74% of Federal Whistleblower Lawsuits DO NOT RESULT IN JUDGMENTS

74% of Federal Whistleblower Lawsuits DO NOT RESULT IN JUDGMENTS

July 24, 2014

If it’s been awhile since high school history above is an overview of the Office of the Attorney General (held by Eric Holder); and below are those departments involved in healthcare fraud cases.  5,400 federal whistleblower law suits (also known as “qui tam” or False Claims Act) have been filed from fiscal 1987 through 2010; and, according to The Department of Justice statistics cited in The Wall Street Journal 74% of the cases not achieve financial settlement or judgment. Over 56% of those cases are healthcare fraud.

Despite the alarmingly low number of successful cases critics of the program say the act’s incentives go too far and encourage people to file suits.  Personally, I’d like to know if these “critics'” are capable of math, because they’re way off on multiple levels.  74% of the time people reporting these crimes are exposed and no longer able to work in their industries and did not receive any money.

That doesn’t always mean it wasn’t a strong case or it was a frivolous case, it could mean the government just didn’t feel confident in their abililty to successfully prosecute the case and dropped it.  As with anything there is good and bad and one who started out as good, Dr. William LaCorte a 65-year old internist, to date has filed 12 Medicare fraud whistleblower lawsuits.  This means three thing:  1.  Dr. LaCorte needs a hobby 2.  There is an inordinate number of fraud in healthcare 3. The system including The Department of Justice is deeply flawed.

Again, according to “critics” this logic would stand to reason 26% of successful cases sell the dream to the other 74%.   Why would anyone risk their livelihood, invite multiple layers of government into their lives for small chance for a huge payout?  The problem with that logic is that little is understood from those outside the medical industry of what all these high dollar “settlements” or “judgments” actually translate to for the whistleblower.   That is by design from The Department of Justice and sold to the media via PR Spun press releases.

It’s usually unfairly assumed and adopted by media that the whistleblower is “greedy” or “set for life,” as was a comment made by Al Lewis from Marketwatch without actually understanding the facts of the payout.

According to MarketWatch, Peggy Ryan, a former employee of Endo Health Solutions just ended a ten year-long battle working in conjunction with The Department of Justice in a whistleblower case for the company’s illegal off label marketing of Lidoderm (pain patch). 

But the episode is on track to end with a lot of money in Ryan’s bank account (conjecture from Al Lewis).

Confused yet?  Because if you’re not I didn’t do something right. The Wall Street incorrectly states:

The government gets most of any money recovered, typically from settlements companies sign. Successful whistleblowers are entitled to collect up to 30%, minus lawyers’ fees.

It’s not that simple:  1. Most cases are 15%-25% and a source at The Department of Justice stated that “no one gets the full amount of 25%.”  2.  Up to 30% if the Government does not intervene (which the cases we’re discussing they did intervene-refer back to point 1)

Whistleblowers are paid on  the civil portion of the case; and, then the calculation percentage of Medicare/Medicaid is applied and then the whistleblower is awarded 15-25% of that amount.  So when the media reads $100 million-I’d be less concerned on what the whistleblower walked away with and more concerned about what the government is doing with all that money???  Line Dancing anyone?

National Whistleblower Day July 30