Whistleblower Industry Continues to Thrive During Pandemic

It takes enormous courage to be a whistleblower and the vast majority of individuals willing to stake their careers and reputations on suing their employers don’t do it for the money. But having said that, it’s also true that winning a qui tam whistleblower lawsuit can net a whistleblower, aka relator, a not so small fortune, including up to 25 percent of whatever the government recovers from the action if it chooses to intervene.

While growth rates have tailed off somewhat since 2010, the federal government still recovers billions of dollars from whistleblowing activity targeting the health care sector each year—including $3.6 billion in 2019—with relators enjoying a big chunk of the profits. And those figures belie the true costs labs and other providers incur in defending claims that turn out to be baseless.

And lest anybody thought 2020 might have brought a lull, in late September 2020, the DOJ unveiled Operation Rubber Stamp, the largest healthcare takedown in the agency’s history charging more than 345 people across 51 federal districts, including 100 doctors, with submitting over $6 billion in false claims to public and private insurers, mostly for telemedicine services. Numbers like that are likely to fuel even more and bigger takedown-like probes in the future, experts say.

From Investigation to Fishing Expedition

The step-up in enforcement is reflected not only in the higher numbers of charges and recovery amounts but also the aggressiveness of investigators’ tactics. “Burdensome investigative demands for documents seem to be on the rise,” notes Hogan Lovells’ attorney Craig Smith quoted in a recent article from Modern Healthcare. Other attorneys cited in the excellent piece note that investigators often start with broad demands and may ask a provider for five to 10 years worth of data, requests that can cost providers tens or even hundreds of thousands of dollars to fulfill.

The investigators’ role is to gather evidence and root out wrongdoing. But investigators are, in essence, flipping the script, counting on the providers to do the extensive data analysis and prove that they did nothing wrong. And as enforcement budgets continue to tighten, lawyers expect such fishing expedition tactics to continue and grow more common.

(Excerpted from Master Guide to Clinical Lab Compliance 2021 Edition: Compliance in the Age of COVID-19)