Physicians as whistleblowers: Doctors get rich by exposing fraud

by McAfee & Taft

As the federal and state governments have evolved from Uncle Sam to Doctor Sam, the potential for healthcare waste, fraud and abuse has also increased. One way the government has deterred healthcare fraud is by enacting and bolstering whistleblower laws. Federal whistleblower laws provide legal claims for individuals who discover or suspect violations of law, corporate waste, corruption, or abuse by companies doing business with the government. In the healthcare industry, increasing numbers of whistleblower claims are being made by physicians.

Whistleblower claims are usually brought as qui tam actions arising under state or federal law. The federal False Claims Act is often referred to as the federal government’s primary tool for recovering funds lost as a result of fraud against the government.

Originally enacted in 1863 to combat fraud in the Civil War, the False Claims Act has always contained its qui tam provisions, which allow a private citizen to bring claims as a private attorney general. The Act provides that a party who submits false claims or who submits false statements to get claims paid is liable for treble damages, plus civil penalties ranging from $5,500 to $11,000 per false claim. Whistleblowers are incentivized to bring such claims. If the government is successful in recovering in a qui tam case, the whistleblower is entitled to receive a percentage of the government’s recovery, which can be substantial given the damages and penalties. Successful whistleblowers are also entitled to recover their attorney fees.

In fiscal year 2013, the U.S. Department of Justice recovered more than $3.8 billion under the False Claims Act, nearly $2.9 billion of which resulted from qui tam cases brought by whistleblowers. Of the $3.8 billion recovered, $2.6 billion came from healthcare cases. The DOJ recovered $5.69 billion in fiscal year 2014.

Qui tam lawsuits are different from most other types of lawsuits. First, they are filed under seal so that the government can investigate the claims and decide whether to prosecute the lawsuit. Generally, the whistleblower must be the first to file the claim and must be the original source of the information provided to the government.

Whistleblower claims in the healthcare industry have become commonplace, particularly in matters relating to Medicare or Medicaid compliance. These claims can involve a range of practices, such as billing, coding and claims submissions by hospitals, surgery centers, medical device manufacturers, medical group practices, nursing homes, or others. They can also arise based on prohibited referrals under the Stark law and illegal kickback arrangements involving healthcare providers, physicians or others. Unexpectedly, a number of qui tam plaintiffs have been physicians.

Healthcare industry executives should be cognizant that physicians may become whistleblowers. In addition to promoting an environment of legal compliance and requiring compliance with laws, healthcare industry executives should be thoughtful when making remarks to physicians about healthcare regulatory compliance matters. The message should be one of promoting and assuring compliance, not a message of taking transactions to the edge. There’s a great difference between “we promote legal compliance” and “we want to comply with the spirit of the law.”

Fraudulent or abusive practices in the healthcare industry can be difficult to detect. Often physicians are knowledgeable about wrongful practices as a result of their involvement in meetings, discussions with other physicians and healthcare executives, and access to documents and information. Physicians can provide information about practices, transactions and arrangements that industry self-reporting or government detection may not reveal. They are considered reliable sources of information and are presumed to be credible because of their status as physicians and their medical knowledge to explain technical information. As a result, when physicians come forward as qui tam plaintiffs, prosecutors will listen, even though the claims may involve a drumbeat of innuendoes, repetition of charges that are not adequately supported by accurate facts, or opportunistic maneuvering.

Physician whistleblowers are motivated to bring qui tam actions for various reasons, including:

  • Financial incentives available to qui tam plaintiffs;
  • Disagreements and adversarial relationships with other physicians and healthcare providers;
  • Exclusion from participation in business transactions, joint ventures, and arrangements in which other physicians may profit or benefit;
  • Competitive concerns;
  • Anger or disgruntlement following the termination of employment, revocation of medical staff appointment, or expulsion from joint venture participation;
  • Perceived “self-preservation” or protection as a threat to other physicians or healthcare providers who assert claims or take actions against them;
  • Poor treatment by healthcare executives;
  • Protecting patients and patient safety;
  • Stopping unlawful or fraudulent practices;
  • Exposing wrongdoing.

