Recent Amendments to the Federal False Claims Act May Provide Whistleblowing Physicians with Greater Protection from Retaliatory Peer Review Proceedings by Michael J. Hamblin - ABA Health eSource December 2009 Volume 6 Number 4


	December 2009 Volume 6 Number 4

Recent Amendments to the Federal False Claims Act May Provide Whistleblowing Physicians with Greater Protection from Retaliatory Peer Review Proceedings
By Michael J. Hamblin, Frank, Haron, Weiner and Navarro, Troy, MI

Author The False Claims Act (FCA) ¹ is the federal government’s most effective fraud fighting tool. The Act allows a whistleblower to act as a private attorney general and pursue fraud claims on behalf of the government. The FCA covers fraud involving any contract or program that receives federal funds. Over the last 20 years, the federal government has recovered over $25 billion with the FCA. ²

Section 3730(h) of the FCA provides anti-retaliation protections to whistleblowers. ³ Until it was recently amended, Section 3730(h) provided anti-retaliation protection only to a defendant’s employees. ⁴ Under the recent Fraud Enforcement and Recovery Act of 2009 (FERA), these anti-retaliation protections were extended to include a defendant’s contractors and agents. ⁵

Extension of the FCA’s anti-retaliation protections to a defendant’s contractors and agents is of particular importance in the healthcare field, especially as it relates to the issue of whistleblowing activities of physicians who are members of the medical staff but are not employees of a hospital or other medical facility where they provide services. Previously, physicians who found themselves in this situation were almost universally denied the FCA’s anti-retaliation protections on the basis that they were not technically “employees” of the hospital or medical facility that was the subject of the FCA fraud claim. ⁶ Consequently, these physicians essentially found themselves without legal protection against retaliation for their whistleblowing activities, especially if the retaliation was instituted under the guise of the medical peer review process.

The medical peer review process dates back to the time of the ancient Greeks and is supposed to be used to provide an evaluation of a physician’s services by that physician’s professional colleagues in order to promote patient safety. ⁷ Currently, the American medical peer review process is prescribed and governed by a number of authorities, including the Joint Commission, the federal government with respect to Medicare-participating hospitals, and various state laws. ⁸ Unfortunately, the medical peer review process can be used to stifle dissent and impose punitive measures on physicians who seek to correct wrongs that they witness in the hospitals and medical facilities where they work. Many physicians have challenged these unfair uses of the medical peer review process; some successfully. However, courts give a great deal of deference to the conclusions reached during the medical peer review process, and a number of recent cases highlight the precarious position of non-employee physicians who are subjected to retaliation – in the form of a negative medical peer review proceeding – for whistleblowing activities.

For example, in Poliner v. Presbyterian Hospital of Dallas ⁹ , the 5 th Circuit Court of Appeals ruled against a physician and held that the Health Care Quality Improvement Act of 1986 (HCQIA) protected the defendants who subjected the physician to a negative peer review process, even if the reviewers had improper motives for initiating the peer review process. The Court ruled that because the peer review process must be reviewed from an objective basis, the “good or bad faith of the reviews is irrelevant” and, even further, that HCQIA “does not require that the professional review result in actual improvement of the quality of health care.” 1 ¹⁰ Similar results were reached in two recent California cases, Kibler v. Northern Inyo County Local Hosp. Dist. 1 ¹¹ and O’Meara v. Palomar-Pomerado Health Sys. 1 ¹²

Although none of these cases involved whistleblower physicians, they may represent a trend among courts across the country to provide broad immunity to entities and individuals that participate in negative medical peer reviews of physicians. Without the specific statutory protections provided by the recent amendments to the FCA, this broad immunity could be used to provide cover for negative peer review proceedings that are intended to retaliate against a whistleblowing non-employee physician. The newly enacted protections contained in the FERA amendments to Section 3730(h) of the FCA provide whistleblowing non-employee physicians with a much greater degree of legal protection against a peer review proceeding that is initiated in order to retaliate against them for their whistleblowing activity.

