Companies engaged in wrongdoing hate whistleblowers. Since 1863, Congress has provided whistleblowers powerful incentives to report fraud and misconduct. The federal False Claims Act pays whistleblowers hundreds of millions of dollars each year for reporting fraud involving government funds or programs. It’s no wonder that some greedy corporations despise whistleblowers.
Congress recognized that not every company would welcome a whistleblower in its midst. That is why the False Claims Act – and many state laws – contain anti-retaliation and whistleblower protection provisions. Still, that doesn’t always stop some companies from retaliating.
If the goal of whistleblowers is to shine a light on corruption and greed, wrongdoers want to do everything possible to shut them down and discourage anyone else from coming forward.
Some companies try to discourage would-be whistleblowers with privacy policies that prohibit disclosure of company documents. Recently one such company, LifeWatch Services, tried to sue an employee who handed over confidential information to regulators. This week a federal judge in Chicago shut down that attempt and made it crystal clear that companies can’t use privacy policies to hide their wrongdoing.
Both the complaint and LifeWatch’s subsequent attack on the brave whistleblower are worth repeating.
LifeWatch, Medicare Fraud and the Use of Uncertified Offshore Technicians
The story begins with Matthew Cieszyski. Matt began working for LifeWatch in approximately 1993. LifeWatch performs remote monitoring of heart patients. Through technology and telemetry, patients can be monitored remotely 24 hours per day. Much like how home alarm companies can monitor fire and motions detectors in your home, LifeWatch uses technology to monitor a person’s heart.
According to Matt, many of LifeWatch’s patients have dangerous heart arrhythmias. Round the clock monitoring is often needed to help the patient’s doctor better understand and treat these conditions.
Many of LifeWatch’s patients are elderly and are insured by Medicare or Medicaid. That means tax dollars.
Our whistleblower – hero was employed by LifeWatch as certified technician. His extensive training and experience allow him to properly monitor and report abnormal heart problems. Generally, Medicare and Medicaid will only pay for licensed technicians – when such a license or certification is required and will only pay for services performed in the United States. Think of it this way, would you want an unlicensed dentist with questionable skills working on your teeth? Of course not. Medicare and Medicaid feel the same way.
When Matt first was employed by LifeWatch, he signed a confidentiality agreement that said in part, “You agree that both during your employment and thereafter you will not use for yourself or disclose to any other person not employed by the company any confidential information…” The agreement also said that he would not take or copy any company documents.
As time went on, Matt learned that much of the cardiac monitoring was being outsourced to “technicians” in India. He says that some of these technicians lack the necessary certification to perform the monitoring. The last straw for Matt was in 2012. He says that year a patient died because a technician in India failed to properly recognize and report the patient’s heart condition. That was also the same year that LifeWatch settled another whistleblower claim alleging a different type of Medicare fraud
In 2013 Matthew Cieszyski became a whistleblower.
Federal False Claims Act (“Qui Tam”) Whistleblower Lawsuit
The federal False Claims Act allows ordinary people with inside information about fraud involving government funds and programs to file a lawsuit on behalf of the government. Under the Act, successful whistleblowers can receive up to 30% of whatever the government collects from the wrongdoer. With triple damages and penalties of up to $11,000 per each false claim or bill, both damages and the subsequent awards can mount quickly.
Matt filed his case in 2013. He also filed state False Claims Act claims on behalf of Georgia, Iowa, Indiana, Minnesota, Texas and Oklahoma.
Whistleblower cases are filed under seal meaning they are secret while being investigated by the government. When the investigation was completed two years later, the case was unsealed. That is when Matt’s identity as the whistleblower became known.
Instead of trying to work with the Justice Department, fix the problem and resolve the Medicare fraud allegations, LifeWatch decided to take a different course of action. They sued Matt for breaching his confidentiality agreement!
Despite no evidence of harm, LifeWatch (in our humble opinion) elected to take the low road and bully Matt. Except Matt wouldn’t be bullied and wouldn’t voluntarily dismiss his fraud claims.
On May 9th, U.S. Magistrate Judge Sidney Shenkier sided with our whistleblower – hero and tossed LifeWatch’s ridiculous lawsuit. In dismissing its claims, the court said,
“It is unrealistic to impose on a relator the burden of knowing precisely how much information to provide the government when reporting a claim of fraud, with the penalty for providing what in hindsight the defendant views as more than was needed to be exposure to a claim for damages. Given the strong public policy encouraging persons to report claims of fraud on the government, more is required before subjecting relators to damages claims that could chill their willingness to report suspected fraud…
“Relator did not disclose the information to anyone other than the government and his attorney, did not disclose attorney-client information, and did not disclose trade secret information to Life Watch’s competitors. We hold that on these allegations, relator did not go so far that he has exposed himself to defendant’s breach of contract action. To allow a counterclaim based on the barest allegation that a relator took more documents than absolutely necessary would gut the strength and purpose of the public policy exception, which protects relators from retaliation by their employers for actions taken by relators while they are collecting information about a possible fraud, before they have put all of the pieces of the puzzle together.”
The takeaways from this case are simple. Courts are loath to enforce confidentiality agreements if enforcement means concerned employees can’t report wrongdoing.
There are some limits on what the whistleblower can do with the information but none of those are at issue in this case. Giving the documents to a third party or competitor may be problematic but that isn’t what Matt did. He only provided the information to investigators and his attorney.
The court also suggested problems could occur if a whistleblower takes information subject to the attorney – client privilege. Again, not an issue in this case and rarely ever an issue unless the whistleblower is also the wrongdoer’s lawyer.
In our opinion, Life Watch knew it didn’t have a leg to stand on. The only reason they sued Matt Cieszyski was to intimidate him and deter other would be whistleblowers. Thankfully the court saw through the ruse and dismissed LifeWatch’s lawsuit against him.
Medicare and Medicaid fraud cost taxpayers tens of billions of dollars annually. If Matt Cieszyski is correct, it may also have caused one patient to suffer and untimely death. Luckily there are other people like Matt in the healthcare profession. Whistleblowers are the primary line of defense against healthcare fraud.
Approximately 400 to 500 people become whistleblowers each year by filing lawsuits under the False Claims Act. In 2014, the Justice Department awarded whistleblowers $435 million. (Our whistleblower clients have received over $100 million.)
If you know of wrongdoing involving federal programs or dollars, give us a call. We have the experience, guts and proven track record to go after companies large and small. Many lawyers say they handle whistleblower cases but for most, it is a side practice. For us, it’s a mission.
For a no fee, no obligation consultation, contact attorney Brian Mahany directly at or by telephone at (414) 704-6731 (direct). All inquiries protected by the attorney – client privilege.
MahanyLaw – America’s Whistleblower Lawyers