Thursday, July 29, 2010

Healthcare Fraud - Reforms May Lead to More Whistleblowers and Lower Costs

We often hear prospective jurors say they are hesitant to find in favor of plaintiffs because it may cause a rise in the cost of goods, services, and especially insurance.  While there are many arguments to the contrary, we cannot, at length, debate the issue during jury selection.  If we could, we would point out that, unlike legitimate tort claims, healthcare billing fraud costs consumers billions of dollars annually.  Fortunately, as Bloomberg reports, healthcare reform laws may make it easier for those aware of such fraud to report it without fear of employer retaliation.

When a worker reports such fraud, they are often referred to as a whistleblower, and the suit which may follow is referred to as a qui tam action.  Qui tam is an action brought by an informer which seeks a penalty for acts such as healthcare billing fraud and provides that the informer may recover some funds for his or her efforts.  The remainder of the fund goes to the state or other institutions which were affected by the fraud.  Such cases deter fraud and recover millions, and sometimes billions, of dollars which go back into the system to defray costs.

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