Blog

 

severance pay when resigning halunenlaw.comYou’ve found a better opportunity. You want to take your career in a different direction. You just can’t take it anymore and need to get out ASAP.

These are a few of the many reasons people resign from their jobs, even if they don’t have a new one lined up. If you’re considering leaving your employer, you’ve likely put a lot of thought into your decision. But while you may have a good handle on why you’re resigning, you may not have given equal consideration to how you’ll do so.

That can be a costly mistake. Resigning abruptly, without an exit strategy and without speaking with an employment lawyer, could deprive you of the chance to leave with significant severance benefits. Storming out or giving notice may feel great in the short term, but the long-term implications to your finances, reputation and future opportunities may not be so exhilarating.

That’s why having a thoughtful, strategic plan for your departure is a critical prerequisite to any planned resignation.

Before breaking the news to your employer that you’re moving on, consider taking the following steps:

Think About What You Want

When you leave, what do you want to take with you other than a box of personal items from your desk? This is a particularly important question if you don’t have a job waiting for you upon your departure.

Answer these questions:

    • Do you want severance pay or the continuation of benefits and, if so, how much, for how long and in what form (e.g., a lump sum or payments over time)?
    • What are you willing to give your employer in return for a severance package? Are you prepared to forfeit any claims you may have against your employer or agree to restrictions on future employment opportunities?
    • How much does it matter to you to leave on good terms? Do you care about burning bridges or is it important that there be no hard feelings
    • Would you like to agree with your employer regarding the messaging – to colleagues, customers, and prospective employers – surrounding your departure?

Understand What You May Be Entitled To

Unless your employment contract, collective bargaining agreement, or company policy says otherwise, or your employer wrongfully terminated you for legally prohibited reasons, your employer owes you nothing when you resign. Beyond legally required items such as COBRA health insurance coverage, earned sick days, or vacation time, the organization doesn’t have to pay you weeks or months of severance pay, unearned benefits, or any other consideration.

Accordingly, if you have an employment contract, look at the terms carefully. It may provide for severance upon your departure and include conditions for receiving it, such as a specified notice period or only if you leave for certain reasons. If you received an employee handbook, review any provisions regarding the employee exit process and benefits available after separation.

If no documents or official policies provide for severance, that doesn’t mean your employer hasn’t agreed to severance packages with other employees or won’t offer you one. Even if you’re resigning, you may have more leverage to negotiate a severance agreement than you realize.

Don’t Do Anything Without Consulting An Experienced Attorney

Leaving a job is as important a career move as starting one. For C-suite executives and other high-level employees, in particular, the start and end of an employment relationship are unique opportunities to negotiate the best possible terms and maximize your compensation and benefits.

But doing so requires a full understanding of your rights and options as well as the implications of how, why, and when you resign. If you announce your departure without first consulting a lawyer, you risk forfeiting your chance to negotiate a robust severance package. Your attorney can help you develop and implement a resignation strategy that puts you in the best possible position as you move on to better things.

If you feel you’ve experienced illegal action in your workplace, we encourage you to submit a Case Review Form to our firm. One of our attorneys will review your information, and you’ll receive a response from our firm in a timely manner. There is no charge for this confidential process. And, if we take your case, as a contingency-based law firm, there is no cost unless we win.

We’re here to help you navigate your lawful rights and ensure you get the treatment you deserve. Together, we can hold employers accountable and create a fairer workplace for everyone.

Image Credit: Indypendenz / Shutterstock

stock-options-bonuses-in-severance-packages-halunenlaw.comFor many people, the icing is the best part of the cake. For many C-suite and high-level executives, the “icing” on their compensation packages – such as stock options, restricted share units (“RSUs”), bonuses and other nontraditional or speculative compensation structures – are often worth much more than the cake of their annual salary.

Accordingly, if you find yourself involuntarily parting ways with your employer, these non-salary forms of remuneration should be critical parts of severance negotiations. Failing to understand your rights or focus attention on vested or nonvested stock options, bonuses and similar forms of compensation in a severance package can be a costly mistake. That’s one of the many reasons you should consult an experienced employment attorney before signing a proposed severance agreement.

