Whistleblower Protection

By Rocket55DevAdmin |

Whistle On American FlagThis past September the Securities and Exchange Commission announced charges against 15 broker-dealers and one affiliated investment adviser for widespread  and long-term failures by the firms and their employees to maintain and preserve electronic communications.  The firms and their employees used a messaging application on their cell phones called WhatsApp.  WhatsApp has become a popular messaging application among brokers and dealers because it allows users to send messages that disappear.  When the user enables “disappearing messages,” messages can be set to disappear automatically in 24 hours, 7 days, or 90 days.

The problem is this—disappearing messages violate FINRA rules 4511 and 2010 (governing standards of commercial honor and principles of trade). FINRA Rule 4511 requires that FINRA members make and preserve books and records for a period of at least six years, and do so in a form and media that comply with Securities Exchange Act (SEA) Rule 17a-4. The rules apply to all electronic communications such as email, instant messages, collaboration tools, text messages, social media, and messaging platforms like WhatsApp messenger.  Further, FINRA clarified in Regulatory Notice 17-18 that financial firms must retain records of communications related to its business that are made through text messaging apps and chat services such as “WhatsApp.” The notice states “…every firm that intends to communicate or permit its associated persons to communicate, with regard to its business through a text messaging app or chat service, must first ensure that it can retain records of those communications as required by SEA Rules 17a-3 and 17a-4 and FINRA Rule 4511. SEC and FINRA rules require that, for record retention purposes, the content of the communication determines what must be retained.”

With increasing numbers of financial sector employees using WhatsApp in non-compliant ways, regulators such the SEC, CFTC and Financial Industry Regulatory Authority (FINRA) have been imposing stringent fines on violators.

The firms recently charged by the SEC admitted the facts in their respective SEC orders, acknowledged that their conduct violated recordkeeping provisions of the federal securities laws, agreed to pay combined penalties of more than $1.1 billion, and have begun implementing improvements to their compliance policies and procedures to settle these matters.

  • The following eight firms (and five affiliates) have agreed to pay penalties of $125 million each:
    • Barclays Capital Inc.
    • BofA Securities Inc. together with Merrill Lynch, Pierce, Fenner & Smith Inc.
    • Citigroup Global Markets Inc.
    • Credit Suisse Securities (USA) LLC
    • Deutsche Bank Securities Inc. together with DWS Distributors Inc. and DWS Investment Management Americas, Inc.
    • Goldman Sachs & Co. LLC
    • Morgan Stanley & Co. LLC together with Morgan Stanley Smith Barney LLC
    • UBS Securities LLC together with UBS Financial Services Inc.
  • The following two firms have agreed to pay penalties of $50 million each:
    • Jefferies LLC
    • Nomura Securities International, Inc.
    • Cantor Fitzgerald & Co. has agreed to pay a $10 million penalty.

According to a SEC press release: “Finance, ultimately, depends on trust. By failing to honor their recordkeeping and books-and-records obligations, the market participants we have charged today have failed to maintain that trust,” said SEC Chair Gary Gensler. “Since the 1930s, such recordkeeping has been vital to preserve market integrity. As technology changes, it’s even more important that registrants appropriately conduct their communications about business matters within only official channels, and they must maintain and preserve those communications. As part of our examinations and enforcement work, we will continue to ensure compliance with these laws.”

In addition to the significant financial penalties, each of the firms was ordered to cease and desist from future violations of the relevant recordkeeping provisions and was censured.

If you or someone you know works in the securities, commodities and financial industries and uses ephemeral communications and messaging apps like WhatsApp, Snapchat, Signal and Telegram to conduct business transactions, you may have rights under the SEC Whistleblower Program to qualify for a reward if you present information to the SEC that results in a recovery of a fine or penalty against your employer.

Halunen Law can help you file a whistleblower complaint with the agency.  Our attorneys have years of experience representing whistleblowers from most every industry.  We can provide guidance to you—including making internal reports to your employer—in order to protect your legal interests and provide protection from retaliation. Contact our office today.

By Rocket55DevAdmin |

Whistleblowers who call out bribery of foreign officials can reap significant rewards

Never underestimate human creativity when unchecked greed is involved. People who feel unbound by such trifles as ethics, morals, fair play – or the law – will find a way to get what they want. They’ll bend and break the rules in new and creative ways, illegally game the system through novel schemes and take advantage of the complexities of business and the law to wrongfully obtain the money, favors, benefits, information or things of value they covet. Sometimes, however, such corruption involves a more straightforward act: bribery. And bribery is one of many wrongful acts that can form the basis of a whistleblower action.

An Ancient Tradition and a Modern Scourge

Bribery is one of the oldest forms of corruption. In fact, it’s literally the textbook definition of corruption, as the Oxford Dictionary defines it as “dishonest or fraudulent conduct by those in power, typically involving bribery.” Acts of bribery can be found in the historical records of ancient Egypt, Greece and China, among other civilizations. Today, bribery is a persistent pox on the global economy, but on a scope and scale that corrupt officials of the ancient world couldn’t conceive.

