A recent study conducted by the group, Taxpayers Against Fraud Education Fund, found that whistleblowers in the healthcare industry have proved exceptionally valuable for the government and for the country. The study discovered that healthcare whistleblowers are responsible for recovering $20 billion in only the past five years, proving irrefutably how important it is for the federal and state governments to support whistleblower programs.
The data shows that whistleblower-initiated actions resulted in the recovery of $20 billion in civil and criminal healthcare fraud investigations between 2008 and 2012. These cases were brought under the False Claims Act, which allows private citizens to sue companies that have perpetrated fraud against the government. Assuming the case is successful, the whistleblower is then allowed to collect a share of the total amount awarded to the government.
The study found that of the $20 billion collected, $9.4 billion came from companies and individuals who settled qui tam whistleblower actions. Another $4.5 billion came from federal criminal fines stemming from whistleblower cases and another $4 billion came from states that collected money they also lost to fraudulent conduct. Additionally, the two largest healthcare fraud settlements in history both were the direct result of whistleblower tips, including last year's $3 billion settlement from GlaxoSmithKline.
The report documented not only the monetary value of the whistleblower efforts, but also made an attempt to quantify the return on investment. According to the study, for every dollar the government spends to fight whistleblower cases they recover more than $20. The exceptional return on investment means that whistleblower cases are not only good for society as a whole, but profoundly profitable endeavors.
Beyond the financial reasons for encouraging healthcare whistleblower actions, the cases serve another purpose; they act as serious deterrents for others who may be considering taking similarly illegal actions. Massive settlements ripple throughout the healthcare industry and serve as important reminders to others of the criminal and civil penalties that could await those who choose to flout the law.
These whistleblower actions under the False Claims Act have proven incredibly useful and appear to be on a dramatic rise. Data showed that in the six years following the passage of the modern False Claims Act (1987), only 62 whistleblower cases involving healthcare fraud were filed. Now, in each of the last two years there have been more than 400 such healthcare fraud cases filed, with 417 whistleblower actions filed in 2011 and 412 filed in 2012.
Sources:
Putting A Dollar Value On Whistleblowers by Erika Kelton, published at Forbes.com on October 29, 2013
Is it Time to Increase Investments in Health Care False Claims Act Cases? by James Swann, published at BNA.com on October 23, 2013
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