Texas

What is the Texas Whistleblower Act?

The primary law in force in Texas that outlines protections for whistleblowers is the Texas Whistleblower Act. This law is encoded in Texas Government Code, Chapter 5, Section 554.002, which explains that any public employees who report in good faith an employer’s violation of the law to the appropriate authorities are protected.

In other words, a public employee who reports an organization’s wrongdoing by following the proper procedures is protected under the law and should remain free from retaliation or other consequences. Public employees include any individual who is currently working for their local government or for a Texas state government agency. While that might seem like a small pool, this includes all types of employees that work for the government like bus drivers, law enforcement officers, bus drivers, and even employees of state educational institutions.

So, what types of fraud or wrongdoing can get reported under this law? Here are just a few forms of wrongdoing that fall under the scope of the Texas Whistleblower Act:

• Environmental protection violations
• Securities, commodities, and banking fraud
• Shareholder fraud
• Mail fraud
• Healthcare fraud
• Tax or IRS fraud
• Procurement fraud

If you have knowledge of workplace practices that hurt the Texas state or local governments, it is up to you whether to pursue action or a claim against that organization. Keep in mind that staying silent also comes with consequences. If you participate in the fraudulent activity without reporting it, then there is a possibility that someone else could report it, and you could be found guilty of participating in fraud. Individuals can be prosecuted and even imprisoned for willingly participating in fraud within their organizations.

Keep in mind that you do not have to know the specific laws that were violated if you want to seek out a whistleblower claim. An experienced qui tam lawyer can help you better understand your rights and the steps to building a potential case.

Protections under the Texas Whistleblower Act

The typical whistleblower’s journey is complex, and it makes sense for the whistleblower to be concerned about speaking out about the wrongdoing. After all, the whistleblower is likely working alongside the individuals committing the fraud. It takes bravery to speak out, but the good news is that the Texas Whistleblower Act also outlines specific protections afforded to those individuals. According to the law, whistleblowers who act in good faith and report the wrongdoing to the proper authorities are afforded freedom from retaliation from their employer. Here are a few employer actions that you are protected from if you become a whistleblower:

• Termination from your position
• Suspension from your job
• Reducing or withholding pay
• Removal of job benefits
• Harassment of the whistleblower
• Any other adverse action that jeopardizes the whistleblower

If you blow the whistle following all the appropriate steps under the law, then you could be eligible to receive compensation for any retaliatory act committed by your employer against you. For instance, you might be awarded injunctive relief in the form of back-pay wages if you were suspended from work for a period of time.

Texas Medicaid Fraud Prevention Act

The second law regarding whistleblowing in Texas is the Texas Medicaid Fraud Prevention Act. This law is much like the federal False Claims Act, but the law in Texas go even further to protect whistleblowers who report fraud.

For instance, there is no statute of limitations or time limit for a whistleblower to seek out qui tam actions under this act. Further, these qui tam claims will remain sealed for up to 180 days compared to the 60-day limit under the federal act. Finally, the law in Texas provides for an additional penalty of up to $15,000 for any wrongdoing action that results in the injury of a citizen in a protected class (the elderly, disabled, or a minor).

Examples of Medicaid Fraud

Medicaid and healthcare fraud come in many forms. Here are a few common examples of this type of wrongdoing:

• Phantom billing: Charging for services not rendered
• Double billing: Billing twice for the same service
• Unbundling services to charge more
• Upcoding: Billing for a more expensive service than rendered
• Identity theft or swapping
• Bogus marketing: Taking people’s Medicare or Medicaid number and using it for fraudulent reasons
• Forgery
• Misrepresenting the dates of service
• Misrepresenting the provider of services
• Unfairly waiving deductibles or co-payments for patients
• Improperly diagnosing a patient
• Rendering services not medically necessary
• Corruption (kickbacks and bribery schemes)
• Prescribing medications that are not medically beneficial
• Overutilization of services (unnecessary testing, frequent checkups, etc.)

One well-known case of Medicaid Fraud in Texas happened back in 2017 when a home health agency owner plead guilty to conspiring to commit Medicaid fraud in a $17 million scheme. The owner admitted to obtaining patients for his home health agencies by paying illegal kickback payments to patient recruiters. Then, they would pay the Medicare and Medicaid patients for receiving services in exchange for the ability to use their Medicaid and Medicare numbers to bill the programs for services. The money received from each claim the owner made to Medicaid was then used to pay illegal kickbacks to obtain new patients.

How Texas Whistleblowers Benefit from Speaking Up

Among the most common whistleblower FAQs is – how will a whistleblower benefit from speaking up about a wrongdoing? Are there any other benefits to reporting the fraud other than being absolved from any criminal or civil liability regarding the fraudulent action?

In short, the answer is ‘yes.’ Not only will the whistleblower enjoy a clear conscience, but they might also be able to financially benefit from any claim that later leads to a successful qui tam lawsuit.

Eligible whistleblowers might be eligible to get about 15-25% of the overall settlement amount in a successful claim. If the state opts not to intervene with the claim and the whistleblower continues to pursue the claim, then that individual can get up to 30% of the settlement amount if successful.

If no claim is filed but the whistleblowing action results in a future administrative penalty, then the whistleblower can receive up to 5% of that penalty amount.

National Qui Tam Lawyers Representing Texas Whistleblowers

When you have witnessed a fraudulent wrongdoing in your organization, it can be intimidating to speak out. For one thing, the individuals committing the wrongdoing are likely your co-workers, managers, or even the CEOs of your organization. For another, you likely are not even sure what your legal options are or how to go about reporting the wrongdoing. Considering the power and knowledge imbalance, it makes sense to hire a legal representative to ensure that your back is covered.

Here at Tycko & Zavareei LLP, our legal team has extensive experience fighting all types of fraud in Texas. If you feel compelled to speak with an attorney, then our office can help. Schedule a confidential case evaluation now to find out more about your legal rights and options moving forward.