The U.S. Department of Justice (DOJ) recently introduced its Corporate Whistleblower Awards Pilot Program (CWAPP), designed to supplement its existing criminal enforcement mechanisms to combat corporate crime. Under the CWAPP, whistleblowers can receive financial rewards in exchange for their submission to DOJ of original information about certain corporate crimes. CWAPP is designed to incentivize reporting criminal conduct that may otherwise go undetected or be difficult to prove and motivate corporations to implement more robust compliance programs that encourage internal reporting of complaints to detect and deter misconduct before it develops. The CWAPP went into effect on August 1, 2024, for an initial three-year term.
What Types of Healthcare Violations are Subject to the CWAPP?
The CWAPP applies to violations related to the following:
- Crimes involving private or other non-public healthcare benefit programs, where the overwhelming majority of claims are submitted to private or other non-public healthcare benefit programs.
- Fraud against patients, investors, and other non-governmental entities in the healthcare industry, where the overwhelming majority of the actual or intended loss was to patients, investors, and other non-governmental entities.
- Any other federal violations involving conduct related to healthcare not covered by the federal False Claims Act.
The CWAPP also applies to certain non-healthcare subject areas, including (1) violations by financial institutions and their agents (e.g., schemes involving money laundering); (2) violations related to certain foreign corruption and bribery (e.g., violations of the Foreign Corrupt Practices Act); and (3) violations related to the payment of bribes or kickbacks to domestic public officials.
What Are the Eligibility Requirements for Whistleblowers Reporting Under the CWAPP?
In addition to the subject matter areas discussed above, the CWAPP includes several guardrails to ensure a whistleblower’s submission qualifies for an award under the relatively narrow scope of the program.
- Original information. A whistleblower’s information may not be derived from publicly available sources or previously known by DOJ. Note that a whistleblower may report to DOJ information that they first reported to an entity’s internal legal or compliance program, where the entity later reported to DOJ the same information or the results of an investigation initiated in response to the whistleblower’s information, provided that the whistleblower also reports their information to DOJ within 120 days of reporting internally. DOJ will deem the date the whistleblower provided original information to the entity’s internal reporting structure as the date of the whistleblower’s original disclosure to DOJ.
- Voluntary. Reports must be made absent any request, inquiry or demand relating to the subject matter of the submission or any government investigation.
- Truthful and complete. A whistleblower must provide all information of which they have knowledge related to any misconduct, including misconduct in which they participated and the complete extent of their own role, if any.
- Cooperation. A whistleblower must cooperate with DOJ in its investigation, including providing truthful and complete testimony and evidence (e.g., in interviews, before a grand jury, or at any trial or other court proceeding); producing documents, records, and other evidence; and, if requested, working proactively and in compliance with law enforcement officers and agents.
- Leading to forfeiture. The submission must lead to the successful forfeiture of at least $1 million by DOJ in connection with a prosecution, corporate criminal resolution, or civil forfeiture action related to corporate criminal conduct.
What Awards Will the DOJ Grant to Whistleblowers?
Whistleblowers who provide original information that leads to asset forfeiture exceeding $1 million may be eligible to receive an award based on a percentage of the total assets forfeited. For example, an award may be up to 30% of the first $100 million in net proceeds forfeited and 5% of any net proceeds forfeited between $100 million and $500 million. No awards will be granted based on net proceeds above $500 million. Although awards are entirely discretionary, DOJ will consider the following factors in assessing the extent of an award:
- The significance of the information provided. DOJ will take into account the significance of the information to the success of DOJ’s prosecution and the degree to which the information supports any successful criminal actions and related forfeiture actions by DOJ.
- The assistance (or culpability) of the whistleblower. DOJ will consider the whistleblower’s efforts to timely remediate harms and support any proceedings, as well as the whistleblower’s meaningful participation in any criminal activity.
- Participation in internal reporting programs. DOJ may consider increasing a whistleblower’s award to the extent the whistleblower participated in internal compliance systems.
- Unreasonable delay. DOJ will assess whether the whistleblower unreasonably delayed in reporting the criminal violations.
- Interference with internal compliance and reporting systems. In cases where the whistleblower interacted with his or her entity’s internal compliance or reporting system, DOJ will assess whether the whistleblower undermined the integrity of such system.
- Management role(s). DOJ will assess whether the whistleblower held a management role over the personnel or offices involved in the misconduct, including a role as corporate executive and the whistleblower’s actions in that role. DOJ may use this consideration to deny an award.
Practical Tips for Providers
In the wake of the CWAPP’s launch, healthcare entities may take the opportunity to review their corporate compliance programs to ensure the programs are consistent with recent updated government guidance. For example, healthcare entities should ensure they have effective internal reporting mechanisms and educate all employees on how to make a report. If issues were identified, proactively addressing potential violations and implementing corrective action may mitigate the risk of a potential enforcement action.
If you have any questions regarding the CWAPP, please contact the authors.