Taking employee concerns seriously about patient eligibility and other issues can help prevent hospices from becoming involved in a False Claims Act case.

The overwhelming majority of False Claims Act cases involve qui tam whistleblowers, usually a current or former employee who observed alleged malfeasance or errors. In a qui tam action, a whistleblower, called a “relator” by the courts, files a False Claims Act suit on behalf of the government and possibly receives a portion of any funds recovered by the government via the lawsuit, typically ranging from 15% to 25%.

In Fiscal Year 2023, for example, these cases recovered $2.3 billion of the total $2.68 billion recouped by the government in FCA settlements and judgements, according to a report from the law firm Polsinelli.

Listening and responding in good faith to employee concerns is key to avoiding such lawsuits, Thomas Barnard, attorney and shareholder for the law firm Baker Donelson, said in a presentation at the National Hospice and Palliative Care Organization (NHPCO) Annual Leadership Conference.

“When people bring claims to you in compliance, this is where all False Claims Act cases begin. If you’re like, ‘Just stop being a problem. Go back to work,’ that’s the birth of all False Claims Act cases,” Barnard said. “They get disgruntled; they eventually quit, or they get fired because they’re disgruntled, and then they end up going and filing one of these claims.” 

If an employee is treated badly, fired or experiences adverse work conditions as a result of coming forward, they can add a retaliation claim to their qui tam complaint. These claims stand on their own, so even if the hospice did not violate the False Claims Act, they can still be penalized for retaliation, according to Katherine A. Proctor, executive advisor for Omnia Healthcare Group.

The consequences of a False Claims Act investigation can be severe. These cases can take years to adjudicate at considerable expense, Proctor indicated.

If investigators discover violations, the government can take back as much as three times the full amount of related claims, as well as additional penalties, Barnhard said. In some cases, a hospice can be put on a Corporate Integrity Agreement, a legally binding contract with the U.S. Department of Health and Human Services Office of the Inspector General (OIG) to address compliance issues and suspected fraud, waste and abuse.

Hospices should always involve an attorney when responding to False Claims Act investigations, even if they are not the ones under scrutiny, Proctor said. Sometimes a hospice can receive a request for documentation or other information in connection with an investigation of other companies with which they do business.

“Don’t panic, but you take it very seriously every single time. You just want somebody talking with the government on a regular basis, and you don’t want it to be you,” Proctor said at NHPCO. “Even if you read it and say, ‘This probably isn’t about me,’ just get a lawyer involved anyway. You just want somebody whose only real job is talking to the government about this specific thing.”