As the world witnessed with the emergence of Edward Snowden and his leaks about the National Security Agency’s surveillance tactics last year, whistleblowers can have long-lasting and far-reaching effects on industries. Whistleblowers can be responsible for the permanent damaging of brands and the upending of business practices. Recently, a case in the healthcare field in the U.S. has once again drawn attention to the importance of compliance, so that companies can avoid the ramifications of potential whistleblowing on their practices.
Medtronic Inc. — the world’s fourth-largest medical device company — has agreed to pay $10 million as a result of a whistleblower’s claim that the company offered illegal kickbacks to physicians to implant its pacemakers and defibrillators. The U.S. Department of Justice (DOJ) has been closely monitoring the healthcare industry, and the majority of recoveries in False Claims Act cases have related to healthcare. The case serves as a reminder that companies — particularly in healthcare — need to be diligent about maintaining compliance and policy-reviewing procedures. In an interview with InsideCounsel, Proskauer Special Labor & Employment Law Counsel Daniel Davis, a DC-based member of the management-side law firm’s Whistleblowing & Retaliation Group explained why the Medtronic case is one to pay attention to.
Because the case was resolved on settlement, it does not provide much information on what companies in healthcare should do to host more acceptable practices, Davis notes. But the case does serve as a hefty reminder to continue monitoring developments, update their compliance policies and procedures accordingly, and have good reporting programs. With more whistleblower legislation instituted nearly every year by Congress, companies need to update their practices.
Davis made mention of the fact that whistleblowers are using the False Claims Act much more frequently than they used to: “In recent years, the whistleblower landscape has undergone dramatic changes while the financial and reputational risks for employers across all sectors have risen substantially. Whistleblowers are also using the False Claims Act far more often than they used to. In 2008, there were less than 400 False Claims Act claims filed by whistleblowers. In 2013, that number had almost doubled to 752.”