The World Bank estimates international bribery exceeds $1.5 trillion annually, or 2% of global gross domestic product. High-ranking officials around the world, including presidents and prime ministers, are regularly embroiled in headline-making bribery scandals. And here in the U.S., bribery cases involving public and elected officials, from zoning board and city council members to law enforcement agents to members of Congress, result in hundreds of prosecutions and convictions each year. Between 2017 and 2021, 987 people were convicted of federal bribery charges, according to the U.S.
Sentencing Commission.

Laws Reward and Protect Whistleblowers Who Expose Bribery and Corruption

Most bribery schemes are simple; the complexities usually involve a cover-up. A person or organization wants something from a public official that may not be obtainable by legal means – a permit, a change in the law, a favorable decision, or, as is often the case, a lucrative government contract. To get the desired outcome, the bribing party will give the official an off-the-books reward – a suitcase full of cash or laundered money, luxury cars or vacations, a promise of a “consulting” job or anything else the official desires.

Several federal and state criminal laws prohibit bribery. The primary federal bribery statute involving U.S. officials prohibits giving or accepting anything of value to or by a public official if the thing is given “with intent to influence” an official act, or if the official receives it “in return for being influenced.”

As with commerce, however, bribery doesn’t have borders in this age of globalization. For U.S. citizens and companies that do business in other countries, where public corruption is widespread, offering bribes can be the cheapest and fastest way to get the government accommodations they want for their business objectives. Federal law bans such bribes as well. The Foreign Corrupt Practices Act (FCPA) generally prohibits the payment of bribes to foreign officials to assist in obtaining or retaining business. 

The U.S. Securities and Exchange Commission (SEC) and the Department of Justice enforce the FCPA’s anti-bribery provisions. The SEC may bring civil enforcement actions against companies and individuals that violate those provisions. Those that are found in violation of the act are subject to substantial fines as well as the forfeiture of any benefits they received because of the violation. 

As noted, many acts of bribery go undetected because both parties will make great efforts to conceal their conduct. That’s one reason the SEC relies on whistleblowers to report violations of the FCPA, among other laws. Those who report bribery and other misconduct through the SEC whistleblower program are often employees of the companies involved. Employees receive protection from retaliation. If a company fires or takes other adverse employment action against a whistleblower, the employee can sue in federal court and seek double back pay (with interest), reinstatement, reasonable attorneys’ fees and court costs.

Just as important, an FCPA whistleblower can receive a percentage of any amounts the government recovers as a result of the information provided. These sums can be significant. For example, in fiscal year 2021 alone, 108 whistleblowers received $564 million in awards through the SEC program. That’s an average of $5.2 million per whistleblower.

If you’re aware of or suspect bribery or other illegal conduct by your employer or individuals at your company and are ready to share what you know, the whistleblower attorneys at Halunen Law stand ready to support you. We’ve recovered millions of dollars in compensation for individuals who had the courage to do the right thing. During a free, confidential consultation, our whistleblower lawyers can answer your questions and help determine if you have grounds to pursue a claim. Contact our firm at 612-605-4098 or submit this Contact Form online.

susan m coler employment attorneyA Partner at Halunen Law, Susan Coler is a member of the Halunen Law False Claims Act (FCA)/Whistleblower Practice Group. She represents whistleblowers who challenge illegal corporate conduct, particularly fraud against the government. As an MSBA Labor and Employment Law Specialist, Susan has also brought successful retaliation claims in connection with FCA/qui tam cases and as stand-alone actions

By Rocket55DevAdmin |

What once seemed like your dream job has turned into a nightmare. Maybe you endured harassment that your employer failed to address or stop. Perhaps you were denied opportunities, mistreated, or terminated because of your race, age, religion, disability, or other legally protected status. Maybe you observed illegal conduct in your organization. Or you may have had the courage to notify your manager or government authorities about the misconduct against you or the wrongdoing you observed, and your employer responded by making your work life a living hell or firing you for standing up for what’s right.

You’re at a Turning Point. Which Way You Turn Is Up to You.

You’re understandably angry about what your company has done – or is still doing – to you, your career, and your sanity. Through no fault of your own, and because of your employer’s wrongful and possibly illegal conduct, you’re out of work or about to be. A giant curveball has been thrown into your career path; you find yourself at a sudden, unexpected, and undeserved turning point; and you ask yourself, What do I do now?

The answer to this question, which thousands of Americans ask themselves each year after suffering workplace harassment, discrimination, retaliation, or wrongful termination, depends on the answer to another question: What do you want?

Put another way, when your employer has wronged you, what in your view would make it right? What would justice mean to you?

