Whistleblowers who disclose fraudulent practices, false billings, and inflated charges submitted to Medicare provide a valuable benefit to taxpayers. Attempts by health care providers to engage in fraudulent Medicare billings often are exposed through qui tam actions brought by former employees of the offending medical care provider. Although employees that disclosed financial malfeasance through the False Claims Act facilitated the recovery of a staggering $5.7 billion in 2014, health care providers frequently attempt to silence whistleblowers by threatening civil liability based on violation of confidentiality agreements. A recent decision by a federal district court in New York offers protection to whistleblowers in this situation by carving out a public policy exception to confidentiality agreements.
In U.S. et al. ex rel. Ortiz et al. v. Mount Sinai Hospital et al., the relators (whistleblowers) alleged that Mount Sinai Hospital and several other affiliated entities engaged in improper billing and wrongful payment retention practices. The health care providers filed a motion to dismiss the False Claims Act action based on the relator’s use of confidential patient records in violation of confidentiality agreements between the parties. This defense strategy is significant because the success of qui tam actions often turn on confidential information that would not be readily available to anyone other than an employee or manager subject to nondisclosure or confidentiality agreements.
The court in evaluating the use of confidential information emphasized the important public policy of protecting whistleblowers who disclose fraud committed against the government. The court rejected the contention that a nondisclosure or confidentiality agreement could trump the False Claims Act’s strong public policy of encouraging whistleblowers to report financial malfeasance that fraudulently dissipates public health care dollars. The court also noted the relator’s allegation that HIPPA carves out a special exception that permits whistleblowers to provide information to government entities and private attorneys based on a good faith belief regarding unlawful acts.
Decisions like this one are important because health care providers that defraud Medical often attempt to hide behind confidentiality agreements to avoid liability under the False Claims Act. The impact of allowing this tactic to deter employees from blowing the whistle can hardly be overstated given that Medicare fraud is estimated to cheat taxpayers out of between $60 and $90 billion annually.
Despite the protections potentially offered by this ruling, whistleblowers are advised to seek legal advice before gathering or using confidential information to expose fraudulent medical billings against the government. The law regarding the use of information subject to a non-disclosure or confidentiality agreement can evolve and varies depending on the jurisdiction. Sound legal counsel can help relators avoid illegal evidence gathering practices. Our Mississippi qui tam lawyers also can offer advice on steps that can be taken to prevent the disclosure of confidential information, such as use of a redacted complaint that omits the names of patients. Because our law firm has a long history of representing whistleblowers, we recognize the importance of taking appropriate steps to protect our clients from the potentially adverse consequences of disclosing fraud by their employers.
Our Mississippi False Claims Act Attorneys can guide courageous whistleblowers through the qui tam process. Contact our firm today at 800.707.9577 to schedule your free consultation, so we can discuss your legal rights.