Title XVIII of the Social Security Act, U.S.C. §§ 1395, et seq., establishes the Health Insurance for the Aged and Disabled Program, known as the Medicare program. 

Medicare is a federal healthcare program for people who are 65 and older, who have certain disabilities, or who have end-stage renal disease. 

Like other sectors, healthcare is vulnerable to fraud. If you spot Medicare fraud and are considering becoming a whistleblower, you likely have questions about financial compensation.

Here are a few things the False Claims Act attorneys at Bracker & Marcus LLC want you to know. 

Medicare In Four Parts

First, it is essential to understand that the Medicare program consists of four parts. Medicare Part A (“Hospital Insurance”) provides basic insurance for the costs of hospitalization and post-hospitalization care. 

Medicare Part B (“Medical Insurance”) is a federally subsidized, voluntary insurance program that covers the fee schedule amount for doctors’ services, outpatient care, medical supplies, and laboratory services. 

Medicare Part C (“Medicare Advantage Plans”) is a plan offered by private insurers that contract with Medicare to provide Part A and Part B benefits. 

Medicare Part D (“Prescription Drug Coverage”) is a plan offered by private insurers approved by Medicare to provide basic insurance for prescription drugs.

Whistleblower Rewards for Medicare Fraud

Fraud committed against Medicare and exposed by a whistleblower would fall under the federal False Claims Act, as opposed to one of the many state False Claims Acts. 

Under the qui tam provisions of the federal False Claims Act, if Medicare taxpayer funds are recovered because of a whistleblower-initiated FCA case, that whistleblower is entitled to a percentage of that recovery. 

The specific percentage awarded to the whistleblower depends on which of two potential statutory categories the case falls under, which offer a range of potential relator’s shares. The exact amount is determined via a process of negotiation, and potentially litigation, with the government.

Medicare is not the only federally-funded healthcare program. Funds recovered under TRICARE, CHAMPVA, the Federal Employee Health Benefits Program (FEHB), Railroad Medicare, VA programs such as TriWest, the Federal Black Lung Program, and other insurance plans funded by the federal government also fall under the umbrella of the False Claims Act and are subject to the same relator’s share provisions for whistleblowers. 

As discussed on our “How are Medicaid whistleblower rewards paid” page, funds recovered for the Medicaid and CHIP programs may be paid differently.

Government Intervention

The Department of Justice (DOJ) or United States Attorney’s Office is statutorily mandated to investigate viable claims made by whistleblowers in federal FCA suits. False Claims Act cases are filed under seal so the government can conduct its investigation without the defendant knowing about it. The investigation can take many years as it obtains information from the government agencies, analyzes data, interviews witnesses, serves Civil Investigative Demands (civil subpoenas), and builds its case against the defendants. 

Upon the conclusion of the investigation, the government decides whether it will “intervene” in the case and take responsibility for litigating some or all of the claims. If the government does intervene and successfully settles the case or receives a judgment after winning at trial, the whistleblower is entitled to a share equal to between 15% and 25% of the financial recovery. 

This includes not only a percentage of the actual damages, but if the case goes to trial, the damages are trebled (tripled) and civil monetary penalties are assessed against the defendants, all of which are subject to the relator’s share.

Government Declines Intervention

If upon the conclusion of its investigation the government declines intervention, a whistleblower generally has the option to stand in the shoes of the government and litigate the False Claims Act case without the government’s assistance. 

This is a critical decision to make with an experienced FCA lawyer. Litigating such complex matters can be costly and time-consuming, and it is not without risk for the whistleblower. 

If a whistleblower and their lawyer litigate a declined FCA case that results in a financial recovery, the whistleblower is entitled to a heightened percentage share of the recovery equal to between 25% – 30% of the recovery. Again, the specific share percentage awarded between that range is the result of negotiation – and sometimes litigation – between a whistleblower’s private counsel and DOJ lawyers.

How the DOJ Decides What to Pay

After negotiation or litigation, the Department of Justice follows certain guidelines in how it decides how much to offer. It starts at 15% and then considers factors such as:

  • Did the Relator participate in the fraudulent conduct?
  • How quickly did the Relator report the fraud?
  • Did the Relator try to stop the fraud or report it internally?
  • Was there a safety issue in addition to the fraud?
  • How extensive was the fraud? Was it localized or nationwide?
  • How much assistance did the Relator and their counsel provide in the investigation and litigation?
  • How much did the government already know before the whistleblower reported the fraud?
  • Did the case go all the way to trial?
  • How big was the recovery?
  • What impact did filing the qui tam case have on the Relator?

However, just because these are the factors the DOJ considers when negotiating the relator’s share does not mean that we have to agree, or that the court will apply the same factors with the same weight. The False Claims Act was drafted to incentivize whistleblowers to report fraud, and Congress raised the relator’s share for that express purpose. 

So, even the notion that we “start at 15%” or that one should consider seemingly irrelevant factors like the size of the award can be challenged with the court.

Factors That Can Decrease Whistleblower Rewards

If the court determines that a whistleblower “planned and initiated” the False Claims Act violation, then the court may reduce their share of the proceeds to under 15%. 

The court is required to take into account the role of the whistleblower in advancing the case to litigation and any relevant circumstances pertaining to the violation. But the False Claims Act is not meant to incentivize someone to plan a fraud in their company just so they can blow the whistle and collect a reward, nor to provide a golden parachute to an executive who is fired after years of malfeasance.

Furthermore, if your case is based primarily on public information, the court can deviate from the normal provisions and award you between 0% and 10%. This rarely occurs, but the government generally does not want whistleblowers without unique information that benefits their investigation. 

In other words, it does not want to reward whistleblowers who simply race to the courthouse to file a case based on something they saw on the news or the internet.

The Right Healthcare Fraud Attorney Makes All the Difference

Of course, the government might not view your contributions to be as valuable as you do. The weight of the factors can also depend on where you file and which office you are negotiating with. 

Experienced False Claims Act counsel is critical to the share award process. If the whistleblower and the government cannot agree to terms, then the question of the relator’s share is briefed for the trial court to decide. 

If you have additional questions about Medicare whistleblower rewards or would like to book a complimentary case evaluation, contact Bracker & Marcus LLC at 770-988-5035 as soon as possible.