There’s no single or right answer to either of those questions. One person in your shoes may decide to put the experience in the rearview mirror and move forward with life. Another may want to keep their job or get it back. Some folks would want to put the company “on blast” and share the misconduct with the world or send angry emails to those responsible. Others may just want an apology.

For many wronged employees, however, justice means that their employers are held accountable for their wrongful actions and the damage they’ve done. This could mean raising potential claims in the context of severance negotiations or filing civil lawsuits to vindicate their rights and obtain compensation. It may also include pursuing whistleblower lawsuits for alleged violations of the law.

Whatever You Decide, Make Sure It’s an Informed Decision

Only you can decide what to do at this critical turning point. But to make this decision, you need to fully understand your rights and your options and how different courses of action could advance your desired goals.

The best way to do that is by meeting with an experienced employment lawyer to discuss your situation. Many law firms, including Halunen Law, offer free initial consultations to victims of wrongful employment actions. Meeting with one of our lawyers won’t cost you anything. It’s equally important to understand that meeting with or hiring an attorney doesn’t mean that you’ll pursue a lawsuit against your employer. That may not be the best course of action given your situation or objectives, or you may not have a viable claim. In our next post, we’ll discuss alternatives to litigation that employees can take when their employers violate their rights or engage in other illegal conduct.

Whatever direction you take, meeting with a lawyer is the first step in moving from being a victim to being in charge.

If you feel you’ve experienced illegal action in your workplace, we encourage you to submit a Case Review Form to our firm. One of our attorneys will review your information, and you’ll receive a response from our firm in a timely manner. There is no charge for this confidential process. And, if we take your case, as a contingency-based law firm, there is no cost unless we win.

We’re here to help you navigate your lawful rights and ensure you get the treatment you deserve. Together, we can hold employers accountable and create a fairer workplace for everyone.

By Rocket55DevAdmin |

Firm wins Gold Award honors in Star Tribune statewide “Minnesota’s Best” Campaign 

MINNEAPOLIS, MN (September 25, 2022): Minneapolis-based Halunen Law received the distinct honor of being selected for the second consecutive year as a Gold Award Winner for its outstanding work in the legal field. In the 2022 Star Tribune “Minnesota’s Best” campaign, voters from across the state made their preferences known, and once again Halunen Law received the top-ranked status in the Employment Lawyer and Law Firm categories. 

“We’re grateful to all who took the time to vote for Halunen Law in the Star Tribune 2022 Minnesota’s Best campaign. Halunen’s team of talented attorneys and staff is fiercely dedicated to defending employees and courageous whistleblowers who come to us at some of the most challenging times in their lives. Our successful record demonstrates the deep expertise and commitment we bring to each case. We’re humbled by the trust our clients have put in us these past 24 years, and to receive the Minnesota’s Best Award for the second year in a row is very gratifying. We promise to continue to fight for what’s right and create consequential change in the process.”

About the “Minnesota’s Best” Campaign: With one of the highest daily readership numbers per capita of any media publication in the country, the Star Tribune put their considerable reach across the state to launch their inaugural “Best of Minnesota” campaign. The campaign asked residents to give their opinions on multiple categories, including Food and Drink, Legal, Entertainment, Health Care, Education, and much more. More than 750,000 total votes were tabulated in 2022, resulting in reflection and celebration of “Minnesota’s Best” businesses and services across the state.   

About Halunen Law: Founded in 1998 and with offices in Minneapolis, Chicago, and Phoenix, Halunen Law offers experienced legal representation to employees, whistleblowers, and consumers. Halunen Law has achieved a reputation as a fearless, tenacious, and successful plaintiffs’ law firm, with a laser focus on achieving justice for its clients. For more information, visit halunenlaw.com.

If you feel you’ve experienced illegal action in your workplace, we encourage you to submit a Case Review Form to our firm. One of our attorneys will review your information, and you’ll receive a response from our firm in a timely manner. There is no charge for this confidential process. And, if we take your case, as a contingency-based law firm, there is no cost unless we win.

We’re here to help you navigate your lawful rights and ensure you get the treatment you deserve. Together, we can hold employers accountable and create a fairer workplace for everyone.

By Rocket55DevAdmin |

DashboardsThe federal government has several whistleblower programs that encourage, protect, and reward individuals for reporting fraudulent or illegal conduct. Few such efforts have been as successful and put more money in whistleblowers’ pockets as has the Securities and Exchange Commission’s (SEC) whistleblower program. 

The SEC reports that since the whistleblower program’s inception, it has awarded more than $1.1 billion to 214 people for providing information that led to successful enforcement actions involving securities fraud and other violations of the law. The SEC also reported that it made more whistleblower awards in fiscal year 2021 than in all previous years combined. Now, a rare piece of bipartisan legislation would further strengthen this program and provide more robust incentives and protections for those who report misconduct in the securities industry.

