Medicare and Medicaid are the deep pockets of the federal budget, paying out nearly $1 trillion in 2018. So, it’s no wonder the programs are targets for fraudsters. Some steal from the sick. Some steal money meant to soothe the dying.

So, a new Department of Health and Human Services report on poor quality hospice care is a reminder: Whistleblowers, who have helped expose hospice billing fraud under the False Claims Act, may also have a role in ensuring quality care. It is essential to protect the False Claims Act to target cases of Medicaid or Medicare fraud.

Increasingly, billing for substandard care is considered a form of fraud, attorney Nina Zhang wrote on the American Bar Association website in March.

The False Claims Act (FCA) has emerged, for better or for worse, as a quality enforcement tool. With quality of care as an ever-moving target by the federal government (with the constant development of new quality measures), the FCA has faced its share of criticism as too blunt of an instrument to regulate quality of healthcare, a matter that many argue is better left to the states under their police power…However, it can be argued that since the federal government is the biggest buyer of healthcare, it thus has a stake in how its monies are used.”

Whistleblower hospice cases generally involve care that was not needed or never delivered. In June, a Los Angeles doctor was charged in a $33 million fraud scheme that involved hospice care. Last year, a nurse blew the whistle on a for-profit hospital chain. Caris Healthcare agreed to repay $8 million for submitting hospice bills for patients who were ineligible for the because they were not terminally ill.  Sometimes billing and quality of care are intertwined. In a 2018 Texas case, a doctor told an informant that the way you make money on hospice patients “is by keeping them alive as long as possible.”

Continue Reading Whistleblowers expose hospice fraud. Can they do the same for quality-of-care?

CNN has caught up with Steve Spangle, a U.S. Fish and Wildlife Service whistleblower. In June, Spangle talked to  High Country News about what he described as “shenanigans” around a proposed housing development in Arizona.

Put on hold because of environmental concerns in 2017, the project was back on track after what CNN describes as “a secret meeting” between the developer and Interior Secretary David Bernhardt.

The High Country News interview notes that the USFWS twice warned the project would have “appreciable” effects on wildlife, including rare species such as the jaguar and yellow-bellied cuckoo. Spangle says he changed the project’s requirements under pressure from superiors at the Department of the Interior, an assertion the department has denied.

Spangle, now retired, decided he need to explain his 2017 decision lifting objections to the construction of a 13,000-acre “Villages at Vigneto” housing and golf course development on the San Pedro River southern Arizona.

“I felt the public should know that some shenanigans had taken place. It didn’t seem like the right way to do business,” he told High Country News. In this case, he said he changed the project’s requirements under pressure from superiors at the Department of the Interior, an assertion the department has denied.

He had more to say to CNN this week. Continue Reading CNN follows up on wildlife whistleblower’s report on “shenanigans” in Arizona development deal

The financial whistleblower program at the Commodity Futures Trading Commission (CFTC) has been busy, most lately announcing a $2 million award to “two model whistleblowers who provided the agency with significant information that prompted the CFTC to open an investigation….The multiple interviews and numerous documents the whistleblowers provided were highly informative and formed the basis of the CFTC’s investigation.”

its largest whistleblower awardIn June, the agency announced  a $2.5 million award, which followed a $1.5 million reward announced in May. The agency reports awarding more than $87 million to whistleblowers between 2014 and 2018.

The agency is committed to the program, according to a quote from director James McDonald in a press release announcing the May award.

Today’s award stands as one in a growing line of whistleblower awards that show the Commission’s continued commitment to the program. Whistleblowers have become an integral part of our enforcement efforts, and I expect that trend to continue going forward. Continue Reading Commodities crime keeps the CFTC financial whistleblower program busy

A guest post from Dean Zerbe, senior policy analyst for the National Whistleblower Center and former tax counsel for the Senate Finance Committee.

Tax whistleblowers had good news the other day with the Taxpayer First Act of 2019 (Public Law 116-25) being signed into law – including anti-retaliation protections for tax whistleblowers as well as requiring improved communication between the IRS and whistleblowers.  Thanks to the Chairman of the Senate Finance Committee Charles Grassley (R-IA)(my old boss) and Ranking Member Wyden (D-OR) as well as Ways and Means Subcommittee Chairman Lewis (D-GA) and Ranking Member (R-PA) for making this all happen.  Happy day!

Anti-Retaliation Protections For Tax Whistleblowers
Dean Zerbe

Prior to the change in law, there were no federal anti-relation protections for tax whistleblowers (although the IRS is quite good at protecting the identity of whistleblowers – and there is no requirement that the whistleblowers name be publicly revealed).  Now, thanks to the new law (26 USC 7623(d), tax whistleblowers will benefit from significant protections – modeled after the protections whistleblowers have under the False Claims Act.