Incentive Stock Options

A stock option is the right to buy your company’s stock. It’s a common part of executive compensation packages, with those options vesting after having met certain milestones, or performance targets, or at a time noted in your employment agreement. Once vested, you can exercise your option by purchasing shares in the company at a specified “exercise price,” which is usually lower than market value.

If your termination or separation happens while you’re sitting on vested stock options you have yet to exercise, you shouldn’t lose your right to do so. Most companies, however, limit how long you can purchase the stock after your separation date. Employers typically put a relatively short deadline to exercise options, though you and your lawyer can negotiate the time as part of your severance discussions. If you don’t exercise your options within the required time, they’ll expire, and you’ll no longer have the right to buy the company stock.

Make sure you and your attorney discuss whether you want to exercise your stock options and, if so, whether you’ll need additional time to assemble the funds required to purchase your shares.

Restricted Share Units

Unlike stock options, which only give you the right to purchase shares upon vesting, restricted share units are equity interests actually granted to you when vested. In many executive employment agreements, RSUs vest over time, with a percentage of those units vesting annually, quarterly or monthly.

At the time of your separation, another vesting of RSUs may be imminent. The value of those units may be substantial, and unless you and your employer agree on the fate of these unvested units – such as granting you a pro rata share for the current vesting period – you’re likely to lose them.

Additionally, if your termination comes conspicuously close to your next vesting date, it may raise questions about whether or not your employer was acting improperly or in bad faith when terminating you. As a result, any potential claims you may have against your employer can be powerful leverage you and your attorney can use in your severance negotiations.

Earned Bonuses

Performance or incentive bonuses are the direct result of your hard work, and if you have accomplished the goals or reached the targets to earn those bonuses, you shouldn’t forfeit them upon termination. If you earned bonuses your employer hasn’t paid, make sure you don’t leave them on the table.

While you may have had no say about your termination, you have plenty to say about the terms of your severance package. An experienced employment attorney can help you understand your rights and options, develop and implement an effective negotiation strategy, and ensure that you leave with the maximum amount of compensation and benefits available.

If you feel you’ve experienced illegal action in your workplace, we encourage you to submit a Case Review Form to our firm. One of our attorneys will review your information, and you’ll receive a response from our firm in a timely manner. There is no charge for this confidential process. And, if we take your case, as a contingency-based law firm, there is no cost unless we win.

We’re here to help you navigate your lawful rights and ensure you get the treatment you deserve. Together, we can hold employers accountable and create a fairer workplace for everyone.

Image Credit: ijeab / Getty Images

laid off over 40 severance agreement rights halunenlaw.com

Older workers’ experience, insights, and institutional knowledge can be valuable assets to a business. All too often, however, companies see older workers as a liability, leaving more seasoned employees vulnerable to prohibited age discrimination, including wrongful termination. That’s why federal law provides older workers, who are laid off over 40, with robust protections, rights, and remedies in the event of layoffs, downsizings, or firings.

If you’re over 40 and receive a pink slip and proposed severance agreement, it’s critical that you understand your rights and what the requirements are under the federal Older Workers Benefit Protection Act (OWBPA).

Most Older Workers Have Seen or Experienced Age Discrimination

In a culture that often venerates youth over experience, workplace age discrimination is an unfortunate and common occurrence. Approximately 453,000 American workers filed age discrimination claims with the Equal Employment Opportunity Commission between 1997 and 2020, while about one in five workers over 40 and one in four workers over age 60 believe they have experienced age discrimination in the workplace, according to a Senior Living survey.

Wrong and illegal as age discrimination is, employers may decide to flaunt the law and terminate older employers anyway. Rapidly changing technologies and a hypercompetitive landscape can create the perception that youth gives businesses a competitive advantage. And to create a subterfuge for making decisions based on age, a company may mask its illegal motive by claiming a need to “reorganize,” “downsize,” or implement a “reduction in force” (RIF). Even if a claimed reorganization is real, many companies use this excuse to illegally jettison older employees, including managers and those in the C-Suite.