Introduced on March 31, 2022, by U.S. Sens. Chuck Grassley (R-Iowa) and Elizabeth Warren (D-Mass.), the SEC Whistleblower Reform Act of 2022 would speed up the claims process and implement new measures to prevent retaliation against whistleblowers.

What is the SEC Whistleblower Program?

Established by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the SEC whistleblower program provides a mechanism for individuals to give the government information about alleged acts of securities fraud. While whistleblowers are often employees of the company engaging in fraudulent conduct, anyone who reports past or ongoing violations of federal securities laws or regulations can use the program. 

If the information provided to the SEC results in a successful enforcement action, the whistleblower could receive a percentage of the ill-gotten gains recovered by the government. These sums can be significant. For example, in fiscal year 2021 alone, 108 whistleblowers received $564 million in awards through the SEC program. That’s an average of $5.2 million per whistleblower.

Recognizing that those courageous enough to report misconduct in the securities industry often do so at great risk to their careers and livelihoods, the SEC program prohibits retaliation to provide protection for whistleblowing employees. Victims of such retaliation can sue their employers in federal court and seek double back pay (with interest), reinstatement, reasonable attorneys’ fees and court costs.

How the Bill Would Increase Protection for SEC Whistleblowers

While the SEC whistleblower program is unquestionably successful, it’s not perfect. The proposed legislation focuses on two of the program’s biggest deficiencies: the time it takes for the SEC to process and disburse whistleblower awards and loopholes that expose employees to potential retaliation before they report misconduct to the SEC.

Some whistleblowers, many of whom were terminated because of their efforts, must wait up to four years for compensation. The bill would reduce the wait time by requiring the SEC to issue an initial ruling on a claim within one year of the claim filing deadline.

Additionally, SEC whistleblowers are only protected from retaliation if they provide information to the SEC or other select officials. This means that an employee who reports malfeasance internally and is then fired has no legal remedy under the current SEC whistleblower statute. The proposed bill would extend SEC whistleblower protections to those who face retaliation for reporting misconduct to a supervisor or other person they believe has the authority to address the misconduct. The bill would also clarify that employees can’t waive their whistleblower rights through pre-dispute arbitration agreements.

Halunen Law: SEC Whistleblower Attorneys

At Halunen Law, we have the utmost respect for whistleblowers. While the fate of the SEC Whistleblower Reform Act is uncertain, our SEC whistleblower attorneys continue to fiercely protect the rights of those who report misconduct in the securities industry and fight to get them the maximum amount of compensation available for their courageous efforts. If you need assistance or have questions about pursuing an SEC whistleblower claim, please contact Halunen Law or call us at (612) 605-4098 for a free consultation.

Halunen-Law-Content-Optimization-SEC-Whistleblower-blog-July-2022-Google-Docs

By Rocket55DevAdmin |

employee layoffs downsizing outsourcing halunenlaw.comWith no end in sight to the global pandemic, many companies and especially large corporations are preparing for the new workplace to take hold and are rethinking the way they do business. Some of the changes are welcomed by the employees, for example, a flexible schedule, the ability to work from home, less travel, and a limited commute. But unfortunately, big corporations are rethinking the way they do business by initiating drastic restructuring of its personnel.

Since the start of the global pandemic, many large corporations have drastically restructured their day-to-day business as well as the personnel. And although some of the companies are undergoing cost-cutting initiatives as a result of a business downturn, most large corporations, especially those that have benefited from the pandemic and significantly increased their revenues,[1] are now finding more ways to save money, often at the expense of their employees’ jobs.

You may have heard of Vishal Garg, the CEO of a mortgage company Better.com, who laid off 900 employees over a Zoom call. Or the P&O Ferries Executive who announced via Zoom that the company planned on replacing 800 employees with cheaper agency workers. On its face, it may seem that the company is making a business decision and there is nothing you can do about losing your job if you are laid off in this manner. But, it is crucial to remember, that these “legitimate business reasons” for firing employees often mask the wrongful terminations of employees of marginalized identities and troublemakers/whistleblowers.

When you find yourself in a situation where your employer implements significant layoffs, what can you do to ensure that your rights are protected? Here are some questions to consider:

    • Is it possible that you were laid off while other employees of a different race, gender, religion, age, or disability status got to keep their jobs?
    • Have you recently filed for or received workers’ compensation, or protections under the Family Medical Leave Act (FMLA) or requested a reasonable accommodation due to a disability?
    • Have you recently reported any violations of law to your employer?
    • Have you recently reported discrimination in the workplace, even if the discrimination was not directed at you?
    • Are you a member of a Union and was the Union Agreement followed per layoff terms?
    • Do you have a contract that provides for the terms of your layoff or that allows for-cause terminations only?
    • Are you over 40? Did your employer provide you with all the necessary documents per the Older Workers Benefit Protection Act (OWBPA)? See Laid Off Over 40? You Have Unique Rights.

