Copyright© 2011 WeComply, Inc. All rights reserved. 9/6/2015 Whistleblowing

Copyright© 2011 WeComply, Inc. All rights reserved. 9/6/2015 Whistleblowing

Copyright© 2011 WeComply, Inc. All rights reserved. 3 Healthcare Fraud: The Big Picture U.S. government spends $500 billion annually on healthcare Healthcare fraud drains $70 billion annually from federal healthcare funds Best defense against healthcare fraud: Vigilant employees who "blow the whistle" on fraud or other misconduct More than half of U.S. government fraud recoveries involve healthcare Law provides rewards and protections for whistleblowers

Copyright© 2011 WeComply, Inc. All rights reserved. 4 In the news… Anti-Fraud Spending No-Brainer With fraud draining $70 billion annually from federal healthcare funds, federal authorities are ramping up their efforts to curb Medicare fraud. In three major multi-state sweeps over the course of two months, authorities made 140 arrests and recovered more than $370 million. A recent study concluded that for every dollar spent to investigate and prosecute healthcare fraud in civil cases, the federal government receives fifteen dollars in return. Funds Spent on Prosecution Yield Big Returns

Copyright© 2011 WeComply, Inc. All rights reserved. 5 The False Claims Act False Claims Act (FCA) provides whistleblowing protections and rewards Enacted during Civil War to punish abuses by government contractors Amendments provide citizens with incentives to expose fraud FCA is the best tool to recover U.S. government funds diverted through fraud Companies that submit false claims are liable for three times the government's damages, plus civil penalties FCA also provides administrative remedies FCA prohibits many different types of fraud

Copyright© 2011 WeComply, Inc. All rights reserved. 6 The False Claims Act (cont’d) False Claims Act (FCA) provides whistleblowing protections and rewards Enacted during Civil War to punish abuses by government contractors Amendments provide citizens with incentives to expose fraud FCA is the best tool to recover U.S. government funds diverted through fraud Companies that submit false claims are liable for three times the government's damages, plus civil penalties FCA also provides administrative remedies FCA prohibits many different types of fraud

Copyright© 2011 WeComply, Inc. All rights reserved. 7 Types of Healthcare Fraud Healthcare fraud can arise through — Providing goods and services Providing gifts, business courtesies, meals, discounts and rebates Giving educational grants, funding for research or studies, or charitable contributions Common forms of healthcare fraud: Charging exorbitant prices Billing for products or services not provided Billing for medically unnecessary services Paying or receiving kickbacks

Copyright© 2011 WeComply, Inc. All rights reserved. 8 Alert! Forms of Healthcare Fraud One of the most common types of healthcare fraud is billing for goods or services not provided. For example, healthcare fraud may occur when — A physician's office overstates the duration of an office visit; A medical school claims to provide coverage by a physician, when the coverage was actually provided by a resident; A laboratory claims to have performed tests or X-rays that it did not perform; A pharmacy dispenses less than the prescribed amount of a drug but charges for the full prescription; A medical transportation provider overstates mileage for trips; and A fake provider organization systematically obtains personal healthcare information from individuals, then files false claims for services supposedly provided to those persons.

Copyright© 2011 WeComply, Inc. All rights reserved. 9 Qui Tam Suits Under FCA, employee with knowledge of fraudulent misconduct can bring qui tam lawsuit Lawsuit is on behalf of government If lawsuit results in recovery by the government, employee is entitled to up to 30% FCA provides financial incentive for employees to become whistleblowers Person who files qui tam suit is called the relator

Copyright© 2011 WeComply, Inc. All rights reserved. 10 Qui Tam Suits (cont’d) Under FCA, employee with knowledge of fraudulent misconduct can bring qui tam lawsuit Lawsuit is on behalf of government If lawsuit results in recovery by the government, employee is entitled to up to 30% FCA provides financial incentive for employees to become whistleblowers Person who files qui tam suit is called the relator

Copyright© 2011 WeComply, Inc. All rights reserved. 11 Special Note…

Copyright© 2011 WeComply, Inc. All rights reserved. 12 Evaluating a Possible Qui Tam Suit To bring a qui tam suit under the FCA — Whistleblower must have actual knowledge of the fraud Evidence of fraud must be specific Fraud must involve federal money Factors that preclude a qui tam suit: Fraud involves tax fraud Evidence comes from a public source A state is alleged to have defrauded the federal government

Copyright© 2011 WeComply, Inc. All rights reserved. 13 Whistleblower Protection Whistleblower laws protect those who — Complain in good faith of illegal activity Lawfully attempt to stop illegal activity Participate in resulting investigation of illegal activity We encourage employees to disclose improper conduct and protect those who do We will keep all reports alleging or disclosing improper activities confidential to the extent possible We will not tolerate any adverse action against an employee who makes a good- faith report or complaint about suspected violations

Copyright© 2011 WeComply, Inc. All rights reserved. 14 Whistleblower Protection (cont’d) Whistleblower laws protect those who — Complain in good faith of illegal activity Lawfully attempt to stop illegal activity Participate in resulting investigation of illegal activity We encourage employees to disclose improper conduct and protect those who do We will keep all reports alleging or disclosing improper activities confidential to the extent possible We will not tolerate any adverse action against an employee who makes a good- faith report or complaint about suspected violations

Copyright© 2011 WeComply, Inc. All rights reserved. 15 Pop Quiz! Emilio suspected that his supervisor was engaging in Medicare fraud, but he wasn't sure and had no evidence. He was afraid that if he reported his supervisor and turned out to be wrong, he wouldn't be protected as a whistleblower. Would Emilio be protected if he reported his suspicions? A. No, because he must be certain. B.Yes, if his report is in good faith. C.Yes, absolutely. D.No, because he needs evidence.

Copyright© 2011 WeComply, Inc. All rights reserved. 16 Reporting Fraud Employees, officers and directors all have a duty to report fraudulent activities If reporting fraudulent activity to your supervisor is impractical or inappropriate — Report to Legal Department; or Report anonymously through our hotline You also have a duty to cooperate in investigations of alleged wrongdoing if requested Do not discuss allegations or investigation with anyone outside of investigative chain

Copyright© 2011 WeComply, Inc. All rights reserved. 9/6/2015 Final Quiz

Copyright© 2011 WeComply, Inc. All rights reserved. 9/6/2015 Questions?

Copyright© 2011 WeComply, Inc. All rights reserved. 9/6/2015 Thank you for participating! This course and the related materials were developed by WeComply, Inc. and the Association of Corporate Counsel.