Whistle-blowers key in health care fraud fight

ByABC News
February 22, 2012, 7:54 PM

WASHINGTON -- About 36% of the almost $16 billion recovered by the Justice Department in health care whistle-blower fraud cases has come since 2009, records show, which reflects an increased focus on fighting fraud.

A bipartisan coalition backed strengthening the False Claims Act in 2009, and the Obama administration pushed for more money and tougher fraud-fighting provisions in the 2010 health care law, said Tony West, an assistant attorney general in the Justice Department's civil division.

The health care law "allows us to use it more effectively," West said of the False Claims Act. Whistle-blower cases are one of the "primary tools" they use to fight fraud, he said. "We've made health care fraud such a high priority; we've been using this tool very, very aggressively."

In the past 20 years, whistle-blower cases have increased so they average about three times as much money back to the government as non-whistle-blower cases.

In 2011, the government broke all past records, bringing in nearly $2.3 billion in whistle-blower settlements and judgments. Since 1987, whistle-blower qui tam cases have earned about $16 billion; non-whistle-blower cases have collected about $5 billion.

Under the False Claims Act, the government can recover up to three times the amount fraudulently taken by a company, according to Justice Department spokesman Charles Miller. Large health care fraud cases often involve pharmaceutical companies either falsely advertising a product or marketing it for a use that hasn't been approved by the FDA.

HHS Secretary Kathleen Sebelius said last week that her budget included an additional $300 million to take on health care fraud.

Despite the successes, the law could be used even more aggressively, said Steven Kohn, director of the National Whistleblowers Center. The non-partisan center educates the public about the law, as well as working to protect whistle-blowers.

"About 3,500 fraud cases have not been investigated," he said, citing Justice Department figures. "Why don't they get the resources? For every case they prosecute, they bring in more money."

West agreed and said the government is moving that direction.

In 2011, the government prosecuted 417 whistle-blower cases, compared with 231 in 2008.

Three years ago, the government recovered $5 for every dollar spent fighting fraud. Recently, it increased to $7 for each $1. Government organizations, including the departments of Justice and Health and Human Services, have begun combining resources. That makes their efforts more efficient and better targeted, West said, and means that there are more resources available.

"The more resources we have, the more we can take on," he said.

Most whistle-blowers try to report fraud to company managers first and go to the government when they grow frustrated when the fraud continues, West said. "We find that their information is usually very credible," he said, but "we reject more cases than we accept. We're pretty choosy."

Justice Department action can have long-term consequences for a company, including bankruptcy, West said. That means Justice will try other steps beyond lawsuits and tend to focus on large cases that have the greatest impact, he said.

"It's not just the big cases that attract our attention," West said. "We look at whether public health is at risk."

In a 2010 case, Justice targeted a group of dentists and recovered about $25 million.

"They were engaging in practices that were absolutely barbaric," West said. One child received 16 unnecessary root canals in one sitting.