Some recent examples of physician whistleblower FCA cases:

  • A court recently entered judgments for an amount in excess of $276 million after a physician brought claims under the False Claims Act against an organization that was operating an outpatient surgery center that offered specialist physicians part-time employment contracts in excess of the fair market value for their services so that the physicians would have to provide outpatient procedures at the organization’s hospital and would not perform their endoscopies at a recently opened, competing facility.
  • In January 2014, an operator of numerous hospitals in Kentucky agreed to pay $16.5 million to settle allegations that it submitted false claims to the Medicare and Kentucky Medicaid programs for cardiac procedures that were not medically necessary. In addition to the allegations that physicians, with the knowledge of the hospital, performed numerous invasive but medically unnecessary cardiac procedures, the government further claimed that the hospital entered into sham management agreements as kickbacks that incentivized doctors to refer more patients to the hospitals. The case began with qui tam lawsuits initiated by three cardiologists who will receive $2.46 million of the settlement funds.
  • A nonprofit healthcare organization operating a network of hospitals in the South and Midwest paid $5.4 million to resolve claims that it violated the False Claims Act by providing radiation oncology services to Medicare and TRICARE beneficiaries that were not directly supervised by radiation oncologists or similarly qualified persons. The allegations were made by a radiation oncologist and former employee of a radiation oncology group at one of the organization’s hospitals. The physician received $1,082,500 as his share of the recovery.
  • A provider of chemotherapy infusion treatments agreed to pay $3.7 million to settle allegations that it improperly extended the duration of treatments and provided unnecessary office visits to evaluate patients prior to their receiving infusion services. The case was initially brought by a physician-whistleblower who recovered more than $280,000 for his role as a whistleblower.
  • In 2013, after three physicians alleged in a qui tam case that a pediatric practice with 13 medical offices knowingly upcoded claims submitted to Tennessee’s Medicaid program for infant auditory screening exams, the physician who was the majority shareholder and managing officer of the practice pleaded guilty to a misdemeanor count of healthcare fraud and also entered into a civil settlement. As part of the settlement, the physician was excluded from participation in all federal healthcare programs for 20 years and was required to pay criminal restitution and damages totaling more than $1.6 million.

Now, some organizations even support, encourage and promote medical professionals as qui tam plaintiffs. For example, Medical Whistleblower Advocacy Network is an advocacy organization that provides support to physician whistleblowers who assert claims in the name of protecting patients and preserving human rights. A number of law firms also advertise their services to physicians as potential qui tam plaintiffs against pharmaceutical companies and medical device manufacturers.

Physicians who bring whistleblower claims, once discovered, may be characterized as troublemakers or disruptive to an organization’s operations. They may even be ostracized by colleagues. Recently, however, physician whistleblowers have included prominent medical professionals, including hospital chiefs of staff, respected physicians who repeatedly complain about patient safety problems, academic department chairs, and mainstream physicians with support from other physicians.

New whistleblower protections and claims were included in the Affordable Care Act. Section 1558 of the Affordable Care Act prohibits employers from discharging or discriminating against an employee with respect to compensation, terms, conditions or other privileges of employment because the employee (a) has provided or is about to provide to the employer, the federal government, or the attorney general of a state information relating to any violation of any provision of the Affordable Care Act; (b) testified or is about to testify in a proceeding concerning such violation; (c) assisted or participated, or is about to assist or participate, in such a proceeding; or (d) objected to, or refused to participate in, any activity, policy, practice or assigned task that the employee reasonably believed to be in violation of any provision of the Affordable Care Act.

Healthcare providers should have a whistleblower policy in place. The policy should make it clear that it is the responsibility of employees to report their concerns about possible violations of policies, unethical conduct, or violations of law. It should include a consistent protocol that maintains the attorney-client privilege during the provider’s investigation and incorporates provisions to assure compliance with Section 1558 of the Affordable Care Act. Also, it should provide that individuals submitting a report will not be subjected to retaliation, intimidation, harassment or other adverse action for reporting a possible violation in good faith or cooperating in the investigation of a possible violation.

In addition, hospital executives, medical group managers, physician executives, and other healthcare industry officials should be judicious when making comments to physicians and others about regulatory compliance issues. They should make it clear that organizational policy requires compliance. Statements made during meetings with physician groups that the organization is “pushing the envelope,” “taking the law to the limit,” “taking advantage of gray areas,” “pressing the lawyers to stretch the law,” or “looking for loopholes” should be avoided, considering that a member of the audience could become a qui tam plaintiff.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© McAfee & Taft | Attorney Advertising

Written by:

McAfee & Taft

McAfee & Taft on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide

JD Supra Privacy Policy

Updated: May 25, 2018:

JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.

This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services"). By using our Website and registering for one of our Services, you are agreeing to the terms of this Privacy Policy.

