Law360, New York (December 1, 2014, 7:18 PM ET) — False Claims Act expert Reuben Guttman helped negotiate a $98.15 million settlement this year with Community Health Systems Inc. in a whistleblower suit accusing the hospital chain of health care fraud, landing Guttman on Law360’s list of Health Care MVPs. Read the full article here. (Registration is required.)
This article, written by Reuben Guttman and Traci Buschner who practice law with Guttman, Buschner & Brooks PLLC in Washington DC. Published in the McClatchy-Tribune News Service on August 13, 2014.
What kind of people would knowingly expose someone to the risk of infection just to make a buck?
Read carefully the allegations underlying the recent $97 million settlement between the U.S. Department of Justice and Community Health Systems and that question may be answered.
Responding to lawsuits brought under the False Claims Act by multiple whistleblowers, the government investigated and came to terms with the Nashville-based hospital giant resolving allegations that patients were admitted from emergency rooms to overnight stays not for medical necessity but for the purpose of racking up Medicare and Medicaid revenue and bilking private payers.
No harm, no foul. Right? Just skimming a few dollars off the government with no potential harm to patients? Right? Wrong on both counts!
While hospitals are places to get well, staying in a hospital is – these days – a place to acquire a hospital infection. According to allegations brought by three of the whistleblowers, including a physician at a CHS-owned Philadelphia hospital, overnight admission to a hospital absent medical necessity is not prudent medical practice. And, the rationale behind that conclusion is not just about saving dollars. It is a question of health and safety.
So, according to the allegations spanning multiple whistleblower law suits – as the publicly traded CHS was gobbling up community hospitals across the country, it was supporting its buying fling by admitting patients who allegedly did not need hospitalization.
And so the story goes; once again whistleblower lawsuits brought under the False Claims Act – a law allowing private citizens with knowledge of wrongdoing to bring suit in behalf of the government – was being used to recover taxpayer dollars and expose conduct placing citizens at risk. Technically these suits are about the submission of false claims for government payment or approval. In reality they are about much more.
In recent years, whistleblower litigation under the False Claims Act has uncovered conduct by giant pharmaceutical manufacturers including Abbott, GlaxoSmithKline, Amgen and Pfizer that has resulted in criminal convictions and billions of dollars in recovery for hard-pressed government payers. In each case the Government paid hundreds of millions of dollars in reimbursement for prescriptions that were the resulted of marketing tactics that violated the law. Patients were given medicine for reasons not solely grounded in medical necessity or rationale.
To be clear where companies including Abbott and Glaxo pleaded guilty to marketing schemes that placed patients at risk, they did so knowingly and in each case told the court they were pleading guilty because they were indeed guilty.
The tragedy is that the CHS settlement – a civil settlement – is yet another reminder that people captured by a corporate culture have willingly placed countless unwitting citizens at health risk all for the purpose of making additional profit. That is indeed the tragedy. The travesty is that even after the health care providers we once trusted have plead guilty to conduct that places people at risk, the U.S. Chamber of Commerce – or at least a few lawyers speaking on its behalf – still claim that these purportedly outstanding companies need to be cut some slack. Testifying before the U.S. House of Representatives’ Judiciary Committee Subcommittee on the Constitution and Civil Justice on July 30, lawyers for the Chamber attacked the False Claims Act, arguing that corporations should police themselves with whistleblowers being required to first report their concerns to corporate internal compliance personnel before alerting government officials.
Of course, these mouthpieces for the Chamber neglected to mention that every pharmacy giant that has pleaded guilty over the last five years had internal compliance programs that did not work so well. Actually, come to think of it, CHS also had an internal compliance program.
So what kind of people would knowingly expose someone to the risk of infection just to make a buck? One quick answer is definitely not the kind of people we want policing themselves for good behavior.
With the growth of multinationals whose business transcends geographic boundaries and whose revenue streams exceed the gross national product of some nations, legislators and regulators—at least in the United States—have looked to leverage the resources of whistleblowers to bolster compliance enforcement. Under the right circumstances whistleblowers can be an invaluable resource.
First, whistleblowers can surface information not readily available, or otherwise concealed from regulators. Second, in places like India and China they add eyes and ears with cultural and language sensitivity and skills that the enforcement agency itself may not have available, at least in these particular locales. Third, they can have technical or scientific skills in areas that will assist the enforcement agency. Fourth, they often come equipped with counsel who can spend the time translating lay complaints into cogent legal arguments.
Read the entire article at Harvard University, Edmond J. Safra Center for Ethics.
Watch this video of Reuben Guttman discussing Compulsory Arbitration at Emory Law School.
Over the past two years, many countries throughout the world have passed new or strengthened existing laws to protect whistleblowers from retaliation, and to help ensure that their efforts to disclosure corruption, fraud and other crimes result in needed reforms.
From Luxembourg to Vietnam, from South Korea to the US, and from Peru to Jamaica, countries in all regions of the world are granting new and expanded legal protections to people who expose a wide range of crimes. In many more countries – Australia, Canada, Colombia, Guatemala, India, Ireland, Lebanon, Nigeria, Pakistan and Taiwan, to name just a few – new or improved whistleblower protection laws are actively under consideration or being proposed.
The latest major breakthrough came in November, when US President Barack Obama signed into law the Whistleblower Protection Enhancement Act, which will provide new legal shields for federal employees – including protection for government scientists who challenge censorship, and for employees who challenge the consequences of the government’s policy decisions.
Thirteen years in the making, this victory was pushed over the top thanks to an extraordinary grassroots campaign by the Government Accountability Project, the Project on Government Oversight and the public radio programme “On the Media”.
And, last month, the European Commission – acknowledging input from TI and our friends at Public Concern at Work – passed new whistleblower guidelines for EU staff members, including a critical provision that requires managers to prove that any actions taken against employees were not motivated by whistleblowing.
Why are whistleblower protection laws important? Without them, citizens can be fired, suspended, harassed or otherwise retaliated against for exposing wrongdoing. In extreme cases, they and their family members are threatened, beaten or even killed – as in the case of an Indian whistleblower named Lingaraju, who was hacked to death in front of his wife while they were fetching water near their home on November 20.
Why are whistleblowers important? Worldwide, they have saved millions of lives, helped to recover billions of dollars in stolen and lost funds, saved precious environmental resources, and exposed all manner of cases of corruption, tax evasion, financial crimes and human rights violations gone undetected or ignored by official authorities.
According to a 2012 survey by Ernst & Young, 40 percent of respondents worldwide identified whistleblowing as a highly effective tool for detecting wrongdoing. According to KPMG India, nearly 30 percent of all fraud detected in the country has surfaced due to the anonymous whistleblower.
The oldest whistleblower law in the world – the US False Claims Act – has been credited with securing tens of billions of dollars in fines and stolen funds. An all-time record $4.9 billion in settlements and judgments was secured by the US Justice Department in 2012 under a whistleblower law that allows citizens to expose corruption and bring it to the attention of federal investigators. The figure topped the previous record by more than $1.7 billion, and brings total recoveries under the False Claims Act since 2009 to $13.3 billion – the largest four-year total in history, and more than a third of total recoveries since the law was amended in 1986.
The international whistleblower movement is now at the point of no return. Activists around the world are demanding legal rights and protections for whistleblowers – and they’re winning in record numbers. As these protections expand, whistleblowers will have greater assurances that if they come forward and report wrongdoing, they will not suffer the consequence of committing the truth.