stop violations. The protection covers not only the employee directly but also associated others acting in furtherance of such efforts.

Remedies the Statute Provides

Under 31 U.S.C. § 3730(h)(2), 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.

Time Limit for a Retaliation Claim

Under 31 U.S.C. § 3730(h)(3), a civil action for retaliation may not be brought more than 3 years after the date when the retaliation occurred. A separate limitations period applies to the underlying false claims case: 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 responsible government official — whichever occurs last — but in no event more than 10 years after the date on which the violation was committed.

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 have a professional license to file a Medicare whistleblower case?

No professional license is required. 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 does not restrict who may file to any particular profession or credential. A hospital billing employee who witnessed false claims being submitted may bring a qui tam action.

Will my employer find out I filed a complaint?

Under 31 U.S.C. § 3730(b)(2), the complaint is filed in camera, remains under seal for at least 60 days, and is not served on the defendant until the court so orders. The government may seek extensions of the seal period for good cause. During the sealed period, the defendant does not receive the complaint and is not required to respond to it.

How long do I have to come forward?

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 responsible government official — whichever occurs last — but in no event more than 10 years after the date on which the violation was committed. A separate 3-year limit applies specifically to retaliation claims under § 3730(h)(3). Because these deadlines can affect your rights, speaking with an attorney who handles False Claims Act matters as early as possible may be important.