Call me naive, but I think most whistleblowers report fraud because their sense of right and wrong has been assaulted, not because they may be rewarded financially. A common thread runs through the big corporate whistleblower cases of the last few years: the people who filed these fraud lawsuits and endured the long and arduous false-claims process had seen an injustice and were compelled to right it. Often they tried to report it through internal channels but were spurned, which only strengthened their resolve.
That seems to be the case with Cleveland Tyson and his six-year lawsuit against his former employer, Amerigroup.
A resident of suburban Chicago, the 62-year-old former government affairs director has been awarded $56.25 million, according to news reports. He helped federal and state prosecutors bring a civil action against the managed-care insurer for fraud, alleging the company refused to cover unhealthy people, as it was paid to do by the state. While the company admitted no wrongdoing, it agreed this week to pay $225 million to settle the lawsuit.
Tyson, who was fired by the company in 2002, never even inquired about what his cut of the settlement might be, according to lawyers in the case. “He wanted people to know that what he was saying was true,” his attorney said.
The federal false-claims remedy is a useful tool for uncovering insider fraud of the most egregious sort. Every time a huge award is announced, corporate managers and their employees are reminded of the consequences of fraudulent behavior and the rewards of reporting it.
But the process is long, tedious and sometimes unpredictable.
It would be great if the states could design a simpler false-claims act to focus on smaller cases involving fraud against both government and private insurers. In many cases of medical fraud by clinics, for example, there’s evidence that clinic employees knew of the wrongdoing, but didn’t have a motive or the wherewithal to report the fraud.
Perhaps a cut of treble damages might spur them to act.
Along with such a law, how about a requirement that every clinic employee be required to sign a fraud disclosure notice that affirms a duty to report suspected fraud and guarantees whistleblower protection? Every employer should also be required to give workers contact information for reporting suspected fraud.
These steps might help keep everyone a little more honest.
And, if this idea works, the requirement could be expanded to other medical providers, lawyers, body shops, insurance agencies, insurers and other workplaces where fraud is committed.