Earlier this month, the Department of Justice (DOJ) predicted Criminal Division Corporate Whistleblower Award Pilot Program (the “Pilot Program”) will go into effect on August 1, 2024 and will continue for three years. Deputy Attorney General Lisa Monaco stated: explanation The pilot program, which launched earlier this year, aims to offer individuals with knowledge of wrongdoing at private companies a financial incentive to report the misconduct. It follows a series of policy changes recently announced by the Department of Justice, including: Corporate Voluntary Disclosure Policy (“Corporate VSD Policy”) and Pilot Program on Voluntary Individual Self-DisclosureMonaco describes this as a “mix of carrots and sticks to promote responsible corporate citizenship.” In particular, the revised Corporate VSD Policythe enterprise is entitled to a presumption of resignation (i.e..Companies can avoid criminal charges and be sentenced if they self-report information they receive from a whistleblower to the Department of Justice within 120 days.
These programs reflect the Department of Justice’s focus on combating corporate crime and fraud across many industries and complement existing policies addressing the health care industry. Department of Justice False Claims Act Reporting Program, Department of Health and Human Services Office of Inspector General (OIG) Whistleblower Protection Program,and Centers for Medicare & Medicaid Services (CMS) Self-Referral Disclosure ProtocolIn light of these recent announcements, businesses, including those in the healthcare industry (especially those that serve privately insured and self-pay patients primarily), should consider implementing robust compliance programs to facilitate the identification and remediation of non-compliance and potential wrongdoing, and to create a culture of compliance within their organizations.
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Pilot Program Focus
Her Keynote Speech In a speech to the American Bar Association in March, Attorney General Monaco explained that one of the key objectives of the new pilot program is to address areas of corporate misconduct not previously covered by other federal reporting programs. To this end, the pilot program is focused on receiving unique information from four “program areas” of corporate crime, including: (i) crimes involving financial institutions, (ii) foreign corruption and bribery, (iii) domestic corruption and bribery, and (iv) private sector health care fraud. Pilot Program Guidance Here’s how he describes medical fraud:
(a) Federal health care and related offenses involving private or other non-public health care benefit programs (where a preponderance of the claims are submitted to private or other non-public health care benefit programs); (b) fraud against patients, investors, and other non-governmental entities in the health care industry (where a preponderance of the actual or intended losses are to patients, investors, and other non-governmental entities); and (c) other federal offenses involving health care-related conduct not covered by the federal False Claims Act (31 U.S.C. § 3729). onwards.
To strengthen its gap-closing objective, the Pilot Program Guidance clarifies that a potential whistleblower is not eligible for an award under this program if he or she “would be eligible for an award through another U.S. government or statutory whistleblower, qui tam, or similar program if he or she had reported the same original information to that other program.”
This is especially noteworthy for health care providers that do not accept Medicare, Medicaid, or other federal health care programs and have traditionally not been subject to CMS and OIG reporting and disclosure protocols. These providers, particularly concierge health clinics, direct-to-consumer digital health solutions, and point-of-care solutions offered exclusively to employee-directed plans, should be aware that the pilot program encourages reporting of wrongdoing and demonstrates DOJ’s intent to hold these organizations accountable.
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Pilot Program Eligibility Requirements
Under the pilot program, to be eligible for a reward, a potential whistleblower must (i) “provide original truthful information about criminal activity related to one or more of the designated program areas described above” and (ii) “result in a net forfeiture of more than $1 million.”
Under this program, information is considered “original” if it (i) “is derived from an individual’s independent knowledge or independent analysis,” (ii) “is nonpublic and not previously known to the Department,” and (iii) “substantially adds to information already in the Department’s possession.” If a whistleblower initially reports this information through a company’s whistleblower or internal reporting process, the information is still considered “original,” and the Department will treat the date the individual provided the information to the company’s internal reporting organization as the date of initial disclosure to the government.
The important thing is that the information do not have Under the program, information is considered original if it is obtained “through communications covered by attorney-client privilege” or “contained entirely in a judicial or administrative hearing, government report, inquiry, audit, investigation, or allegation made in the news media.” The pilot program guidance further explains that information is not “original” if it is based on information received as an “officer, director, trustee, or partner” or as “an employee whose primary duties include compliance or internal audit responsibilities.”
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Communicating with whistleblowers and cooperating with government ministries
Like other federal whistleblower programs, the pilot program offers confidentiality protections for information submitted by individuals. But the program also raises questions about how far the Department of Justice will go to obtain information from whistleblowers and encourage their cooperation. For example, the pilot program guidance states that if a director, officer, or member of a company represented by an attorney discusses a possible criminal violation with the Department of Justice, the Department is permitted to talk with that individual “about the possible criminal violation.” Without the consent of the organization’s legal counselHowever, these communications may be further restricted under applicable state no-contact rules, which generally prohibit communications with representatives or corporate associates regarding the subject matter of the representation.Similarly, the pilot program further warns companies that any action taken to “obstruct” communications with the Department of State, including the enforcement of non-disclosure agreements, may result in obstruction charges.
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Key Takeaways
Since the pilot program’s stated purpose is to generate more claims and create “competition” between individuals and businesses, businesses should consider the following:
- Healthcare providers who already submit claims to government payers (i.e..Medicare and Medicaid programs) should already have systems in place to monitor their internal compliance and identify issues with government billing. Because the pilot program focuses on health care fraud, specifically billing private insurers, companies should expand the scope of their existing policies to include claims submissions to private insurers and self-pay patients, if they haven’t already done so.
- Healthcare providers should ensure that audit and monitoring programs are reviewing coding and claim submission practices. All ServicesCorrect identified non-compliances, including the return of overpayments received through known error or fraud, as well as those billed to government payment programs.
- Healthcare professionals should review their marketing and advertising materials to ensure they are accurately communicating their services to patients, investors and customers, as intentional misrepresentations can be considered fraud.
- Healthcare professionals should consider the potential for abusive or fraudulent patient acquisition strategies. In particular, professionals should evaluate whether such strategies involve conduct that could be perceived as bribes or kickbacks to third parties for referrals.
- All health care providers should have an internal reporting process, such as a compliance hotline or mailbox, that allows employees, contractors, and patients to report noncompliance confidentially and anonymously, and gives the company an opportunity to review and investigate allegations before individuals report to the Department of Justice. When individuals feel their compliance concerns are being adequately addressed by their company, they are less likely to report externally. The Department of Justice also recommends that: Corporate Compliance Guidance An effective internal reporting process is a “hallmark” of an effective compliance program.
- In light of recent amendments Corporate VSD PolicyCompanies should evaluate their internal investigation protocols and procedures to ensure they have sufficient time to complete internal risk assessments and decide whether to self-report to the DOJ within the new 120-day period. The protocols should: WhoWithin the organization, oversee internal investigations and, where necessary, when Consult outside counsel.