But rare is the company that will admit it’s terminating an employee because of age. Such firings usually come under other pretenses — often using common “code words” like “reorganization”, “position elimination”, “reduction in force” (RIF), and “moving in a different direction”— and those let go may not realize the real reason behind the layoffs is about making room for younger employees. Then, to minimize the risk of future litigation, many employers offer severance packages to departing employees and executives. These packages are offered in exchange for a release or waiver of any employment-related claims, including age discrimination, and in hopes that employees will sign the severance agreement without considering whether their termination is the result of age discrimination.

Legal Help With Your Proposed Severance Agreement

We have employment lawyers who are Older Workers Benefit Protection Act experts ready to meet with you for a free, confidential consultation.Want to make sure your employer has followed the law and that you are not leaving potential claims on the table? Contact us today.

Severance Requirements for Older Workers Under the OWBPA

Recognizing that employers were pressuring older workers to sign waivers without having adequate information or time to evaluate their situations, Congress passed the OWBPA into law in 1990 as an amendment to the Age Discrimination in Employment Act of 1967 (ADEA). The OWBPA applies to workers age 40 and over at companies with at least 20 employees. It addresses age discrimination in several ways, including requiring employers to follow specific procedures when asking employees to waive claims under the ADEA as part of severance agreements. The purpose is to ensure the release or waiver is knowing and voluntary. If an employer doesn’t follow these requirements, any waiver that employees signed may be void and unenforceable.

For employers covered by the OWBPA, a valid waiver of claims for any employee age 40 and over must meet certain requirements to ensure the employee has an adequate understanding of what rights and claims they are waiving and sufficient time to gain that understanding. Specifically:

    • The employer must not use undue pressure to get the worker to sign a waiver of the individual’s rights;
    • The proposed waiver must be succinct, accurate, and reasonably understandable to an ordinary person;
    • Any release of claims must be in writing;
    • The waiver must explicitly state that the employee is releasing their claims under the ADEA;
    • The employer must encourage the employee to consult with an attorney before signing the agreement; and
    • The employer must give the employee up to 21 days to consider the severance offer (or 45 days if the termination is part of a layoff of more than one employee). Upon signing, the employee has seven days to revoke their signature.

In addition to the above, an employer claiming to implement a reduction in force, defined as a termination of two or more employees, must also provide the terminated employee with the following information:

    • The job titles and ages of any other workers in the employee’s unit or department who are also being laid off;
    • The job titles and ages of all other workers in the employee’s unit or department who are being retained, that is, who are not being laid off; and
    • The eligibility factors used to determine who was laid off and who was retained.

The purpose of this requirement is to provide the employee with information they can use to evaluate whether older employees have been targeted for termination, whether a particular employee has been targeted, or whether the RIF appears to be implemented fairly. In this situation, the advice of an experienced employment attorney is particularly important because they can help employees analyze the information provided and decide whether to pursue legal action against the employer or accept the severance and agree to the waiver.

Leverage Our Legal Expertise to Help Shape Your Future

If you feel you’ve experienced illegal action in your workplace, we encourage you to submit a Case Review Form to our firm. One of our attorneys will review your information, and you’ll receive a response from our firm in a timely manner. There is no charge for this confidential process. And, if we take your case, as a contingency-based law firm, there is no cost unless we win.

We’re here to help you navigate your lawful rights and ensure you get the treatment you deserve. Together, we can hold employers accountable and create a fairer workplace for everyone.

Image Credit: dragana991  / Getty Images

employee layoffs downsizing outsourcing halunenlaw.comWith no end in sight to the global pandemic, many companies and especially large corporations are preparing for the new workplace to take hold and are rethinking the way they do business. Some of the changes are welcomed by the employees, for example, a flexible schedule, the ability to work from home, less travel, and a limited commute. But unfortunately, big corporations are rethinking the way they do business by initiating drastic restructuring of its personnel.

