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, have certain disabilities, or have end-stage renal disease.

Medicare is not the only federally-funded healthcare program. Funds can be recovered under TRICARE, CHAMPVA, the Federal Employee Health Benefits Program (FEHB), Railroad Medicare, VA programs such as TriWest, the Federal Black Lung Program, and others.

These insurance plans funded by the federal government also fall under the umbrella of the False Claims Act and are subject to the same payout 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.

About 25% of the federal budget of the United States goes to pay for healthcare, most of which goes towards funding the Medicare program. An oft-cited statistic is that fraud accounts for 10% of that considerable amount, and so billions of dollars are lost every year to fraudsters that should be going to the care of our elderly citizens.

And so, unsurprisingly, healthcare fraud, and Medicare fraud in particular, makes up the vast majority of False Claims Act cases. In the fiscal year 2019, for example, $2.6 billion of the about $3 billion recovered by the Department of Justice from False Claims Act settlements and judgments were related to matters involving the healthcare industry. Whistleblowers receive hundreds of millions of dollars every year for initiating these cases and investigations into Medicare fraud.

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.

Whistleblower Rewards for Medicare Fraud

Very few of our clients come to us because they are looking for a payday. More often, they have witnessed a fraud being committed and they don’t know what to do about it, especially if it is their employer who won’t listen to them or correct its practices.

Regardless of your intentions in bringing the suit, if it is successful, there will be a relator’s share, and sometimes a fairly considerable one. It is important to understand how that relator’s share amount is determined and what you can do to maximize the award.

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, which only cover Medicaid.

Under the qui tam provisions of the federal False Claims Act, if Medicare taxpayer funds are recovered because of a case initiated by a whistleblower, that whistleblower is entitled to a percentage of that recovery called a “relator’s share.”

The specific percentage awarded to the whistleblower depends on which of two potential statutory categories the case falls under—i.e., whether the government intervened in the case or not—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.

If the Government Intervenes in Your Case

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 will decide whether it wants to “intervene” in the case and take responsibility for litigating some or all of the claims. Usually, this means that the government is in the process of settling the claims with the defendant, but in some rare instances, defendants choose to try their luck against the government in litigation.

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.

The specific share percentage awarded between that range is the result of negotiation – and sometimes litigation – between a whistleblower’s private counsel and government lawyers, as discussed below.

If the Government Declines Intervention

If the government declines to intervene after an investigation, 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% and 30% of the recovery.

This higher relator’s share is intended to incentivize whistleblowers and their counsel to take the risks associated with litigating these claims. However, in most instances, it still benefits the whistleblower for the government to intervene in the case. This is because it is usually able to reach a quicker and larger resolution, and if not, because they bear the costs and risks of litigating the case.

How the DOJ Decides What to Pay a Relator

After negotiation or litigation, the Department of Justice and/or the United States Attorney’s Office follow certain guidelines in how it decides how much to offer. In an intervened case, for example, they often start at 15% and then consider 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 with them or that the court will apply the same factors with the same weight. Even different U.S. Attorney’s Offices apply the factors in different ways, so the seemingly simple decision about where to file your False Claims Act complaint may have serious repercussions at the end of the case.

The False Claims Act was drafted to incentivize whistleblowers to report fraud, and Congress raised the relator’s share for that express purpose. The notion that we “start at 15%” or that the court should consider seemingly irrelevant factors like the size of the award can be challenged with the court.

Additional 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, the government 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.

You Can’t Win an Award Unless You File a Lawsuit

Whistleblowers usually come to us after they have reported their concerns internally. They even call us after having already reported to agency fraud, waste, and abuse hotlines or after having spoken to the FBI or Office of the Inspector General (OIG).

They are prepared to do whatever it takes to bring this matter to the attention of the right people in the government. They often learn that there might be compensation only after we have had the opportunity to advise them.

In some instances, the whistleblowers even work with the government for months or years as it conducts its investigation of the claims. They may even wear a wire for the FBI and risk their careers to obtain the information the government needs to prove its case.

When the government announces a big False Claims Act settlement from a case built off the whistleblower’s reporting and assistance, the whistleblower may wonder whether they are entitled to payment for their efforts in bringing the fraud to the government’s attention. Frequently, in their research, they come across a website like this one explaining that whistleblowers may receive a relator’s share when a False Claims Act case settles.

Without a Qui Tam Case, There’s No Entitlement to a Reward

You have to file the qui tam case (a) before the government files its own False Claims Act case or begins an administrative action, (b) before the government settles the claim (which it can do without filing a case), and (c) before another whistleblower files a qui tam case.

If you come to us after the government investigation is already done, even if you were an integral part of that team, there is very little we can do for you to ensure you receive payment.

If you are working with the government as a whistleblower, contact us immediately to discuss your rights. Even if it was not your intention to profit from your whistleblowing, if your voluntary actions may result in the government recovering money, you have earned a reward for your efforts.

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. 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.

You want knowledgeable attorneys handling the negotiations, and if that fails, you want skilled lawyers representing you before a court of law.

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