Healthcare Fraud Update and Retaliation Protection In California

Not surprisingly, the headline-grabbing multi-million dollar settlements have certainly paved the way for health care practitioners, contractors, and employees to report unlawful activities, excessive medical care, improper submissions of claims for reimbursement, and even the withholding of funds after acknowledgment of government overpayment. As we’ve witnessed in recent years, clarified parameters of what is considered fraud and improved whistleblower protections continue to embolden relators to bring forth their claims.

In California, the state Department of Justice’s Office of the Attorney General has an FCA Unit that enforces the FCA and prosecutes FCA violations. Notably, the individual who brings the FCA qui tam action must do so with enough specifics rather than make generalized accusations. To show that an organization committed FCA violations, a relator must prove each of the following three elements by a preponderance of the evidence (in other words, one side has to be just greater than the other to win the case). First, the relator must prove that the defendant made a claim or a statement to get the government to pay money on a claim. Second, the claim or statement was false or fraudulent. Finally, the defendant knew that the claim or statement was false or fraudulent. “False” has to be more than just “not true.” The defendant must have intentionally tried to cheat, or lie to, the government. In a landmark case, a court used the test of whether a claim was underpinned by fraud rather than merely being false. (City of Pomona v. Superior Court, 89 Cal.App.4th 793, 802 (2001). Therefore, the relator must provide enough evidence where a reasonable jury can find that the claim, or statement to get the government to pay, was objectively false and fundamentally fraudulent. Finally, as of this writing, the California FCA has an additional administrative hurdle requiring government employees to exhaust internal reporting procedures before filing a qui tam action (although, this burden is no longer required in claims involving MediCal).

In addition, California whistleblowers may not be fired in retaliation for complaining or reporting violations or illegalities that they reasonably believe to be unlawful or fraudulent. See the following blogs about examples of retaliation. Complaints about, or the reporting of, illegal or dishonest conduct to law enforcement agencies is protected under California’s statutes such as the Whistleblower Protection Act, and the common law doctrine of wrongful termination in violation of public policy. To support the California FCA, California has several laws that protect whistleblowers that go further than their federal counterparts. In fact, Labor Code Section 1102.5 prohibits retaliation against employees who “blow the whistle” by notifying a government agency on, or refuse to participate in, activity that would violate any laws or regulations in the workplace. This law was greatly expanded in the past year by extending protection to employees who report suspected behavior not only externally to public entities but specifically internally to a person with authority over the employee or to another employee with the authority to investigate, discover or correct the reported activity. There are also specific laws that prohibit retaliation against employees who report to a government entity any fraudulent billing improperly submitted to the government for reimbursement.

Most importantly within the health care industry, California law prohibits retaliation against patients, physicians, nurses and medical staff who inform the government or its agencies on patient care issues at a healthcare facility. In addition, California’s Whistleblower Protection Act specifically protects state employees against retribution from reporting waste, fraud, abuse of authority, or violation of law.

If you witnessed any potentially fraudulent activity at your facility where there is underpayment to the government, non-refunded payments to the government upon overpayment, or retaliation (against anyone) for blowing the whistle on corrupt government activity, prompt action is vital. Contact the experienced employment law attorneys at Stephen Danz & Associates for a free consultation to discuss your circumstances and legal options.