Being laid off is extremely stressful. The experienced and skilled attorneys at Halunen Law stand at the ready and are committed to advising employees about their rights and helping you decide what to do. To consult with an attorney about your rights, please contact us today.

Halunen Law’s employment law group is a team of tenacious attorneys dedicated to ensuring employee rights and protections. If you’ve been wrongfully terminated, have faced discrimination, sexual assault, or harassment, or have been retaliated against for reporting illegal workplace activity, contact our office today. We’ll assess your case and determine your best path toward seeking justice. We represent clients on a contingency basis, so there is no cost unless we win.

Sources:
[1]  https://www.bloomberg.com/news/articles/2022-03-30/2021-was-best-year-for-u-s-corporation-profits-since-1950

Image Credit: Faizal Ramli  / Shutterstock

 

By Rocket55DevAdmin |

gavel and stethoscope on a pile of moneyPHOENIX, Ariz. (March 28, 2022) — In March 2022, False Claims Act whistleblower William Denner, in conjunction with the U.S. Attorney’s Office for the District of Arizona, reached a settlement of over $1 million with AZ-Tech Radiology & Open M.R.I., LLC (AZ-Tech), to resolve allegations of fraudulent billings to the Medicare, Medicaid, and TRICARE healthcare programs.

Specifically, the lawsuit alleged Defendants violated the False Claims Act (FCA) each time they knowingly billed federal healthcare programs for (1) administering contrast dye/media in preparation for magnetic resonance imaging (MRI) and computerized tomography (CT) diagnostic studies when there were no physicians on site to provide the required direct supervision and (2) services provided by radiologists located outside the United States.

The lawsuit against AZ-Tech was initiated by FCA qui tam relator Denner, who worked as a site manager at multiple AZ-Tech locations across the greater Phoenix metro area where he observed the alleged fraudulent conduct. Denner knew he had to act when he saw multiple patients suffer adverse reactions after receiving contrast dye injections – yet no physician was on site to help. In order to combat Defendants’ alleged fraudulent billings and ensure patient safety, he filed an FCA lawsuit in Arizona in July 2020 with the assistance of Halunen Law and Mahany Law, LLC.

“Mr. Denner filed his FCA case to address his concerns about patient harm and improper billing of government healthcare programs,” said Lon Leavitt, an FCA attorney with Halunen Law. “It took tremendous courage to act on his concerns. It was a privilege to represent Mr. Denner in this case and to work with the dedicated government officials who oversaw and handled the investigation.”

The success of this case exemplifies the importance and the strength of the public/private partnership between whistleblowers and the Department of Justice. DOJ is committed to combating fraudulent medical billing, particularly when the alleged fraudulent conduct may cause patient harm, and whistleblowers are a vital asset in identifying and prosecuting of these fraud cases.

Read the Complaint

Learn more about the False Claims Act

About Halunen Law

With offices in Minneapolis, Chicago, and Phoenix, Halunen Law offers experienced legal representation to employees and whistleblowers nationwide, including those reporting fraud against the government under the False Claims Act. Halunen Law has achieved a reputation as a fearless, tenacious, and successful plaintiffs’ law firm, with a laser focus on achieving justice and meaningful results for its clients. For more information visit halunenlaw.com.

About Mahany Law, LLC

Mahany Law, LLC is a national boutique law firm specializing in False Claims Act litigation around the United States with physical offices in Milwaukee and Tampa. Its lawyers have a track record of achieving several notable False Claims Act recoveries throughout the last decade and are committed to fighting for and obtaining the best possible results for their clients and American taxpayers.

By Rocket55DevAdmin |

pressure points executives use negotiating severance package

In any negotiation, each party comes to the process with unique pressure points. As the name implies, pressure points are those factors and considerations that put pressure on a party to close a deal and, accordingly, make them more open to compromise.

Executives who enter into severance negotiations with their soon-to-be-former employers often think they have no leverage or cards to play when seeking a better package, recognizing that, in most cases, employers aren’t legally obligated to offer them anything. But the truth is that their employers likely have several pressure points that departing executives can identify and exploit to obtain more generous terms, greater compensation, and better benefits in their severance packages.

Here are three pressure points for employers that executives should consider when they (and more specifically, their attorneys) evaluate and respond to a proposed severance agreement:

1. Fear of Future Claims

No business wants the uncertainty, disruption, and potential financial or reputational damage that are byproducts of employment litigation. Employer misconduct claims cost American businesses $20.2 billion in 2021, according to a Vault Platform study. That’s why companies attempt to insulate themselves against claims for harassment, discrimination, whistleblower retaliation and wrongful termination.

In exchange for offering a departing executive severance pay and benefits a company isn’t legally obligated to provide, the business will expect the employee to waive and relinquish any future legal claims against the employer. Definitively shutting down the threat of such litigation is worth money to the employer. If the employer worries that the executive may have viable claims, paying for an insurance policy against legal action instead of paying lawyers and a potential judgment or settlement is a bargain.

