DOJ Health Care Fraud Whistleblower Program Expands to US Attorney Offices

Within weeks of DOJ’s launch of a new Corporate Whistleblower Awards Pilot Program (DOJ Program), several of the largest US Attorney’s Offices (USAOs) have followed suit, introducing their own iterations of pilot programs designed to encourage whistleblowers to report health care fraud and other corporate crimes (USAO Programs). The DOJ and USAO Programs signal a heightened focus by regulators on identifying, investigating and prosecuting corporate misconduct that might otherwise go undetected or be difficult to prove, including violations of federal health care laws involving private payers and other offenses not covered by the FCA.

DOJ Program¹

The three-year DOJ Program, which began on August 1, 2024, offers awards to eligible whistleblowers who provide original and truthful information that results in a “successful forfeiture,”² including information relating to the following as relevant to health care providers:

• “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 to private or other non-public health care benefit programs”;

• “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

• “any other federal violations involving conduct related to health care not covered by the [FCA].”

The scope of the DOJ Program opens providers up to new risks from whistleblowers. While the FCA’s qui tam provisions are limited to federally funded health care programs, including Medicare and Medicaid, the DOJ Program explicitly incentivizes individual whistleblowers to report fraud involving private payers, patients, investors and other non-governmental entities, encompassing a broad range of conduct outside the scope of the FCA. (Indeed, the DOJ Program explicitly excludes conduct for which a whistleblower would be eligible for an award under the FCA or another federal program.)

The DOJ Program incentivizes whistleblowers in different ways depending upon their role, if any, in the reported scheme:

• Where the whistleblower played no role in the reported scheme, or a “minimal role” sufficiently limited such that the individual could be described as “plainly among the least culpable of those involved in the conduct of a group,” and the information leads to forfeiture exceeding $1,000,000, the whistleblower may receive an “award of up to 30% of the first $100 million in net proceeds forfeited” and an “award of up to 5% of any net proceeds forfeited between $100 million and $500 million.” Two items should be emphasized. First, whether an individual is eligible for an award, and the amount of any such award, are within the “sole discretion” of DOJ. Second, an employee who reports misconduct through internal company systems is eligible for an award, provided the individual also reports the activity to the DOJ Program within 120 days of their initial internal report.³

• Whether or not the whistleblower is determined by the DOJ to be eligible for an award on account of the individual’s culpability, the whistleblower may also be eligible to receive a non-prosecution agreement through the Criminal Division Pilot Program on Voluntary Self-Disclosures. The DOJ will assess eligibility for a non-prosecution agreement as part of the DOJ Program review, and so reporting individuals need not separately submit information under the Criminal Division self-disclosure program.

USAO Programs

To date, the following USAOs have announced similar but distinct USAO Programs:

While these USAO Programs vary, particularly in the degree of specific guidance that is provided, each encourages whistleblowing across a broadly defined universe of illicit activities, including financial crimes, corporate misconduct, public corruption, and healthcare fraud. While the USAO Programs do not provide for any financial awards, they do provide for discretionary non-prosecution agreements for whistleblowers who make voluntary submissions and fully cooperate with authorities.

Takeaways

Since commencing on August 1, 2024 the DOJ Program already has received tips from more than 100 individuals.⁴ While it remains to be seen whether, and the extent to which, these tips will result in investigations, litigation, or other enforcement action, it seems safe to assume that the DOJ and USAO Programs will result in an increase in the overall scrutiny of provider conduct in the commercial health care space. In response, providers should evaluate their existing compliance frameworks to ensure effective measures are in place to prevent, detect, remediate and/or self-report potential misconduct in the areas covered by these Programs.

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1. The DOJ published guidance on its pilot program upon its launch on August 1, 2024. Dep’t of Justice, “Department of Justice Corporate Whistleblower Awards Pilot Program” (Aug. 1, 2024), https://www.justice.gov/media/1362321/dl?inline. ↩︎
2. There is “successful forfeiture” where the DOJ obtains a final order of forfeiture, civil judgment of forfeiture, or administrative declaration of forfeiture related to assets obtained as a result of an individual’s submission, and those assets are deposited in the DOJ Assets Forfeiture Fund. Id. at § II.7.A; see also 28 U.S.C. § 524(c) (outlining availability of DOJ Assets Forfeiture Fund to pay awards for information or assistance leading to a civil or criminal forfeiture). ↩︎
3. The DOJ Program requires that whistleblower reports be submitted through its Intake Form. ↩︎
4. Mengqi Sun, DOJ Sees Tips Flow in Over First Month of Pilot Whistleblower Program, Wall St. J. (Sept. 18, 2024), https://www.wsj.com/articles/doj-sees-tips-flow-in-over-first-month-of-pilot-whistleblower-program-d2915104. ↩︎