Whistleblowers Vital to Eliminating Medicare Fraud

In a recent interview with the AARP, Attorney General Sessions took a strong stance against Medicare fraud and empowering Medicare whistleblowers. Sessions stated that it’s time to consider taking Medicare fraud as seriously as the war on drugs (certainly an issue Attorney General Sessions believes to be of paramount importance).

Medicare fraud is a serious issue. It is estimated that 10% of Medicare funds are lost to fraud and waste, totaling approximately $16.2 billion. This suggests that billions of dollars, which should be directed to funding health care for our seniors, are instead going to fraudsters taking advantage of American taxpayers and the elderly.

Whistleblowers are vital to eliminating Medicare fraud. They are best situated to know about fraudulent and predatory practices. Chad Readler, the Acting Assistant Attorney General of the Justice Department’s Civil Division, has noted that “because those who defraud the government often hide their misconduct from public view, whistleblowers are often essential to uncovering the truth.”

The False Claims Act (FCA) is among the most powerful whistleblower laws on the books for uncovering fraud. It allows whistleblowers to bring cases as relators on behalf of the government and assures them between 15% and 30% of funds collected from a favorable verdict or settlement. The growth in FCA cases has been critical for uncovering Medicare fraud, and the FCA would be even more powerful if fines were higher and reward percentages for whistleblowers were increased. Of the $3.7 billion collected by the government under the FCA in 2017, nearly $3.4 billion (or 92%) came from cases initiated by whistleblowers.

Unfortunately, and counter to the Attorney General’s rhetoric, the Justice Department recently issued a memo seeking to limit the number of FCA cases. In response, Stephen M. Kohn, the Executive Director of the National Whistleblower Center, stated that the “DOJ needs to spend more resources investigating and enforcing the law, not helping companies obtain dismissals of potentially valid cases.” He added, “this is a troubling sign and an indication of misplaced priorities.”

In the interview, Attorney General Sessions says “[n]ew laws could be helpful [to stop Medicare fraud],” and that “difficulty arises from how hard it is to identify the culprits in these cases and lack of resources to invest in these time-intensive cases.” The Attorney General’s statement here is accurate, yet incomplete. Federal law enforcement officials and prosecutors must contend with limited resources and there may be a role for new legislation in curbing Medicare fraud. But first, the Attorney General should prioritize vigorously making use of already-existent laws. The January FCA memo should be shelved.

Quite simply, the DOJ will not be able to curb FCA litigation and Medicare fraud at the same time. The former is a critical tool for stopping the latter. If the FCA is reigned-in, Medicare fraud will explode. Medicare whistleblowers need to be called into action, not placed on the sideline.