Many executives, however, may not be aware that they have potential employment-related claims. When a company makes an employment decision for legally prohibited reasons, there’s usually a pretense. That pretense may not be readily apparent. That’s why it’s critical to consult an employment attorney before signing a severance agreement. Even the possibility that an executive may have a claim can up the ante for the employer and lead to a sweeter deal.

2. Fear of Future Competition

Similarly, a company may use a severance agreement as a way to limit the executive’s competitive activities after the executive leaves. Executives must tread with caution if presented with such provisions. Noncompetition and nonsolicitation clauses in a severance agreement are valuable promises to the employer, but can severely restrict the executive’s ability to pursue new opportunities if they’re too broad and restrictive.

3. Fear of Bad-mouthing

Departing and disgruntled executives may not have the nicest things to say about their companies or colleagues. Even without a lawsuit or claim, word of a company’s allegedly toxic or problematic work environment or practices can spread quickly among employees and job candidates. Companies are often happy to offer more severance in exchange for a non-disparagement provision that can keep both sides from bad-mouthing the other.

If you feel you’ve experienced illegal action in your workplace, we encourage you to submit a Case Review Form to our firm. One of our attorneys will review your information, and you’ll receive a response from our firm in a timely manner. There is no charge for this confidential process. And, if we take your case, as a contingency-based law firm, there is no cost unless we win.

We’re here to help you navigate your lawful rights and ensure you get the treatment you deserve. Together, we can hold employers accountable and create a fairer workplace for everyone.

Image Credit: Portrait Image Asia / Shutterstock

By Rocket55DevAdmin |

pharmaceutical and medical kickbacks prohibited halunenlaw.comThe False Claims Act (FCA) is designed to combat and prevent healthcare fraud, including pharmaceutical or medical providers that illegally solicit or accept kickbacks [1].

Persons who become aware of illegal solicitation or acceptance of kickbacks in the healthcare industry can act as a whistleblower on behalf of the government and file an FCA lawsuit. Under the “qui tam” provisions of the FCA, these individuals can receive financial compensation for their efforts and legal protection from retaliation. In many cases, individuals who report kickbacks and other forms of healthcare fraud are current or former employees, patients, or others with unique opportunities to know about the alleged misconduct. They are motivated by a desire to do what is right. Whistleblowers thus serve an integral role in protecting patients, American taxpayers, and the integrity of our nation’s healthcare system.

Why are Kickbacks Illegal?

The primary reason why kickbacks are illegal in the healthcare industry is that they have a potent ability to interfere with a healthcare provider’s independent judgment resulting in treatment decisions that are made to serve the provider’s interest rather than the best interest of the patient. For example, a Yale study[2] found that cardiologists were between two and 11 times more likely to implant a defibrillator made by the device company that paid them the most money compared to physicians who did not receive payments. Another study showed that giving physicians even one free meal during which a particular drug was discussed resulted in a higher prescription rate. [3]

Accordingly, kickbacks are illegal for many reasons:

    • Kickbacks compromise the quality of patient care.
    • Kickbacks induce health care providers to consider their own interests before those of their patients.
    • Kickbacks drive up health care costs for patients and health insurance providers.
    • Kickbacks lead to medically-unnecessary treatments, medications, and other supplies/services.
    • Kickbacks and other forms of health care fraud cost taxpayers billions of dollars each year. [4]

In one of the largest health care fraud cases in American history [5], the government recovered $1.7 billion from HCA Inc., a provider that engaged in several unlawful practices, including providing kickbacks. This landmark case was sparked by nine FCA lawsuits brought by whistleblowers who ended up receiving a combined share of more than $151 million in financial rewards. These nine people helped initiate a course of action that ended the provider’s shocking record of criminal activity and fraud.

Federal Laws Prohibiting Kickbacks in Healthcare

While the FCA provides a process for whistleblowers to file lawsuits on behalf of the government, there are two specific federal laws that make healthcare kickbacks illegal in the United States—the Anti-kickback Statute (AKS) and the Stark Law. Violations of both these laws can be prosecuted under the FCA.

The Anti-Kickback Statute, 42 U.S.C. § 1320a–7b(b)

The AKS is one of several fraud and abuse laws that apply to the healthcare industry. [6]
The AKS makes it illegal to offer, solicit, or accept anything of value to motivate or reward referrals in any capacity. Essentially, a medical provider or company is committing fraud when incentives are provided to encourage the use of certain products or services for which payment is made via federally-funded programs, such as Medicare, Medicaid, and Tricare.