Since the start of the global pandemic, many large corporations have drastically restructured their day-to-day business as well as the personnel. And although some of the companies are undergoing cost-cutting initiatives as a result of a business downturn, most large corporations, especially those that have benefited from the pandemic and significantly increased their revenues,[1] are now finding more ways to save money, often at the expense of their employees’ jobs.

You may have heard of Vishal Garg, the CEO of a mortgage company Better.com, who laid off 900 employees over a Zoom call. Or the P&O Ferries Executive who announced via Zoom that the company planned on replacing 800 employees with cheaper agency workers. On its face, it may seem that the company is making a business decision and there is nothing you can do about losing your job if you are laid off in this manner. But, it is crucial to remember, that these “legitimate business reasons” for firing employees often mask the wrongful terminations of employees of marginalized identities and troublemakers/whistleblowers.

When you find yourself in a situation where your employer implements significant layoffs, what can you do to ensure that your rights are protected? Here are some questions to consider:

    • Is it possible that you were laid off while other employees of a different race, gender, religion, age, or disability status got to keep their jobs?
    • Have you recently filed for or received workers’ compensation, or protections under the Family Medical Leave Act (FMLA) or requested a reasonable accommodation due to a disability?
    • Have you recently reported any violations of law to your employer?
    • Have you recently reported discrimination in the workplace, even if the discrimination was not directed at you?
    • Are you a member of a Union and was the Union Agreement followed per layoff terms?
    • Do you have a contract that provides for the terms of your layoff or that allows for-cause terminations only?
    • Are you over 40? Did your employer provide you with all the necessary documents per the Older Workers Benefit Protection Act (OWBPA)? See Laid Off Over 40? You Have Unique Rights.

Being laid off is extremely stressful. The experienced and skilled attorneys at Halunen Law stand at the ready and are committed to advising employees about their rights and helping you decide what to do. To consult with an attorney about your rights, please contact us today.

Halunen Law’s employment law group is a team of tenacious attorneys dedicated to ensuring employee rights and protections. If you’ve been wrongfully terminated, have faced discrimination, sexual assault, or harassment, or have been retaliated against for reporting illegal workplace activity, contact our office today. We’ll assess your case and determine your best path toward seeking justice. We represent clients on a contingency basis, so there is no cost unless we win.

Sources:
[1]  https://www.bloomberg.com/news/articles/2022-03-30/2021-was-best-year-for-u-s-corporation-profits-since-1950

Image Credit: Faizal Ramli  / Shutterstock

 

pressure points executives use negotiating severance package

In any negotiation, each party comes to the process with unique pressure points. As the name implies, pressure points are those factors and considerations that put pressure on a party to close a deal and, accordingly, make them more open to compromise.

Executives who enter into severance negotiations with their soon-to-be-former employers often think they have no leverage or cards to play when seeking a better package, recognizing that, in most cases, employers aren’t legally obligated to offer them anything. But the truth is that their employers likely have several pressure points that departing executives can identify and exploit to obtain more generous terms, greater compensation, and better benefits in their severance packages.

Here are three pressure points for employers that executives should consider when they (and more specifically, their attorneys) evaluate and respond to a proposed severance agreement:

1. Fear of Future Claims

No business wants the uncertainty, disruption, and potential financial or reputational damage that are byproducts of employment litigation. Employer misconduct claims cost American businesses $20.2 billion in 2021, according to a Vault Platform study. That’s why companies attempt to insulate themselves against claims for harassment, discrimination, whistleblower retaliation and wrongful termination.

In exchange for offering a departing executive severance pay and benefits a company isn’t legally obligated to provide, the business will expect the employee to waive and relinquish any future legal claims against the employer. Definitively shutting down the threat of such litigation is worth money to the employer. If the employer worries that the executive may have viable claims, paying for an insurance policy against legal action instead of paying lawyers and a potential judgment or settlement is a bargain.

Many executives, however, may not be aware that they have potential employment-related claims. When a company makes an employment decision for legally prohibited reasons, there’s usually a pretense. That pretense may not be readily apparent. That’s why it’s critical to consult an employment attorney before signing a severance agreement. Even the possibility that an executive may have a claim can up the ante for the employer and lead to a sweeter deal.

