Wrongful termination claims include reporting a violation of a statute of public importance to supervisors or the government — commonly referred to as “blowing the whistle.” (Courtesy photo)

Employee protections when reporting crimes

This week’s question comes from a reader who wishes to remain anonymous:

Q: “Chris, I worked in the accounting department of a health care provider. Last year, my company discovered it had been using the wrong billing code for a key service when submitting Medicare reimbursement requests. This resulted in the government paying substantially more for the service than it should have. My supervisor directed me to compile a list of the overcharges for senior management. The company remedied the error for new reimbursement requests but never informed the government of the overpayments. Two weeks ago, I sent an email to my supervisor asking why the company had not reported the billing error. I was told the matter had been resolved and not to raise the issue again. I would know if the company reimbursed Medicare for the overcharges. No payment was made. Last week, I was laid off without notice. I believe it was because I complained about the Medicare overcharges. I did not have a contract, and they refused to give me any severance pay. What can I do?”

A: I am sorry to hear that you lost your job. Without a contract, you are regarded as an at-will employee. Employers are not obligated to provide severance pay to at-will employees. Yet, employers do not possess an absolute right to discharge employees, even at-will employees. Federal and state laws and policy considerations limit an employer’s right to discharge an employee.

Statutes prohibiting discrimination in workplace on the basis of gender, race, national origin, disability and other protected classes are examples of laws limiting an employer’s right to discharge employees. Likewise, if the termination of the employee violates a “fundamental principle of public policy,” the employee may bring a lawsuit for wrongful termination.

So, what constitutes a fundamental principle of public policy? Wrongful termination claims generally fall into four categories:

1. Refusal to violate the law or perform an illegal act.

2. Performing a statutory obligation or report.

3. Exercising a statutory right or privilege.

4. Reporting a violation of a statute of public importance to supervisors or the government (commonly referred to as “blowing the whistle”).

Your complaint to your supervisor about the Medicare overbilling meets the criteria of reporting a violation of a statute. The False Claims Act makes it a violation of federal law to defraud the government by knowingly presenting “a false or fraudulent claim for payment or approval.” Dating back to 1863, Congress enacted the False Claims Act to combat widespread fraud in Civil War defense contracts.

In your situation, the company could argue it did not knowingly defraud the government as no scheme was undertaken to falsely bill Medicare. The False Claims Act takes this in to account.

Deliberately concealing or avoiding an obligation to pay money to the government violates the False Claims Act. The term “obligation” includes “the retention of any overpayment.”

In addition, the Patient Protection and Affordable Care Act contains specific language on overpayments in the Medicare program. Any person or entity that receives an overpayment must report and return the overpayment within 60 days of identifying the overpayment. Knowingly failing to return an “identified” overpayment within 60 days constitutes a violation of the False Claims Act.

From the facts you have presented, I believe you have a strong claim for wrongful termination in violation of public policy. You also may have a claim under the California Labor Code, which prohibits an employer from retaliating against an employee who discloses information to the government or the employee’s supervisor that the employee has reasonable cause to believe constitutes a violation of state or federal law. The damages allowed for wrongful termination are not limited to the employee’s lost wages or salary. An employee can also recover damages for emotional distress and anxiety and punitive damages in cases of extreme wrongdoing.

Finally, you should consider bringing a False Claims Act action against the company. The False Claim Act allows whistleblowers to sue a wrongdoer on behalf of the U.S. government. If successful, whistleblowers are eligible to receive 15 to 30 percent of the amount that the government recovers. Ordinarily, the government’s recovery includes treble damages (the government’s losses are multiplied by three) plus penalties in the thousands of dollars per false claim.

Feel free to follow up by contacting my office or another trial lawyer experienced in handling both wrongful termination and whistleblower claims.

Christopher B. Dolan is owner of the Dolan Law Firm. Email questions to help@dolanlawfirm.com.

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