Examples of kickbacks include:

    • Cash payments
    • Gifts
    • Travel and entertainment
    • Free or discounted services or supplies

 

It is not unusual for organizations and providers to disguise illegal kickbacks as legitimate medical payments. For example, a pharmaceutical company may hide illegal activity by paying a doctor an inflated rate for a speaking engagement. Regardless of the basis of a specific payment, the arrangement as a whole can still be categorized as fraudulent if its intent is to influence behavior.

Both the payers and recipients of kickbacks can be prosecuted under the AKS. Penalties for kickbacks can include criminal and civil measures, including fines, jail, and removal from federal healthcare programs. A conviction does not require the government to prove that the conduct harmed patients or caused financial loss.

Violations of the AKS can be prosecuted under the FCA and may result in an award of damages up to three times the full amount the government paid for the kickback-tainted products or services as well as civil penalties.

The Stark Law, 42 U.S.C. § 1395nn

The Stark Law focuses specifically on physicians. It prohibits them from referring Medicare/Medicaid patients to medical providers for particular health services if the referring doctor has a financial relationship with that provider. Financial relationships include ownership, investment interests, or other compensation arrangements. Unless an exception applies under the Stark Law, it is illegal to make these referrals and submit claims for any payments related to these prohibited referrals.

Violations of the Stark Law can be prosecuted under the FCA and may result in an award of damages up to three times the full amount the government paid for the Stark-tainted services as well as civil penalties.

Key Difference between the Anti-Kickback Statute and the Stark Law

The most important difference between the Anti-Kickback Statute and the Stark Law is each law’s focus.

The Anti-Kickback Statute covers referrals from anyone for any services or items paid for by any federal healthcare programs. However, the Stark Law is more specific, focusing on referrals from a physician made for designated health services under Medicare or Medicaid.

Under both of these federal laws, violations can also be considered a violation of the FCA. Therefore, individuals with knowledge of AKS or Stark law violations can bring a “qui tam” lawsuit through the FCA.

Report Medical Kickback Schemes and Stark Violations through the FCA with Help from Halunen Law

If you suspect a healthcare provider of soliciting or accepting illegal kickbacks, Halunen Law can review your case and provide professional guidance about next steps to take and whether a False Claims Act case may be viable.

Our False Claims Act attorneys at Halunen Law practice nationwide, advocating for whistleblowers who speak up against healthcare industry misconduct. With extensive expertise and a proven track record of success, the anti-kickback lawyers at Halunen Law are well-equipped to protect you from illegal retaliation and ensure the best possible outcome.

If you feel you’ve experienced illegal action in your workplace, we encourage you to submit a Case Review Form to our firm. One of our attorneys will review your information, and you’ll receive a response from our firm in a timely manner. There is no charge for this confidential process. And, if we take your case, as a contingency-based law firm, there is no cost unless we win.

We’re here to help you navigate your lawful rights and ensure you get the treatment you deserve. Together, we can hold employers accountable and create a fairer workplace for everyone.

 

Sources:
[1]  https://www.justice.gov/civil/false-claims-act
[2] https://www.icij.org/investigations/implant-files/heart-doctors-more-likely-to-implant-devices-from-manufacturers-that-pay-them-new-study-finds/
[3] https://www.nbcnews.com/health/health-news/free-lunches-pay-drug-companies-study-shows-n595906
[4]  https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/Downloads/Fraud-Abuse-MLN4649244.pdf
[5]  https://www.justice.gov/archive/opa/pr/2003/June/03_civ_386.htm
[6]  https://oig.hhs.gov/compliance/physician-education/fraud-abuse-laws/

 

 

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By Rocket55DevAdmin |

upcoding and unbundling in healthcare fraud halunenlaw.comUpcoding and unbundling in healthcare are two forms of improper medical coding. Both fall under the federal government’s definition of healthcare fraud when the government is paying for the care and can be pursued through the False Claims Act.

With serious implications that can cause harm to patients, taxpayers, and the American healthcare system as a whole, fraudulent practices such as these are aggressively investigated, prosecuted, and penalized.

What is Upcoding?

Considered a serious form of fraud, upcoding occurs when a healthcare provider inflates bills to the government by submitting false medical codes to Medicare, Medicaid, TRICARE, or other government payers—that is, the provider bills for diagnoses and services that are more serious and expensive than the actual services rendered.

Many kinds of healthcare providers have been investigated for upcoding, including physicians, healthcare facilities, providers of home health care, physical therapy providers, and even entire healthcare networks.

Providers and insurers use billing codes to communicate the services provided to various patients. Each billing code corresponds to a specific diagnosis or service while simultaneously labeling the complexity of work required by the provider and, thus, the associated costs. Government (and private) insurers use these billing codes to calculate and issue payments to healthcare providers.

The consequences of upcoding are serious and affect both the patients involved and insured patients as a whole. Because upcoding leads to an unnecessary increase in insurer spending, it can be a catalyst for increased rates or reduced coverage. In addition, upcoding involving government payors such as Medicare and Medicaid steal vital funds from taxpayer-funded healthcare programs. On an individual patient level, upcoding fraud has an impact on the integrity of a patient’s medical records and may prevent them from receiving proper care in the future.

