The U.S. Department of Health and Human Services (“HHS”) warned when it announced additional allocations of Coronavirus Aid, Relief, and Economic Security (CARES) Act funding on April 22, 2020, that “there will be significant anti-fraud and auditing work done by HHS, including the work of the Office of the Inspector General.”
The False Claims Act allows whistleblowers to pursue cases even if the Justice Department decides not to intervene. Violators can be ordered to pay triple the amount in damages. If the government intervenes, the whistleblower is entitled to 15% to 25% of the amount recovered. If the government declines to intervene in the action, the whistleblower’s share increases to 25% to 30%.
That could be an incentive for people who feel something improper was done with the money.
The Department of Justice is already cracking down on small businesses that fraudulently obtained and misused federal loans provided by the CARES Act. Health care providers may be next in line to be scrutinized.
In addition to criminal charges, providers will likely see a wave of civil lawsuits accusing them of either taking a bailout they didn’t need or frivolously spending the money they received.
On June 15, 2020, lawmakers in the United States Senate introduced the Coronavirus Oversight and Recovery Ethics Act of 2020 (CORE Act). This legislation contains provisions that would protect whistleblowers who are retaliated against for raising concerns related to the misuse of federal funds in COVID-19 relief programs and reports of danger to public health or safety.
The proposed law would protect any employee, former employee or person seeking employment who raises reasonable concerns of misconduct with respect to funds provided under federal coronavirus relief acts, such as the CARES Act and other similar legislation. Such concerns include: gross mismanagement and waste of covered funds, abuse of authority related to the distribution, implementation, or use of covered funds, and violations of any statute, rule, or regulation related to covered funds. In addition, the proposed law would also protect employees who raise a “substantial and specific danger to public health and safety” in relation to federally-funded COVID-19 relief programs.
Health care employers need to commit to best practices on handling whistleblower concerns. This includes training workers and managers on whistleblower rights and anti-retaliation, auditing existing reporting channels to ensure effectiveness, revising investigation protocols to demonstrate leadership commitment and accountability, and rolling out new policies to encourage “speaking up.” Be very attentive to compliance documentation with any funds received related to the pandemic, and listen to employees who express compliance concerns.