We continue with our series of articles penned by one attorney, an MD, JD, giving you a view of the world through a malpractice plaintiff attorney’s eyes. In this article, the author addresses “Blowing the whistle.” This attorney is a seasoned veteran. The series includes a number of pearls on how to stay out of harm’s way. While I do not necessarily agree with 100% of the details of every article, I think the messages are salient, on target, and fully relevant. Please give us your feedback – and let us know if you find the series helpful.

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Your hospital has a new CEO who slashed the nursing staffs below that allowable by the Joint Commission. The hospital continues to use its prior approval by the Joint Commission as the basis to bill Medicaid under state requirements, including for patients whom you saw in your role as a hospitalist. You are not just concerned you may be drawn into the fraud but that patient care is being severely compromised by the cut-backs. Revealing the fraudulent billing would stop both.

The other vascular surgeon in your small community has been the bane of your existence – trying to poach patients and even trying to drag you in front of a peer review committee on baseless charges. You just became aware he sends his Medicare patients to a diagnostic lab run by his son and receives a percentage of those billings in violation of Stark. Turning him in would get him out of your hair and would frankly make you feel pretty good.

Do you blow the whistle in either case?

Well, there are few things to consider.

Your own state undoubtedly has a whistleblower statute which will have its own terms. Since most parallel the federal False Claims Act (FCA) let’s look at that as an example.

1. Will I be protected?

The answer is you will be protected if you are turning in a facility or group you work at, but only in a protracted fashion through the ability to bring a lawsuit.

The federal False Claims Act was created to encourage the reporting of fraud against the government, such as in Medicare and Medicaid billing or through violations of Stark or the Anti-Kickback Statute, by offering protection from retaliation. If you are harmed – any action from intimidation and threats to demotion or denial of advancement to suspension and termination – because you acted to expose fraud, the FCA gives you standing to sue your employer or where you work for your damages.

That last point is important. These protections originally applied only to bona-fide employees. But in 2009, anti-retaliation protections were extended to include a defendant’s contractors and agents, which include non-employee physicians.

This is particularly critical to a doctor considering blowing the whistle because the most common form of retaliation against a non-employee physician will be a sham peer review. Courts are largely unwilling to entertain lawsuits based on sham peer review. The deference to the peer review process is so strong that even a proven improper motive for the peer review is often held to be insufficient grounds for the physician to pierce the committee’s immunity.

The updated FCA now provide physicians who are not employees with a greater degree of legal protection against a peer review proceeding if only initiated to retaliate for whistleblowing.

To first come under the FCA, you need to prove that you made efforts to stop or correct the improper conduct. However, this is actually a less daunting requirement than it seems. It is sufficient if you notify the appropriate individual or department that you are concerned about, for example, improper billing.

To obtain the protection of the anti-retaliation statute (31 U.S.C. § 3730 h):

• You have to have had a good faith belief that the defendant violated the FCA.
• You have to have been engaged in a protected activity, such as investigating whether actual was occurring.
• The defendant had to have known you were engaging in a protected activity.
• The defendant still retaliated against you because you engaged in that protected activity.

The statute then provides remedies including litigation costs, reinstatement with the same seniority status, double back pay and interest on back pay. There are no punitive damages under this statute – the premise is that you should be returned to what you were before the retaliation and that should be it.

If you meet these criteria and are willing to take on the risk of protracted risky litigation, then you can consider proceeding.

Remember, the anti-retaliation statute does not address a separate physician or facility. So if you decide to blow the whistle on your competitor, you may be sued in turn by him for defamation or for tortious interference with business. His lawsuit against you will not be considered retaliation – he is not your employer and so exerts no control over you and you are not his contractor or agent, and it is his right to bring a cause of action against you if he feels that you have wronged him.

2. Is there something in it for me other than doing the right thing?

There can be.

You may be able to file a qui tam lawsuit under the FCA 31 U.S.C. § 3729. This is an abbreviation of “qui tam pro domino rege quam pro se ipso in hac parte sequitur”, which means “[he] who sues in this matter for the king as [well as] for himself.”

You would actually be suing on behalf of the Federal Government as well as on your own behalf as a concerned citizen.

And, the government, such as the Department of Justice, may join you in your case.
The first issue is whether you can even bring the action, whether you are a “qualified relator”:

• You must have direct and personal knowledge of the fraud.
• You cannot be an employee of the armed forces.
• No one has already filed a qui tam case on the same matter already.
• You have already provided the information to the government before filing your own lawsuit.
• The information that you are bringing forward must not have already been publicly disclosed (caveat that this is a very broad definition that the defendant will be able to take advantage of).
• The government must not already be pursuing the claim.

Qui tam cases under the FCA are for treble damages (three times what the difference is between what the government paid and what it should have paid) plus civil penalties of between $5,500 and $11,000 for each false claim, with each individual submission being an individual claim.

The eventual verdict or settlement may therefore be huge.
You will receive a percentage of that settlement or judgment for your efforts in bringing the fraud to the attention of the government and then prosecuting the lawsuit.

The actual percentage will depend on whether your own hands are clean in the matter, how much work you and your counsel actually did on the case and whether the government intervened. It will be from 10% to 30%., with most cases averaging at about 15%.
You will also receive reasonable attorney’s fees.