The anti-retaliation proposals protect tax whistleblowers who blow the whistle to the IRS and also whistleblowers who provide information about underpayment of tax or other violations of the tax laws to their supervisor or other responsible persons in the company who can investigate/take action on the matter.  KEY – the whistleblower must file a complaint with the Secretary of Labor within 180 days after the date of which the violation occurs (if the Secretary doesn’t issue a decision within 180 days – an action may be brought in the appropriate district court.

The new law provides significant remedies to tax whistleblowers who have been subject to retaliation – including compensatory damages of reinstatement, 200 percent of back pay and all lost benefits, with interest and compensation for other special damages including litigation costs and reasonable attorney fees.  Credit to NWC”s Steve Kohn at NWC for his good oar-pulling on this provision.

Improved Communication With Tax Whistleblowers

A grind for tax whistleblowers has been the reality that tax cases can take often years to resolve – and at the same time the whistleblower often receives little to no communication from the IRS about the status of her claim.  With the new law, 26 USC 6103(k)(13), Congress has directed the IRS to open the door and let in (some) light to the whistleblower about the status of the claim.

Particularly, the IRS is to inform the whistleblower whether the information the whistleblower has been referred to audit and whether there has been a payment by the taxpayer on the issue raised by the whistleblower.  In general, the IRS is to provide the whistleblower a status of the investigation and related information in response to written request from the whistleblower.   The new law also allows for improved communication with the whistleblower to assist the IRS in an investigation (something that IRS Criminal Investigation is quite good at – civil is still getting there).   This window into the status of a whistleblower claim will be of good help for giving whistleblowers peace of mind.

 IRS Welcome Mat Out For Knowledgeable Tax Whistleblowers With Specific Information

All this good news for tax whistleblowers comes on the heels of the IRS providing a record $312 million dollars in awards last year to whistleblowers.  The IRS is certainly interested in hearing from knowledgeable whistleblowers (particularly insiders) about big dollar tax underpayments that are recent (last 3 – 6 years).  In a recent interview I had with Lee Martin – the Director of the IRS whistleblower office – he emphasized to me that it is critical that whistleblowers come in with specific information about tax evasion (names of taxpayers involved; documents are a big help; details on the underpayment of tax, etc.).  I find in my own work representing tax whistleblowers such as Brad Birkenfeld and others that that is exactly right – whistleblowers who get awards are the ones that have the goods.

All in all – with the new law — a good day for tax whistleblowers and honest taxpayers.  A bad day for big-time tax cheats.

What’s Next?

These important reforms were part of a package that had been in the works for well over a year so it was impossible to add additional changes – but the NWC is hard at work pushing for Congress to clarify that the standard of review for tax whistleblower cases in Tax Court is – de novo – not abuse of discretion (arbitrary and capricious).  It all sounds like boring legalese – but an important reform that will ensure whistleblowers rights are protected and not subject to the whims of the IRS.  Also, the NWC is looking to have interest run if a whistleblower doesn’t receive a payment within 12 months of dollars being collected by the IRS.   Too often whistleblowers can wait and wait and wait for the IRS to issue an award – having interest running will put some focus on the IRS making awards in a timely manner.

 

“An employee of the Department of Housing and Urban Development may not ask his secretary to type his personal correspondence during duty hours.”

That is one example in the federal code of regulations of a personal task executive branch employees are not allowed to assign to government staff.

CNN reports that an unnamed congressional committee has been told by whistleblowers that Secretary of State Mike Pompeo used members of his security patrol to pick up his dogs, his son and his Chinese food.

Democrats on a key House congressional committee are investigating allegations from a whistleblower within the State Department about Secretary of State Mike Pompeo and his family’s use of taxpayer-funded Diplomatic Security — prompting agents to lament they are at times viewed as “UberEats with guns”.

Congressional investigators, who asked for the committee not to be named as they carry out their inquiries, tell CNN that a State Department whistleblower has raised multiple issues over a period of months, about special agents being asked to carry out some questionable tasks for the Pompeo family.

“These are not the kind of people who go around complaining,” retired Rear Admiral John Kirby told CNN.

Continue Reading CNN reports Secretary of State’s security officers became “UberEats with guns” before they became whistleblowers.

The Department of Justice announced last week that Encompass Health Corporation, formerly known as HealthSouth Corporation, has agreed to pay $48 million to resolve allegations that it was enrolling patients in its program and charging Medicare whether they would benefit from rehab or not. The DOJ called the company nation’s largest operator of inpatient rehabilitation facilities.

The qui tam cases were brought by a former company physician in Florida, the head of therapy at a Texas facility and the medical director at a Virginia hospital.

From the DOJ press release:

The government alleged that beginning in 2007, in order to ensure compliance with Medicare’s rules regarding classification as an (inpatient rehabilitation facility) IRF, and to increase Medicare reimbursement, some Encompass IRFs falsely diagnosed patients with what they referred to as “disuse myopathy” when there was no clinical evidence for this diagnosis. Additionally, Encompass IRFs allegedly admitted patients who were not eligible for admission to an IRF because they were too sick or disabled to participate in or benefit from intensive inpatient therapy.