Please note that if you subscribe to one of our Services, you can make choices about how we collect, use and share your information through our Privacy Center under the "My Account" dashboard (available if you are logged into your JD Supra account).

Collection of Information

Registration Information. When you register with JD Supra for our Website and Services, either as an author or as a subscriber, you will be asked to provide identifying information to create your JD Supra account ("Registration Data"), such as your:

  • Email
  • First Name
  • Last Name
  • Company Name
  • Company Industry
  • Title
  • Country

Other Information: We also collect other information you may voluntarily provide. This may include content you provide for publication. We may also receive your communications with others through our Website and Services (such as contacting an author through our Website) or communications directly with us (such as through email, feedback or other forms or social media). If you are a subscribed user, we will also collect your user preferences, such as the types of articles you would like to read.

Information from third parties (such as, from your employer or LinkedIn): We may also receive information about you from third party sources. For example, your employer may provide your information to us, such as in connection with an article submitted by your employer for publication. If you choose to use LinkedIn to subscribe to our Website and Services, we also collect information related to your LinkedIn account and profile.

Your interactions with our Website and Services: As is true of most websites, we gather certain information automatically. This information includes IP addresses, browser type, Internet service provider (ISP), referring/exit pages, operating system, date/time stamp and clickstream data. We use this information to analyze trends, to administer the Website and our Services, to improve the content and performance of our Website and Services, and to track users' movements around the site. We may also link this automatically-collected data to personal information, for example, to inform authors about who has read their articles. Some of this data is collected through information sent by your web browser. We also use cookies and other tracking technologies to collect this information. To learn more about cookies and other tracking technologies that JD Supra may use on our Website and Services please see our "Cookies Guide" page.

How do we use this information?

We use the information and data we collect principally in order to provide our Website and Services. More specifically, we may use your personal information to:

  • Operate our Website and Services and publish content;
  • Distribute content to you in accordance with your preferences as well as to provide other notifications to you (for example, updates about our policies and terms);
  • Measure readership and usage of the Website and Services;
  • Communicate with you regarding your questions and requests;
  • Authenticate users and to provide for the safety and security of our Website and Services;
  • Conduct research and similar activities to improve our Website and Services; and
  • Comply with our legal and regulatory responsibilities and to enforce our rights.

How is your information shared?

  • Content and other public information (such as an author profile) is shared on our Website and Services, including via email digests and social media feeds, and is accessible to the general public.
  • If you choose to use our Website and Services to communicate directly with a company or individual, such communication may be shared accordingly.
  • Readership information is provided to publishing law firms and authors of content to give them insight into their readership and to help them to improve their content.
  • Our Website may offer you the opportunity to share information through our Website, such as through Facebook's "Like" or Twitter's "Tweet" button. We offer this functionality to help generate interest in our Website and content and to permit you to recommend content to your contacts. You should be aware that sharing through such functionality may result in information being collected by the applicable social media network and possibly being made publicly available (for example, through a search engine). Any such information collection would be subject to such third party social media network's privacy policy.
  • Your information may also be shared to parties who support our business, such as professional advisors as well as web-hosting providers, analytics providers and other information technology providers.
  • Any court, governmental authority, law enforcement agency or other third party where we believe disclosure is necessary to comply with a legal or regulatory obligation, or otherwise to protect our rights, the rights of any third party or individuals' personal safety, or to detect, prevent, or otherwise address fraud, security or safety issues.
  • To our affiliated entities and in connection with the sale, assignment or other transfer of our company or our business.

How We Protect Your Information

JD Supra takes reasonable and appropriate precautions to insure that user information is protected from loss, misuse and unauthorized access, disclosure, alteration and destruction. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. You should keep in mind that no Internet transmission is ever 100% secure or error-free. Where you use log-in credentials (usernames, passwords) on our Website, please remember that it is your responsibility to safeguard them. If you believe that your log-in credentials have been compromised, please contact us at

Children's Information

Our Website and Services are not directed at children under the age of 16 and we do not knowingly collect personal information from children under the age of 16 through our Website and/or Services. If you have reason to believe that a child under the age of 16 has provided personal information to us, please contact us, and we will endeavor to delete that information from our databases.

Links to Other Websites

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at:

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit
  • New Relic - For more information on New Relic cookies, please visit
  • Google Analytics - For more information on Google Analytics cookies, visit To opt-out of being tracked by Google Analytics across all websites visit This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at:

- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.