How HIPAA and the False Claims Act Can Hurt Whistleblowers
The Health Insurance Portability and Accountability Act of 1996, known more broadly as HIPAA, is a United States law applicable to data security and privacy of health care records and the patients associated with them. The fines for HIPAA violations can be extensive, and if an individual acts in a way that doesn’t uphold HIPAA, their jobs and reputations are at risk.
Besides the stipulations of HIPAA, many health care workers may encounter the False Claims Act (FCA), especially if they are involved with federal programs, such as Medicare. The FCA came to be as a way to fight back against government contractors that billed federal agencies for grossly inflated amounts of money.
A person working in health care who is familiar with federal programs could be exceptionally well poised to act as a whistleblower by sounding the alarm on unlawful activity. In that situation, they can file a suit under the FCA even if the events in question are not personally injurious.
In certain circumstances, if the government successfully recovers damages, the whistleblower gets a percentage of the results.
As such, the FCA provides a financial incentive for whistleblowers in any industry to come forward instead of staying quiet. The complicated thing about whistleblowers in the health care industry is that they may be under the impression that speaking up constitutes a HIPAA violation.
Whistleblowing and HIPAA
Many health care workers do not realize that there are HIPAA exclusions that allow them to disclose protected health information (PHI) while acting as a whistleblower. More specifically, the whistleblower must be reporting about a person or organization participating in unlawful conduct, or conduct that violates professional or clinical standards.
Furthermore, the whistleblower may shine a light on an entity that provides care, services or conditions that put patients, workers or the public in danger. The specifics don’t stop there, though. They must believe in good faith that one of the violations above occurred, plus report their concerns through the proper channels. Those are:
- A public health authority or health oversight agency that has the legal authority to investigate the allegations
- A health care accreditation organization if the charges relate to professional or clinical violations
- An attorney hired by the whistleblower to investigate legal options
The U.S. Department of Health and Human Services (HHS) appointed a whistleblower ombudsman to help educate HHS employees about their rights if they act as whistleblowers, as well as to inform them about the prohibitions against retaliation.
If a health care worker sees unlawful activity happening while employed by an entity other than the HHS, it’s easy to see how the fear of a HIPAA violation could have a chilling effect against a person considering speaking up as a whistleblower.
Whistleblowers Are Instrumental Parts of False Claims Act Recoveries
The damages recovered in False Claims Act cases over the last 25 years total more than $35 billion, with direct whistleblower activity accounting for about 70% of it. Many whistleblowers raise awareness of pharmaceutical fraud, which can encompass things like inaccurate drug pricing, misleading or falsified clinical trial data, or pharmaceutical companies marketing their products for unapproved uses.
Even though whistleblowers could get financial incentives after successful FCA cases, some remain hesitant and know their lives will never be the same after they come forward and begin working with investigators.
Darren Sewell was a high-ranking employee at a health insurer called Freedom Health, and his whistleblower case was one of the first that showed federal investigators how to defraud a program called Medicare Advantage. However, he worked as a double agent, working at Freedom Health while wearing a wire, then reporting back to federal authorities.
Doing that took a significant toll on Sewell, and the case persisted for years. Indeed, some people may feel they have a moral obligation to become whistleblowers based on what they see in their work. However, they must also keep in mind that there’s likely a long road ahead, and it will be a tough one. Some of them may ultimately decide that the harm they experience from whistleblower stress isn’t worth it.
One recent development in the U.S Supreme Court at least gives whistleblowers more time to take action. A ruling in May 2019 provides them with up to four years of extra time when filing FCA cases in health care or other sectors. Then, they can more carefully weigh the pros and cons before deciding what to do.
A Complicated Matter
Whistleblowers undoubtedly play a crucial role in helping uncover the illegal acts that defraud government entities and programs.
However, the information above explains why HIPAA laws and the related effects of an FCA filing could have negative effects on health care workers, too.