Continue Reading Qui tam cases against once-notorious rehab hospital chain result in $48 million settlement, lots of spin.

 

Do not underestimate Army Corp of Engineers whistleblower Bunny Greenhouse. A stern, elegant woman who favors sprawling floral lapel pins, she could be mistaken for the schoolteacher she once was. And, don’t think that time and retirement have tempered Greenhouse. The woman who objected to no-bid contracts for Iraq War contractors still has something to say.

Tonight, Friday June 28, the CBS show “Whistleblowers” includes a segment on her story as part of the last episode of the season. The program also includes an interview with Michael D. Kohn, a board member of the National Whistleblower Center and one of Greenhouse’s lawyers.

Bunny Greenhouse

“I never considered myself as a whistleblower,” she tells host Alex Ferrer. “I was doing the work I had taken the oath of office to do. But I still became the skunk in the park.”

Bunnatine Greenhouse was in charge of procurement for the Army Corps of Engineers and she took her job seriously. In 2003, she objected to a secret, no-bid contract guaranteeing Halliburton subsidiary, Kellogg Brown & Root, billions of dollars for services related to the invasion of Iraq. Unsatisfied with the response to questions she raised, she took her concerns to Congress in 2005.  Thus began a long battle between Greenhouse and the Corps. She was demoted, her glowing job evaluations turned sour and she was sidelined.

Still, she tells Ferrer: “I learned to not let fear paralyze me.” Continue Reading Tonight, 6/28: “Whistleblower” on CBS features military procurement whistleblower Bunny Greenhouse

Social media executives testified on Wednesday that they are determined to keep terrorist content off their sites, but the members of Congress who summoned them had doubts.

The House Committee on Homeland Security heard testimony from representatives of Facebook, Twitter, and Google.

“On terrorist content our view is simple: There is no space on Facebook for terrorists,” Monika Bickert of Facebook told the committee.

However, committee chair Bennie Thompson said social media platforms have proven “they were unable to comply” with demands to control content.

Continue Reading Social media execs want terrorist content off their sites. Lawmakers see little progress

Whistleblowers from Department of Veteran’s Affairs hospitals offered dramatic testimony Tuesday about how they had been punished after raising quality-of-care issues. They also say the VA’s Office of Accountability and Whistleblower Protection offers little protection from retribution.

The oversight subcommittee of the House Veterans Affairs committee heard from both whistleblowers and advocates on what was described as a “culture problem” within the VA.

Minu Aghevli, who runs the opioid treatment program for the VA’s Maryland Health Care System, raised concerns about the handling of waiting list statistics about five years ago. Since then, Aghevli told the committee, she has been the subject of “constant harassment, scrutinizing and frivolous investigations.”

The retaliation and threats have continued, said Aghevli, who noted that she learned the day before the hearing that she was being “terminated” from her job.

 

Katherine Mitchell, MD, won a “public servant of the year” award from the VA after she disclosed understaffing and inadequate triage training at the Phoenix VA medical center’s emergency room. That did not protect her from retaliation, which she said has been  “extreme and ongoing.”

Still, Mitchell said she had no choice: There is “no other way to stop patients dying…Until leadership improves, employees will act as a safety-net.”

Continue Reading Whom is the VA’s Office of Accountability and Whistleblower Protection protecting? Whistleblowers say it works against them

VA whistleblowers will be the subject of Tuesday hearing scheduled by the House Veterans Affairs Committee’s Subcommittee on Oversight and Investigations.

VA Whistleblowers
VA accountability

Among those testifying: three health care whistleblowers profiled this weekend in USA Today They say VA officials has been trying to silence them since they reported patient care problems.

They work at different sites – in the Phoenix area, Baltimore, and Iowa City, Iowa – yet the VA response has been similar. All were stripped of assigned patient-care and oversight duties, and they suspect VA managers are retaliating against them for speaking out, and sidelining them to prevent them from discovering or disclosing any more problems with veteran health care.

Last summer, NPR talked to more than 30 current and former employees to investigate similar complaints about a VA hospital in Alabama.

All describe an entrenched management culture that uses fear and intimidation to prevent potential whistleblowers from talking. 

“If you say anything about patient care and the problems, you’re quickly labeled a troublemaker and attacked by a clique that just promotes itself. Your life becomes hell,” one longtime employee at the Central Alabama Veterans Health Care System, or CAVHCS, told NPR. Like many we interviewed there, she requested anonymity out of fear for her job.

Whistleblowers at the VA had hoped for more protection when, in 2017, the Trump Administrations created the Office of Accountability and Whistleblower Protection. However, critics have said the program works against whistleblowers rather than working to protect them.  In May, general counsel and acting head of the VA James Byrne praised the law at his confirmation hearing.

The situation for whistleblowers at the VA was also the subject of a 2018 Government Accountability Office report that found whistleblowers were ten times more likely than their peers to receive disciplinary action within a year of reporting misconduct. The report also found that VA managers investigated themselves for misconduct.

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