The Ethical Duty to Report Healthcare Fraud

October 24, 2023
The Ethical Duty to Report Healthcare Fraud

The National Health Care Anti-Fraud Association (NHCAA) reports that healthcare fraud leads to tens of billions of dollars in costs every year, and these costs impact everyone in varying ways, from diminished quality of care to exponential increases in insurance premiums or taxes when it comes to Medicare fraud or Medicaid fraud.

Is it enough to abide by the code of ethics, prioritize patient care, and follow healthcare laws but somehow stay quiet? Reporting co-workers, peers, supervisors, and employers when you witness unethical or illegal behavior is another step toward ensuring patient safety and promoting transparency and integrity in the medical field. But, as a healthcare professional, do you have an ethical duty to report suspected cases of fraud?

Reporting unethical or illegal behavior within the workplace is a moral imperative, resonating with the broader mission of healthcare providers to protect their patients and maintain the trust of the public, and consistent with the moral imperative professionals within the healthcare industry have a state-by-state ethical duty to report wrongdoing as well. The regulatory boards recognize the importance in disclosing fraud as an essential step in preventing potential harm to patients and preserving the integrity of the healthcare system itself and maintaining a culture of transparency and accountability within healthcare organizations which ensures that unethical practices are rooted out promptly.

Ethical Duty to Report Healthcare Fraud

The American Medical Association (AMA) calls the dishonest and unethical conduct of medical professionals reprehensible and states that physicians and the entire medical profession are obligated to address instances of misconduct. Ethics is the term of art used to define how a given profession regulates its constituents. Sometimes, ethics is colloquially used to describe a moral obligation and one would certainly agree that morality dictates rooting out fraud, but sometimes ethics doesn’t directly correspond to morality. For example, patients are entitled to a doctor-patient privilege and sometimes in the psychology world there is a tension in which a patient tells a psychiatrist or psychologist very troubling information about their past, and even though the moral thing to do would be to disclose the conduct, the ethical rule is generally to keep it quiet thus enabling all patients to be able to confide in their physician. However, there is no privilege in keeping quiet about fraud against the government or private insurance. If there is a systemic practice of defrauding insurance the applicable codes of conduct dictate the conduct must be permitted. That’s a must which is a mandate, as opposed to a may which is permissive.

The ethical obligations to report healthcare vary by state, but one thing is consistent, that you can discuss your concerns with a whistleblower attorney without violating HIPAA if you believe there is

fraud. If there’s Medicare fraud, Medicaid fraud, and/or Tricare fraud you have specific rights under the False Claims Act in which you can through the use of a False Claims Act whistleblower attorney report the fraud and potentially receive up to 30% of what the government recovers as a whistleblower award. Similarly, under states like California’s whistleblower statute and Illinois’s whistleblower statute you can report fraud against private insurance and receive up to 50% as a whistleblower award.

On the federal level, regulation, oversight, and investigation of healthcare fraud involves a broad range of agencies, including the U.S. Department of Health and Human Services, the NHCAA, the Federal Bureau of Investigation (“FBI”), The Department of Justice (“DOJ”) and the Centers for Medicare and Medicaid Services (“CMS”). Just like in the medical profession the secret code of the profession is the language, interfacing with the government is best left to whistleblower law firms that have experience doing so and further, those that have former DOJ and/or FBI attorneys.

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Financial Incentives for Blowing the Whistle

Individuals who expose Medicare fraud through whistleblowing may qualify for substantial financial incentives, typically amounting to anywhere from 15% to 30% of the total recovered funds under the False Claims Act as whistleblower reward and up to 50% under California and Illinois whistleblower statutes. To be eligible for such a reward as a Medicare fraud whistleblower, you must possess direct, firsthand knowledge of the fraudulent activities and be the initial individual to report them.

Code of Ethics

Doctors, nurses, and other medical professionals are bound by a code of professional ethics and legal regulations. Despite any good intentions to protect one’s colleagues, physicians and other healthcare providers are obligated to disclose fraud and those who commit fraud are subject to penalties and legal consequences.

At a minimum, healthcare professionals have an ethical obligation, dictated by the AMA, to speak up when they witness or suspect fraud. Common examples of healthcare fraud include the following:

  • Upcoding
  • Double billing
  • Providing services without the proper license
  • Billing for care that wasn’t rendered
  • Performing procedures that aren’t medically necessary
  • Falsifying diagnoses
  • Accepting or providing kickbacks

Maintaining integrity in healthcare is critical for the health and safety of patients, and you can help promote this by reporting suspected fraud.

Whistleblower Protections

The False Claims Act serves as a protection for whistleblowers who expose instances of Medicare fraud. It shields them from potential repercussions, including job loss, demotion, or harassment. In cases where a whistleblower experiences retaliation for their Medicare fraud report, they have the legal recourse to initiate legal action to receive compensation for back pay, front pay, and attorneys’ fees. Of course, there is the confidential component of the False Claims Act with the initial filing of the case secretly under seal, which typically stays like that for many years.

The False Claims Act stands as a potent tool in the protection of whistleblowers and the fight against Medicare fraud. If you suspect Medicare fraud is occurring, it is advisable to engage the services of a whistleblower law firm. Such firms can provide invaluable guidance on your rights and available options. Moreover, should you decide to take legal action against retaliation, they can serve as your representatives. It’s important to note that filing a report under the False Claims Act necessitates the involvement of a qui tam law firm, as self-representation (pro se litigation) is not permitted.

In essence, the battle against healthcare fraud is codified in the ethical canons . While the ethical duty is clear, sometimes taking the first step is not, as one may feel like they’re putting their career on the line to do what’s right. This is why it’s important to speak with an experienced healthcare fraud law firm who an educate you on what your options are and if you blow the whistle the right way, you can have it documented that you reported the misconduct so when the scam is finally revealed it will show you were part of the solution, not part of the problem and your license will be intact.