Doctors and Upcoding

All doctors must document provided care and services and then utilize standardized medical billing codes to bill insurers for the procedure(s). This expectation applies to both primary care and specialty physicians.

Doctors engage in upcoding when they manipulate medical coding to obtain financial compensation that exceeds what they have fairly earned. There are generally three types of upcoding fraud committed by doctors

    • A physician may perform a simple, routine procedure, then use a different code to indicate that a more complex (and higher-paying) procedure was completed.
    • A physician may use incorrect Evaluation & Management (E&M) codes to suggest that a patient’s visit required more of their time/expertise than it actually did.
    • A physician may attempt to apply modifier codes to bill for specific additional services, despite those services being covered under the standard code for the visit in question.

Hospitals and Upcoding

Upcoding can also occur on a larger scale, such as at the hospital/healthcare facility level. The costs associated with hospital-provided inpatient care are governed using pre-determined rates, which depend on the diagnosis-related group (DRG) to which they belong. The DRG is directly tied to the severity of a patient’s diagnosis, as well as the type of stay they require, which are determined according to diagnosis codes (ICD codes).

Two of the most common types of upcoding committed by hospitals are:

    • When a hospital bills for physician-provided care, even though the care was actually provided by a lower-paid professional, such as a nurse or physician’s assistant
    • When a hospital bills an inpatient stay at the highest-possible severity level, even though the patient received routine care with no secondary diagnosis, major complication, or comorbidity (additional patient condition).

Upcoding and Other Healthcare Providers

In addition to doctors and hospitals, upcoding fraud can also be committed by other entities. For example, federal medical fraud cases include upcoding carried out by urgent care facilities, home healthcare agencies, and durable medical equipment (DME) providers.

What is Unbundling?

Another form of improper medical coding and fraud is unbundling, also referred to as “fragmentation.” This fraudulent activity most commonly occurs in bills submitted to Medicare and Medicaid because the federal insurers often provide lower reimbursement rates for specific types of medical procedures that tend to be performed together. For example, incisions and closures related to surgical procedures will be bundled or combined with the procedure itself – or multiple blood tests from a single specimen will be bundled at a specific billing amount. Typically, the total reimbursement rate will be lower than it would have been for the procedures billed separately.

Unbundling in medical coding occurs when a healthcare provider fragments or unbundles billing codes to receive a higher reimbursement amount. Providers may utilize electronic health records (EHR) software to falsify treatment notes or alter the displayed codes, thus justifying the unbundled billing at the higher rate.

Like upcoding, unbundling is an act of fraud committed against the federal government. It carries serious penalties that can include fines, loss of medical license, and jail time.

Reporting Upcoding and Unbundling or Other Forms of Healthcare Fraud under the False Claims Act

Medical upcoding fraud and unbundling fraud are illegal, can cause patient harm, and line the pockets of those who would cheat the government at the cost of government health systems and all taxpayers. The Government relies on persons with knowledge of upcoding or unbundling, such as employees, coding personnel, and even patients themselves, to bring these illegal practices to light when they involve government-provided healthcare.

Persons with knowledge of upcoding or unbundling may challenge this illegal coding conduct by bringing a lawsuit under the False Claims Act. The FCA is a federal statute designed to reward whistleblowers who bring “qui tam” lawsuits against companies and individuals defrauding the government. If the Government succeeds in getting money damages or civil penalties from the coding claim, the person reporting the fraud is generally entitled to between 15-30% of the money recovered. Additionally, the False Claims Act can protect whistleblowers from retaliation for reporting the illegal conduct.

The Government may also prosecute upcoding or unbundling criminally, and a conviction can result in severe penalties. Fines, revocation of medical licensure, and jail time are all possible outcomes of a conviction.

Private individuals must be represented by counsel to file an FCA lawsuit. If you are aware of upcoding, unbundling or other types of federal fraud, your first step should be to contact a law firm with deep experience in bringing False Claims Act lawsuits. Most FCA attorneys work on a contingency basis, meaning that you pay nothing unless your case is successful.

The healthcare fraud attorneys at Halunen Law have worked extensively with cases such as these, providing legal expertise, advocacy, and protection to the courageous individuals that speak out against corporate fraudulent conduct. Every case is unique, but we have built the experience and skill necessary to fight on your behalf.

If you feel you’ve experienced illegal action in your workplace, we encourage you to submit a Case Review Form to our firm. One of our attorneys will review your information, and you’ll receive a response from our firm in a timely manner. There is no charge for this confidential process. And, if we take your case, as a contingency-based law firm, there is no cost unless we win.

We’re here to help you navigate your lawful rights and ensure you get the treatment you deserve. Together, we can hold employers accountable and create a fairer workplace for everyone.

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