DOJ Launches Whistleblower Program Targeting Healthcare Fraud
The U.S. Department of Justice (DOJ) is ramping up its fight against healthcare fraud by launching a new whistleblower rewards program. The initiative, unveiled last week as part of a broader "policy sprint" aimed at combating corporate crime, offers financial incentives to individuals who report wrongdoing in the healthcare industry.
To qualify for awards, whistleblowers must provide original information about violations in one or more of four key areas: financial institutions, foreign corruption, domestic corruption, or healthcare.
Within the healthcare sector, the program targets fraud involving private health insurance plans, patient or investor losses, and other violations not covered by existing whistleblower laws.
The department hopes the program will encourage reporting of misconduct and help recover taxpayer funds lost to fraud.
Impact of Health and Long-Term Care
The program targets fraud in the long-term care and nursing home sectors, which are notorious for abuse and overbilling. By encouraging whistleblowers to come forward, the DOJ hopes to uncover and prosecute cases of Medicare and Medicaid fraud, patient neglect, and other illegal activities.
"We are committed to holding accountable those who exploit our healthcare system for their own profit," said Deputy Attorney General Lisa Monaco.
This new program will empower individuals to expose fraud and protect vulnerable populations.
Whistleblowers who provide original information leading to successful prosecutions could receive awards of up to 30% of the government's recovery. The DOJ has allocated $10 million in initial funding for the program.
"With this program we're doubling down on a proven strategy to ferret out criminal activity that might otherwise go unreported, " Monaco said in a speech.
Law enforcement has long offered rewards to coax tipsters to report crimes — from the "Wanted" posters of the Old West to the reforms in Dodd-Frank that created whistleblower programs at the SEC and the CFTC. Those agencies alone have received thousands of tips, paid out many hundreds of millions of dollars, and disgorged billions in ill-gotten gains from corporate bad actors.
Experts say the program has the potential to significantly impact the healthcare industry, forcing providers to operate with greater transparency and accountability.
Monaco says that the impact of these whistleblower tips goes beyond strengthening criminal cases against the most culpable wrongdoers; they also enable the imposition of the most substantial penalties on those who deserve them the most. As the financial consequences of corporate crime increase, so too do the incentives for companies to invest in robust compliance programs.
Nursing homes across the United States have been under scrutiny for many years, including for insurance fraud and their handling of regulations. Concerns are that some facilities may be avoiding compliance due to staff either not being fully informed of the law or fearing retaliation if they report violations. This has led to significant issues in ensuring the safety and well-being of residents.
According to Human Rights Watch, systemic problems like chronic understaffing have been exacerbated during the COVID-19 virus crisis, contributing to neglect and poor care in many facilities. Staff shortages have made it difficult for caregivers to provide adequate support, and the fear of losing their jobs has prevented some staff members from reporting mistreatment or regulatory violations.
Additionally, there are reports of staff retaliation against residents who complain, creating a culture of fear that further hinders proper care. This issue is particularly concerning, given the rights of nursing home residents under both U.S. and international law, which include protection from abuse and neglect.
Deborah Buchanan, an advocate on X (formerly known as Twitter), said that the program could reward whistleblowers who help the government successfully prosecute corporate wrongdoing and incentivize long-term care workers to dig into their facilities' records, adding hassles for operators who ignore internal reports.
These concerns affect all types of long-term care facilities, but those that rely on Medicaid funding are particularly vulnerable due to the financial pressures stemming from low government reimbursement rates.
The inadequate funding often makes it challenging for these facilities to maintain sufficient staffing levels and comply with regulations, which can lead to compromised care for residents.
Medicaid covers long-term care services for individuals with limited financial resources. Health insurance, including Medicare, only pays for short-term skilled care. Private Long-Term Care Insurance will pay for all levels of long-term care for those with a policy.
However, experts emphasize that all Americans deserve quality care, regardless of the funding source—whether it comes from Medicaid, Medicare, traditional health insurance, Long-Term Care Insurance, or private funds. Ensuring equitable and high-quality care across all payment methods is essential to upholding the dignity and well-being of every individual needing long-term care.