Your risk is that if the case is lost, the government is not responsible to pay your expenses. In this regard, you should look strongly at whether the government chooses to intervene. 95% of cases where there is such intervention, the outcome is successful; while only 5% of cases the government declines to intervene yields a favorable result for the whistleblower.
You should also consider that your identity will likely become known.

Qui tam complaints remain under seal for up to 60 days. During that time the whistleblower’s identity will be kept confidential except to any involved government investigators and to the court itself. If the government decides to intervene it will petition to keep the seal active during the entire investigation, but you should not bank on such a request being granted. This is a significant matter because the investigation may take up to three years. You could be exposed before having your day in court.

If the complaint is still sealed – that is, not yet been served on the defendant- and the government has intervened and wants to negotiate a settlement with the defendant, the DOJ will request an Order to partially unseal the complaint, keeping your name redacted. However, the more specific the matters are the more likely the defendant will figure out who you are.

Your identity will always be revealed once a judgment or settlement is reached.

You could bring an action in either of our hypotheticals. It may be your preferred route in the second case in which you would be otherwise unprotected from retaliation if you merely reported.

3. Do I need a lawyer?

Yes!

Obviously you will need an attorney if you are actually bringing a qui tam lawsuit, but you need an attorney if you are even considering making a complaint. Despite what Hollywood may show, whistleblowing is not something you should attempt on your own.
First consult with an attorney with specific expertise in this area and conversant not just with the FCA but with the patchwork of state statutes that cover this area.

A very important role of the attorney may be to talk you from jumping off the ledge.

You do not have to be correct in your belief there was misconduct to come under the anti-retaliation statute. But you must be able to demonstrate that you believed there was an actual violation of one of the seven predicates for FCA liability. If, however, there was just an isolated error rather than a pattern but you failed to investigate before you made a report or if you misinterpreted what the law prohibits but reported anyway, then you may not be covered under the FCA and could be liable to those you reported.

If you are outside the protection of the anti-retaliation statute, as in our second hypothetical, you want to be even more circumspect in your choice to proceed, particularly if your judgment may be clouded by a desire for revenge.

Having an expert attorney review your situation before you begin will prevent you from falling into the trap of self-convincing.

You will also want to be represented even before you consider filing a qui tam case because you must meet the requirement of having already disclosed what you know to the government. Your attorney will set up a meeting with the U.S. Attorney and the individual charged with enforcement so that disclosure is conducted properly, preserving your option to participate in the case and your right to a share of what is recovered.

4. What about confidentiality laws?

Evidence in an FCA case will most likely be the medical records of patients whose cases were improperly billed, patients who did not consent to having their records revealed to government investigators, attorneys or, well, you for that purpose.
However, HIPAA has an exception to cover this situation. It authorizes whistleblowers who are “workforce members” of the covered entity or a business associate to divulge protected health information as part of whistleblowing.

Before you go through files of patients you have never treated and whose files you have no authorization to access privately, leaving behind a paper “sign-out” trail in the Medical Records department or an electronic fingerprint in the EHR, you must talk to your lawyer.

He will advise you how to proceed according to not just HIPAA but also state confidentiality laws, which are often stricter than HIPAA. The first issue is what “workforce” means.

The statute covers “employees, volunteers, trainees, and other persons whose conduct, in the performance of work for a covered entity, is under the direct control of such entity, whether or not they are paid by the covered entity.

If you are an employed physician you are obviously covered. However, if you are an independent physician with privileges at the hospital you would conceivably not be covered. By-laws might be interpreted as “control” and your participation in a quasi-administrative role such as a committee member might be interpreted as a degree of employment. Do not try to parse this yourself because the penalties for HIPAA violations are stiff. Evaluate with an experienced attorney.

If you are an appropriate individual under the exception, you can then proceed if:

• Your action is undertaken in good faith that the covered entity engaged in the unlawful conduct.
• The disclosure is to a governmental oversight/investigative authority, an accreditation organization or your own attorney (to help you determine your options).

As you proceed, you must bear in mind that the usual limitation under HIPAA and state confidentiality laws still applies: the information divulged must be the minimum needed to accomplish the purpose (e.g.; just the medical records number as an identifier and the fact that the patient is on Medicare) and the disclosure must be to the minimum number of people (e.g.; to your lawyer’s paralegal who is also working on the case but not to the summer intern working in the U.S. Attorney’s office who is doing general office work) required to carry out that purpose.

5. What else do I need to consider?

Assume your actions will become public and that your life will become unpleasant.
Bear in mind that the only remedy you will likely have is a later lawsuit of your own.
You have to not just think hard before you act but make sure that you have the financial wherewithal to carry on for several years if you have less or no income.

None of this is said to discourage you from doing what you feel is right, but in a world in which good deeds are sometimes punished, you must first make sure you protected yourself before you begin.

In summary: Whistleblower protection statutes at both the state and federal levels permit a physician who has revealed fraud to sue if they are then discriminated against but do not apply to a non-employment setting. Qui tam lawsuits allow the whistleblowing physician to share in the damages. There is a HIPAA exception to allow whistleblowers limited access to confidential records. No whistleblowing action should be undertaken without the advice of an attorney with experience in this area.