There have been some questions raised about the potential effectiveness of the FCA’s new anti-retaliation protections for contractors and agents due to the specific language contained in the amended anti-retaliation provisions. Specifically, certain language in the previous version of Section 3730(h) that spelled out, in detail, examples of protected activity was omitted from the amended Section 3730(h). 1 ¹³ However, this omission should not have any long term repercussions in terms of the anti-retaliation protections afforded to an FCA defendant’s contractors and agents. The intended scope of the new protections was to expand the categories of conduct and persons protected and not to eliminate any categories of protection that appeared in the previous version of the FCA. This intention is confirmed by the legislative history of the FERA amendment. 1 ¹⁴

Conclusion

While whistleblowing is not something that should ever be pursued in a cavalier or reckless manner by anyone, if a physician who is technically not an “employee” of a medical facility believes that doing so the correct course of action, the amended Section 3730(h) of the FCA should provide greater anti-retaliation protection to that physician, especially with respect to retaliatory medical peer review actions.

Author Biography

Michael J. Hamblin is an attorney with the law firm of Frank, Haron, Weiner and Navarro in Troy, Michigan. His practice encompasses a wide range of civil litigation and transaction matters. Contact him at (248) 952-0400 or mhamblin@fhwnlaw.com.

¹	31 U.S.C. §§ 3729-3733 (1986 and 2009 amendments).
²	Taxpayers Against Fraud Website, http://www.taf.org (last visited November 16, 2009).
³	31 U.S.C. § 3730(h).
⁴	Cornell University Law School, Legal In formation Institute, U.S. Code Collection, available at http://www.law.cornell.edu/uscode/html/uscode31/usc_sec_31_00003730----000-.html (last visited November 16, 2009).
⁵	Public Law 111-21, 123 STAT. 1616, available at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_public_laws&docid=f:publ021.111 (last visited November 16, 2009).
⁶	E.g., United States ex rel. Golden v. Ark. Game & Fish Comm’n. , 333 F.3d 867 (8 th Cir. 2003); United States ex rel. Siewick v. Jamieson Science & En’g., Inc., 322 F.3d 738 (D.C. Cir. 2003); Vessell v. DPS Assocs. of Charleston, Inc., 148 F.3d 407 (4 th Cir. 1998).
⁷	Terri D. Keville and Helen E. Ovsepyan, Protecting Peer Review to Protect Patients , AHLA Connections, July 2009, at 10. This article provides an extensive history of the American peer review process as well as a detailed discussion of the Poliner, Kibler and O’Meara cases.
⁸	Id.
⁹	Poliner v. Texas Health Sys. , 537 F.3d 368 (5 th Cir. 2008).
¹⁰	Id . at 378.
¹¹	39 Cal. 4th. 192 (2006).
¹²	143 P.3d 657 ( Cal. 2006).
¹³	Previously, § 3730(h) provided: “Any employee who is discharged, demoted, suspended . . . or in any other manner discriminated against in terms and conditions of employment by his or her employer because of lawful acts done by the employee in furtherance of an action under this section, including investigation for, initiation of, testimony for, or assistance in an action under this section, shall be entitled to all the relief necessary to make the employee whole. . . .” As amended in 2009, § 3730(h) provides: “Any employee, contractor, or agent shall be entitled to all relief necessary to make [that person] whole, if [that person] is discharged, demoted, suspended . . . or in any other manner discriminated against in terms and conditions of employment because of lawful acts done [by such person] or associated others in furtherance of other [sic] efforts to stop 1 or more violations [of the FCA].”
⁷	155 Cong. Rec. E1295-03, E1300 (2009). During the legislative process, Congressman Howard L. Berman stated the following: “ Section 3730(h) of the False Claims Act imposes liability on any employer who discriminates in the terms or conditions of employment against an employee because of the employee's lawful acts in furtherance of a qui tam action. This section needs to be amended so that it is clear that it covers the following types of retaliation that whistleblowers commonly have faced over the course of the last twenty years: (i) retaliation against not only those who actually file a qui tam action, but also against those who plan to file a qui tam that never gets filed, who blow the whistle internally or externally without the filing of a qui tam action, or who refuse to participate in the wrongdoing; (ii) retaliation against the family members and colleagues of those who have blown the whistle; and, (iii) retaliation against contractors and agents of the discriminating party who have been denied relief by some courts because they are not technically ‘employees.’ “To address the need to widen the scope of protected activity, Section 4(d) of S. 386 provides that Section 3730(h) protects all ”lawful acts done” . . . in furtherance of . . . other efforts to stop 1 or more violations” of the False Claims Act. This language is intended to make clear that this subsection protects not only steps taken in furtherance of a potential or actual qui tam action, but also steps taken to remedy the misconduct through methods such as internal reporting to a supervisor or company compliance department and refusals to participate in the misconduct that leads to the false claims, whether or not such steps are clearly in furtherance of a potential or actual qui tam action.”

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