How California and Illinois Help Whistleblowers Fight Fraud

(This post was written by whistleblower attorney Juan Martinez.)

California and Illinois have enacted unique state laws, modeled after the federal False Claims Act, that help whistleblowers stop fraud against private insurers and reward them for doing so with a share of the funds recovered.  

The California Insurance Frauds Prevention Act and the Illinois Claims Fraud Prevention Act (“Fraud Prevention Acts”) are designed to combat fraud—particularly concerning health, automotive, and worker’s compensation insurance—committed against insurers by individuals, organizations, and companies. They cover a wide range of misconduct, including upcoded health insurance claims, kickback schemes, and false workers-compensation claims.

Examples of insurance fraud covered by the Fraud Prevention Acts include:

  • Fraudulent billing or overbilling of health insurance companies by hospitals and medical specialists.
  • Billing health insurance companies for a treatment performed by a person that is not licensed.
  • Submitting multiple insurance claims for the same service rendered.
  • Employing “runners, steerers, or cappers” to recruit patients or clients.
  • Paying cash inducements or other kickbacks in order to obtain health insurance benefits.

The Fraud Prevention Acts were enacted to protect the public from harm caused by large insurance fraud, such as increased premiums. This is crucial since there are far more people insured by private insurers than people insured by the government. According to the Centers for Disease Control and Prevention, of adults under the age of 65 who have some form of healthcare insurance, 25% have government insurance, and 65% have private insurance.

What Do Whistleblowers Get in Return?

Whistleblowers and their attorneys help state investigators by bringing additional knowledge and resources to complex fraud cases.

Contributions from brave whistleblowers can be instrumental in fighting fraud. Recently in California, the Insurance Commissioner reached a $30 million settlement with pharmaceutical giant Bristol-Myers Squibb over allegations of drug marketing fraud and physician kickbacks. The settlement stems from charges in a whistleblower lawsuit filed by three former Bristol-Myers Squibb sales representatives.

In return for their help, whistleblowers are compensated. Rewards under the state Fraud Prevention Acts are much higher than their federal counterpart.

Whistleblowers that bring the action are rewarded with at least 30% of the recovery in cases where government intervenes, and at least 40% of the recovery in cases that the government declines to intervene but is continued by the whistleblower’s counsel.

Whistleblowers that bring the action are rewarded with at least 30% of the recovery in cases where government intervenes, and at least 40% of the recovery in cases that the government declines to intervene but is continued by the whistleblower’s counsel. Furthermore, a whistleblower can still receive up to 10% of the government’s recovery if the whistleblower’s case is based primarily on information that was already publicly available from legislative or administrative reports, news articles, or public hearings.

In addition to whistleblower rewards, the Fraud Prevention Acts provide robust whistleblower retaliation provisions that allow a whistleblower to be made whole, including reinstatement and back pay, should he or she be demoted, harassed, or otherwise retaliated against for bringing a whistleblower case under the Fraud Prevention Acts.

If you live in California or Illinois, or have knowledge of possible private insurance fraud in those states, contact us confidentially today. Our team of qui tam attorneys and expert investigators will review your claim free of charge and help you explore your eligibility for a whistleblower lawsuit.