If snitches get stitches, then there may be a need for more stitches in the coming years. The Department of Justice recently launched a new Corporate Whistleblower Awards Pilot Program. Drawing upon their experience with whistleblowers bringing qui tam cases for health care fraud involving federal payors, the DOJ has expanded the scope by allowing whistleblowers to now bring claims where only private health insurance claims are involved. 

For a long time, some providers have believed that they were effectively immune from prosecution for violating the Texas Illegal Remuneration Statute because it was rarely, if ever, enforced. This belief changed slightly with the infamous case of Forest Park and the US Attorney’s use of the Travel Act, but many providers and health care entrepreneurs believed (or maybe just hoped) that Forest Park was an anomaly and enforcement would go back to the way things had always been. The US Attorney’s office in Dallas recently brought charges against a group of physicians involved in an arrangement where no federal payors were involved, once again using the Travel Act to have the federal government enforce a state law. In these cases, the federal government has sought forfeiture of what the physicians received from the arrangements (or as the government views as illegal schedules).  

Under this new program, an individual or joint group of individuals may be eligible for a whistleblower award if they provide the DOJ with original information in writing that includes details leading to criminal or civil forfeiture exceeding $1,000,000 in net proceeds forfeited in connection with a successful prosecution, corporate criminal prosecution or civil forfeiture action. An individual is NOT eligible for an award under this new program if:

1. They are a company or another type of entity. The whistleblower must be an individual.
2. They would be eligible for an award through another US government or stator whistleblower, qui tab, or similar program.
3. They are, or were at the time they received the information, an employee or relative of an employee of the Department.
4. They meaningfully participated in the criminal activity they reported, including directing, planning, initiating, or knowingly profiting from that criminal activity. This last requirement is tricky – how are you supposed to have verifiable inside information unless you were involved in it? However, if the whistleblower was not aware of it, but comes forward once learning of the alleged malfeasance, then he or she should still be able to receive an award.

The whistleblower must have original information, and one of the subject areas to which the program applies is for violations related to (a) federal health care offenses and related crimes involving private or other non-public health care benefit programs, where the overwhelming majority of claims are submitted; (b) fraud against patients, investors, and other non-governmental entities in the health care industry, where the overwhelming majority of the actual or intended loss was to patients, investors, and other non-governmental entities; and (c) any other federal violations involving conduct related to health care not covered by the Federal False Claims Act. The individual’s submissions must be voluntary, truthful and complete. The individual must cooperate with the investigation and the investigation must lead to forfeiture. The individual may be eligible for an award based on the following calculation:

1. An award of up to 30% for the first $100 million in net proceeds forfeited.
2. An award of up to 5% of any net proceeds forfeited between $100 million and $500 million.
3. No award on net proceeds forfeited above $500 million.

You may submit your information anonymously if you are represented by an attorney. If you are submitting on your own behalf, you must include contact information so the DOJ can verify your identity. If you wish to make an anonymous submission, please reach out to your contact at Munsch Hardt and we will be happy to discuss your options to take proper action.