Whistleblower Provisions In The Patient Protection And Affordable Care Act

Continuing its recent trend of inserting whistleblower protections in significant legislation that impacts public health and safety, Congress included whistleblower and retaliation protections in the recently enacted comprehensive health care legislation signed by President Obama. While the whistleblower provisions may encourage employees to report fraud or waste, they may also impose added burdens on employers, health insurers and other entities involved in the health care field.

The Fair Labor Standards Act ( FLSA ) is amended by adding Section 18C, which provides that an employer cannot discriminate against any employee with respect to his or her compensation, terms, conditions, or other privileges of employment because the employee, among other things, (1) provided, caused to be provided, or is about to provide or cause to be provided to the employer, the Federal Government, or the attorney general of a State information relating to the violation of, or any act or omission the employee reasonably believes to be a violation of, any provision of this title, (2) actually did or is about to assist, participate, or testify in a proceeding about such violation, or (3) objected to or refused to participate in any activity or task that the employee reasonably believed to be in violation of the statute or any rule or regulation promulgated under the statute.

Any employee who believes he or she has been discharged or discriminated against in violation of the FLSA is entitled to seek relief using the procedures provided in the extensive whistleblower protections of the Consumer Product Safety Improvement Act of 2008. These procedures include filing a complaint with the Department of Labor, going through an administrative process to determine whether the employee s conduct protected by Section 18C was a contributing factor in the unfavorable personnel action , and providing for the filing of a civil action in federal court after exhaustion of administrative process.

The FLSA amendment applies only to violations of Title I of the Health Care Act. Title I covers the statute s core provisions for medical care in conventional settings, like the provision of health care services at hospitals, clinics and physician offices. Employees who report fraud, waste or violations in those settings fall under the protections afforded by the FLSA amendment. Practically speaking, this will mean that only these employers are likely to see these cases.

Individuals who report violations of Titles II through X of the Health Care Act fall outside the whistleblower protections. These titles involve administration of Medicare and Children s Health Insurance Program (CHIP) expansion; Medicaid, Medicare and CHIP program integrity; nursing home care for the elderly; innovative treatment and therapies; payments and reimbursements (though not through the state Exchanges set up under the statute); prescription drugs and preventative care; housecall visits; expansion of and increasing in training for the health care workforce; and grants for the expansion of health care to underserved populations.

Section 1313 of the Health Care Act makes any [p]ayments made by, through or in connection with an Exchange subject to the False Claims Act if the payments involve any Federal funds. The False Claims Act prohibits the knowing presentation of a false or fraudulent claim for approval or payment. Any knowing presentation of a bill or invoice for health care services through an Exchange set up under the law that contains overcharges is subject to a civil penalty. The penalties include a fine of up to $10,000, a civil penalty of between 3 to 6 times the amount of the overcharge, and repayment of the cost to the Federal government of bringing the civil action to prove the violation. This law contains the threat of a civil penalty up to 6 times the amount of damages sustained by the Federal government as a result of a violation, twice as high as the maximum available under the False Claims Act.