Archive for March, 2015

Bharara Says Whistleblower Awards May Aid Corruption Fight

Wednesday, March 18th, 2015

Speaking at a Fordham University School of Law event on Friday, March 6, U.S. Attorney for the Southern District of New York, Preet Bharara said that whistleblower bounties and leniency agreements could be useful tools for uncovering public corruption. Bharara is the latest law enforcer to endorse the benefits of rewarding tipsters who come forward with information about misconduct.

Bharara noted that other federal statutes, including the False Claims Act and the Dodd-Frank Act, already offer payments to whistleblowers, and the U.S. Department of Justice’s antitrust division runs a “first-in-the-door” leniency program for individuals and companies who are first to approach the government with a confession of participating in criminal antitrust violations. Bharara also noted that the law allows prosecutors some discretion to seek leniency for those who cooperate in other investigations. “If there is some proposal that would not unduly let blameworthy people off the hook but would simultaneously help to bring more blameworthy people in the system, that’s obviously something people should look at carefully because it has worked in other contexts.

Bharara’s comments were not part of any formal proposal, but they echo other calls to ramp up the government’s ability to offer incentives to recruit individuals to come forward with evidence of wrongdoing that might otherwise not makes its way into the government.

On Feb.26, New York Attorney General Eric Schneiderman announced plans for legislation to create a whistleblower rewards and protection program, a program modeled after the U.S. Securities and Exchange Commission program instituted following the Dodd-Frank Act.

In September of last year, U.S. Attorney General Eric Holder called for increasing the rewards available for whistleblower tips made pursuant to the Financial Institutions Reform, Recovery and Enforcement Act. As it stands, the law caps these awards at $1.6 million, markedly smaller than the multibillion-dollar penalties that government has imposed upon big financial institutions under FIRREA.

Whistleblower Protection Caucus Created by Bipartisan Group of Senators

Tuesday, March 17th, 2015

The official founding of a Senate Whistleblower Protection Caucus was announced on February 25, 2015 by Senator Charles Grassley (R-IA). This is a cross-party group of senators created by Senators Chuck Grassley (chairman), Ron Wyden (D-OR) (vice-chairman), Ron Johnson (R-WI), Mark Kirk (R-IL), Deb Fischer (R-NE), Thom Tillis (R-NC), Barbara Boxer (D-CA), Claire McCaskill (D-MO), Tammy Baldwin (D-WI), and Ed Markey (D-MA).

The National Whistleblower Center released a report on just how whistleblowers are essential to protecting the United States from fraud. The report is titled, “Utilizing Whistleblowers in the Fight Against Waste, Fraud and Abuse.” The Executive Director of the National Whistleblower Center, Stephen M. Kohn, stated, “This is an example of bipartisanship which makes our system work.” Furthermore, Kohn said, “The National Whistleblower Center looks forward to working with the Senate Whistleblower Protection Caucus to ensure all whistleblowers obtain meaningful protection.”

HHS Announces Goal to Tie More Medicare Payments to Quality

Tuesday, March 10th, 2015

On January 26, 2015, the U.S. Department of Health and Human Services (HHS) announced an initiative to base more Medicare provider payments on the quality of care provided.  HHS has set goals for the use of alternative payment models in the next three years.

Medicare payments have traditionally been based on a fee-for-service where providers receive payment for each individual health care service provided.  Some feel this method encourages high volume care rather than high value or coordinated care.  Conversely, alternative payment models such as accountable care organizations (ACOs), primary care medical homes, or bundled payments for episodes of care endeavor to link provider payments to quality of care and encourage providers to be more cost-efficient.

In the announcement, HHS established goals both for alternative payment models and for tying payments to quality or value generally.  HHS’ goal is to 30 percent of fee-for-service Medicare payments to quality or value through alternative payment models by the end of 2016 and to tie 50 percent of fee-for-service payments to alternative payment models by the end of 2018.  Generally, the agency aims to tie 85 percent of all traditional Medicare payments to quality or value by 2016 and to tie 90 percent of all Medicare payments to quality or value through programs such as Hospital-Based Purchasing and Hospital Readiness Reduction Program.

