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CMS Proposes to Increase Awards for Non-Qui Tam Whistleblowers

Written by Ellyn L. Sternfield

CMS wants to change the way that it rewards non-qui tam whistleblowers who report alleged fraudulent or unlawful conduct related to Medicare or Medicaid. Using an IRS program as a model, CMS recently proposed rule changes to increase the cap on potential non-qui tam whistleblower rewards from a maximum of $1000, to 15% of the final amount collected (capped at $9.9 million) as a result of legal or administrative action. 

As I noted in a Thompson Reuters news article on the CMS proposal, the lack of benchmarks on what constitutes a viable report could overwhelm the agency.  While the IRS program was intended to increase the number of cases the IRS investigates and pursues, CMS is not the agency that actually investigates and prosecutes allegations of health care fraud: DOJ and the HHS OIG play that role.  And right now, DOJ and the HHS OIG act on only a fraction of the health care related qui tam cases filed, in part due to a professed lack of resources.  If the CMS proposal goes into effect, it will be interesting to see what role, if any, CMS actually takes on in the process of screening and investigating the resulting reports of alleged unlawful conduct.     

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Karen S. Lovitch

Chair, Health Law Practice & Co-Chair, Health Care Enforcement Defense Practice

Karen advises industry clients on regulatory, transactional, operational, and enforcement matters. She has deep experience handling FCA investigations and qui tam litigation for laboratories and diagnostics companies.