On April 24, 2013, the Obama Administration announced a spectacular new “Senior Reward” program, which could spur many new additional Southern California Medicare fraud cases.
The so-called Senior Medicare Patrol would offer whistleblowers up to $10 million for exposing fraud. The whistleblower would get 15% of the recovered funds. This is a huge change to the current HHS model, which offers a 10% reward of up to $1,000. The revised program is modeled after an IRS program, which has helped that agency collect nearly $2 billion in fraud over the past 10 years.
Since 1997, the Senior Medicare Patrol has generated 7,000 plus referrals to the Office of the Inspector General and the CMS. In just the last three years alone, the Obama Administration has cracked down hard and managed to re-collect nearly $15 billion stolen from Medicare’s coffers. Kathleen Sebelius, the Secretary of Health and Human Services, stated the President’s intentions in clear language: “President Obama has made the elimination of fraud, waste and abuse, particularly in healthcare, a top priority for the administration.”
The big is question is: will this massive spike in incentive (from $1,000 to nearly $10 million!) make a big difference, in terms of generating better Southern California Medicare fraud cases and repairing the broken system?
It seems like it should, right? Isn’t it obvious that a reward of $10 million would attract a more vigorous response than a reward of $1,000?
Yes and no.
As motivation researcher, Dan Ariely, recently discussed in a very popular TED talk, the “stuff” that motivates human behavior (such as whistleblowing) is often highly counterintuitive. When a powerful purpose drives motivation, people often work extremely hard, often for free or for very little money. On the other hand, if a monetary incentive exists but the purpose behind the incentive is lacking, the cash reward may not motivate and may, in fact, DE-motivate.
Of course, most criminal cash rewards are tied into purposeful activity. For instance, when the FBI puts bounties on terrorists, people may be motivated to nab the terrorist not just for the money but also to fulfill a strong moral imperative (or purpose).
Similarly, when someone turns in IRS cheaters or people who’ve committed Los Angeles healthcare fraud, they will likely enjoy more than just a monetary reward — they’ll also get a feeling of serving a greater purpose (e.g. helping fix our skewed healthcare system).
Of course, as someone facing charges of healthcare fraud, credit card fraud, or other Southern California white collar crimes, you’re probably less concerned about the overarching utility (or lack thereof) of motivational schemes to inspire whistleblowers and more worried about what’s going to happen to you, your family, and your practice because of the charges against you.
Knowledge is power. The team here at the Kraut Law Group has the resources and track record to give you insights into your case and build a strong, ethical, and aggressive defense. Mr. Kraut is not exactly known as a “softie” on crime. In fact, he spent a substantial part of his career (14 plus years) as a hardnosed prosecutor for the city before becoming a criminal defense lawyer.