Proposed Rule Would Increase Rewards to Medicare Fraud Whistleblowers to Nearly $10 Million

On April 24, 2013, Health and Human Services Secretary Kathleen Sebelius announced a proposed rule that would increase rewards paid to Medicare beneficiaries and others whose tips about suspected fraud lead to the successful recovery of funds to as high as $9.9 million.

Over the last three years, the HHS has recovered over $14.9 billion in fraud, some of which resulted from fraud reporting by individuals – a proven tool in helping the government detect fraud, waste and abuse in the Medicare program. 

The proposed rule would increase the potential reward amount for individuals who report information that leads to a recovery of Medicare funds from 10 percent to 15 percent of the final amount collected. The current program caps the reward at $1,000, meaning HHS pays a reward on the first $10,000 it collects as a result of a tip. HHS is also proposing to increase the portion of the recovery on which HHS will pay a reward up to the first $66 million recovered – this means an individual could receive a reward of $9.9 million if HHS recovers $66 million or more. 

HHS believes that the proposed rule would increase the incentive for individuals to report information on those that have engaged in “sanctionable conduct.” HHS proposed these changes based on the success of the IRS reward program and hopes that the increase in the portion of the amount collected for a reward will result in success for it with an increase in Medicare fraud reports.

Individuals will only be eligible to receive a reward if the information reported relates to the activities of a specific individual or entity and specifies the time period of the alleged activities. Examples given in the proposed rule include: “billing for services never rendered, and billing for supplies not ordered. Other activities may include offers of money, goods or free services in exchange for the beneficiary’s Medicare identification number.”

The proposed rule will be published in the Federal Register on April 29, and comments will be accepted through June 28. You can view the unpublished rule here.

To read a HHS fact sheet about the proposed rule visit:

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