Time to Cap Qui Tam Whistleblower Awards?

Washington, DCWhile the world continues to marvel at the $96 million payout to the Qui Tam Whistleblower who called out GlaxoSmithKline on bad manufacturing practices, there remains hundreds of qui tam False Claims Act (FCA) cases under the microscope—with the vast majority related to alleged fraud against Medicare and Medicaid.

Inside Health Reform reported on February 2 that a join communiqué co-authored by the Department of Justice to the attention of Republican Senator Chuck Grassley identified a total of 885 cases pending as of January 4 of this year. These are actions filed on behalf of the federal government by persons and individuals not associated with the government filing claims alleging fraud against the government.

Under the False Claims Act, a successful qui tam lawsuit can net the whistleblower bringing the claim up to a quarter of the value of funds recovered as the result of alleged fraud.

"The federal False Claims Act remains one of the most important statutes for fraud recovery utilized by the federal government, Grassley said January 26 during a full judiciary committee hearing on fraud. "Since 1986 when it was amended, the False Claims Act has recovered over $28 billion and it has prevented countless billions of fraud that others would have attempted," he continued. "The False Claims Act's qui tam whistleblower provisions have been among the most successful elements of the Act."

However, there are those who feel the awards have gotten out of hand, to the point where a cap on the awards paid to government whistleblowers is long overdue.

Case in point is the case of Cheryl Eckard, who states she was simply following her moral compass when she blew the whistle on her former employer GlaxoSmithKline. As a qui tam government whistleblower, she would have known she would be in for a share of the eventual award, whatever that may be. When the fine was announced last October—$750 million—the share for Eckard was "at least" $96 million, according to the The Wall Street Journal.

Critics contend that when the False Claims Act was established in 1986 to provide up to 25 percent of any monetary recoveries, no one envisioned the kinds of handsome paydays now routinely seen.

It has been estimated that from 14 settlements over the past two years, entitlements to federal whistleblowers have combined to $650 million.

The New England Journal of Medicine (NEJM), in a special report published last year, noted that of 26 whistleblowers who called out pharmaceutical giants, none claimed they were motivated by money. Rather, they were driven by integrity, altruism or concerns for public safety and the pursuit of justice. The smallest whistleblowing government award amongst those interviewed was $100,000. The largest: $42 million. But that was prior to the $96 million award to Cheryl Eckard in late 2010.