By: Christopher A. Parrella, Esq., CPC, CHC, CPCO Parrella Health Law, Boston, Ma. A Health Law Defense and Compliance Firm

On August 1, 2024, the Department of Justice (DOJ) launched the Corporate Whistleblower Awards Pilot Program, a significant initiative designed to incentivize whistleblowers to come forward with information about corporate misconduct. The program, managed by the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS), marks a new chapter in the DOJ’s ongoing effort to promote a culture of compliance within corporations while targeting some of the most pressing areas of corporate crime.

This three-year pilot program is an extension of the DOJ’s “policy sprint” initiative that began earlier in 2024. The aim is to align whistleblower incentives with the DOJ’s voluntary self-disclosure programs, creating a powerful incentive for both companies and individuals to report misconduct as soon as it’s identified.

Key Focus: Whistleblowers

The Pilot Program is structured to address specific corporate crimes that have traditionally been underreported and often escape existing whistleblower frameworks. Whistleblowers can provide information in the following areas:

• Foreign Corruption and Bribery: Including violations of the Foreign Corrupt Practices Act (FCPA) and other anti-bribery statutes.
• Financial Institution Crimes: Covering schemes related to money laundering and fraud involving financial regulators.
• Domestic Corruption: Involving bribery of government officials and similar activities.
• Healthcare Fraud: Specifically targeting fraud involving private insurers, an expansion of the traditional focus on federal healthcare programs.

Eligibility Criteria and Award Considerations

To be eligible, the whistleblower’s information must be original, voluntarily submitted, and truthful. Notably, the Pilot Program bars participation from individuals who had a meaningful role in the misconduct, unless their involvement was minimal and they were among the least culpable parties.

The DOJ also considers several factors when determining the size of an award, such as:

• The significance of the information provided.
• The degree of assistance offered by the whistleblower.
• The whistleblower’s role within the organization, including any delay in reporting the misconduct.

Implications for Healthcare Providers

One of the most notable aspects of the program is its focus on healthcare fraud involving private insurers. This represents a significant expansion of whistleblower risks for healthcare companies that traditionally dealt only with federal programs like Medicare and Medicaid. With the introduction of this program, private insurers are now firmly in the crosshairs, creating new compliance challenges and emphasizing the need for robust internal reporting systems.

Preparing for Increased Whistleblower Activity

The tight timeframes and the possibility of reduced cooperation credit due to confidentiality agreements make it imperative for organizations to revisit their compliance protocols. Companies should ensure their employment agreements, codes of conduct, and internal reporting mechanisms are aligned with whistleblower protections to avoid allegations of obstruction.

Further, organizations should be prepared to launch internal investigations immediately upon receiving complaints. The 120-day window for self-reporting to qualify for declinations under DOJ’s Corporate Enforcement and Voluntary Self-Disclosure Policy is narrow, placing significant pressure on companies to act swiftly.

Take Action: Strengthening Compliance and Protecting Your Organization

The Corporate Whistleblower Awards Pilot Program signals a new era in corporate enforcement, one where proactive compliance and swift internal reporting are essential. If your organization operates in healthcare, finance, or any industry vulnerable to these risks, now is the time to assess and strengthen your compliance framework.

For further guidance on how this program could impact your business or to review your compliance policies, contact Parrella Health Law at 857-328-0382 or email Chris directly at cparrella@parrellahealthlaw.com. Our team is here to help you navigate these complex regulatory changes and protect your organization from legal exposure.