Additionally, the agency is creating a Health Care Payment Learning and Action Network to expand the use of alternative payment models beyond Medicare.  Through this network HHS will work with private payers, employers, consumers, providers, states, state Medicaid programs and other partners.

The announcement came after a meeting with health care leaders including representatives from health insurance companies, CVS health, and organizations such as the AMA, American Hospital Association, and the National Partnership for Women and Families.

The AMA issued its own press release in support of the initiative.  “Patients benefit when physicians have the flexibility and resources to redesign care, and when payers provide new payment models that can support physician efforts to improve patient care and lower health care costs over the long-term” said AMA President Robert M. Wah.

Two current alternative payment models are the Medicare Shared Savings Program and the Bundled Payments for Care Improvement Initiative.  Under the Medicare Shared Savings Program, providers participate by joining an ACO.  ACOs are generally groups of health care providers that share financial incentives to improve the quality and efficiency of care provided to a population of patients.  With Bundled Payments for Care Improvement Initiative, organizations must meet financial and performance goals for episodes of care.

The AMA notes that ACOs incur costs for care management, consultation between different physicians, and other services not reimbursed by Medicare fee-for-service payments.  In order to remove these financial barriers, the AMA recommends that CMS provide monthly care management payments; provide partial capitation payments; and establish low-cost or federally guaranteed loan programs.

Physicians considering involvement with and ACO or any other alternative payment model, should consider the investment required to join and the overall financial and organizational risk of the arrangement.

2014 Whistleblower Recoveries

Tuesday, March 10th, 2015

In 2014, the total whistleblower recoveries amounted to just shy of $3 billion, $2.2 billion (73 percent) of which were in the health care arena.

When the Department of Justice announces a False Claims Act recovery, they put the total recovery into the headline (the total amount that the fraudster is paying as a result of the FCA action), this includes state Medicaid recoveries and Criminal penalties triggered by FCA investigations.  However, when the DoJ announces their recoveries at the end of the year they leave the state and criminal recoveries off the table.

An example may be seen in the Johnson & Johnson matter announced in November 2013.  The Department of Justice initial press release states that $2.2 billion was recovered in this matter, but nearly $500 million of the $2.2 billion was a criminal penalty and over $500 million went to states.  Half of the total recovered is actually counted in the federal FCA statistics.

Ultimately, there is no evidence that the total fraud recoveries in the health care arena are going down.  FCA actions were very high in 2014, almost entirely due to non-qui tam banking cased that are listed in the non-HHD and non-DOD part of the report.  The total FCA number jumped from $422 million (FY 2013) to $3.3 billion (FY 2014), of which $2.6 billion was brought in from non-qui tam cases.

Whistleblower Protection Caucus Created by Bipartisan Group of Senators

Monday, March 2nd, 2015

The official founding of a Senate Whistleblower Protection Caucus was announced on February 25, 2015 by Senator Charles Grassley (R-IA). This is a cross-party group of senators created by Senators Chuck Grassley (chairman), Ron Wyden (D-OR) (vice-chairman), Ron Johnson (R-WI), Mark Kirk (R-IL), Deb Fischer (R-NE), Thom Tillis (R-NC), Barbara Boxer (D-CA), Claire McCaskill (D-MO), Tammy Baldwin (D-WI), and Ed Markey (D-MA).

The National Whistleblower Center released a report on just how whistleblowers are essential to protecting the United States from fraud. The report is titled, “Utilizing Whistleblowers in the Fight Against Waste, Fraud and Abuse.” The Executive Director of the National Whistleblower Center, Stephen M. Kohn, stated, “This is an example of bipartisanship which makes our system work.” Furthermore, Kohn said, “The National Whistleblower Center looks forward to working with the Senate Whistleblower Protection Caucus to ensure all whistleblowers obtain meaningful protection.”