2. Fear of Future Competition

Similarly, a company may use a severance agreement as a way to limit the executive’s competitive activities after the executive leaves. Executives must tread with caution if presented with such provisions. Noncompetition and nonsolicitation clauses in a severance agreement are valuable promises to the employer, but can severely restrict the executive’s ability to pursue new opportunities if they’re too broad and restrictive.

3. Fear of Bad-mouthing

Departing and disgruntled executives may not have the nicest things to say about their companies or colleagues. Even without a lawsuit or claim, word of a company’s allegedly toxic or problematic work environment or practices can spread quickly among employees and job candidates. Companies are often happy to offer more severance in exchange for a non-disparagement provision that can keep both sides from bad-mouthing the other.

If you feel you’ve experienced illegal action in your workplace, we encourage you to submit a Case Review Form to our firm. One of our attorneys will review your information, and you’ll receive a response from our firm in a timely manner. There is no charge for this confidential process. And, if we take your case, as a contingency-based law firm, there is no cost unless we win.

We’re here to help you navigate your lawful rights and ensure you get the treatment you deserve. Together, we can hold employers accountable and create a fairer workplace for everyone.

Image Credit: Portrait Image Asia / Shutterstock

proposed severance package considerations halunenlaw.comUnexpected or unwanted career transitions can be a time of anxiety and opportunity. If you’re an executive or other high-ranking employee who finds yourself asked or forced to leave your current position, it’s important to make smart, informed decisions about how to do so. This includes careful consideration of any proposed severance package from your soon-to-be-former employer.

There’s much more to a severance package than how many weeks or months of pay you’ll get, as important as that is. A severance agreement is not only about what your employer gives you, but also what the organization expects in return. If you’re not careful or fail to consult an executive and professional severance attorney before signing on the dotted line, you could lose out on benefits, forfeit rights, or limit future career opportunities.

Here are five elements of a severance package offer that should be on your radar:

Distribution of Severance Pay and Clawback Provisions

Severance pay is understandably the centerpiece of any severance package. In addition to the amount of compensation, you need to know how and when you’ll receive it. Will it be in a lump sum or will it come in installments? Either option comes with tax implications you should discuss with your attorney or accountant.

In addition, look out for any clawback provisions that allow the employer to stop making payments or demand that you return money already paid if the company were to allege that you breached the agreement. Such allegations often involve non-competition or non-disparagement provisions, as discussed below.

Paid Time Off and Vacation

In addition to severance pay, any earned but unused paid time off or vacation days should be part of your package. If you incurred any unreimbursed business expenses, the agreement should account for that as well.
Insurance

Under the Consolidated Omnibus Reconciliation Act (COBRA), you have the right to remain on your company’s health insurance plan for up to 18 months. One caveat: COBRA premiums can be astronomical if the employer doesn’t agree to continue paying its portion. Explore whether your employer is willing to contribute to your COBRA premium. If your employer provided you with life or disability insurance, ask whether your coverage will continue until you obtain a new job.

Restrictions on What You Can Do and Say

Since it’s likely your employer is under no legal obligation to offer you severance, it will probably want something from you if it does so. This may include non-competition, non-solicitation, non-disclosure, or non-disparagement provisions that limit what you can do or say after you part ways. Depending on your career plans, such restrictions could diminish your ability to seize desirable employment or other opportunities.

Waiver of Claims

Your employer wants your severance agreement to be a final and definitive parting of the ways. The company will ask you to give up any potential legal claims you may have against the company, such as those alleging discrimination or harassment. Make sure you understand the real reasons for your termination and discuss any concerns with an employment attorney before waiving your rights to pursue such matters.

If you have questions about the terms of a proposed severance agreement or would like help negotiating the terms of your departure, we encourage you to submit a Case Review Form to our firm. One of our attorneys will review your information, and you’ll receive a response from our firm in a timely manner. There is no charge for this confidential process. And, if we take your case, as a contingency-based law firm, there is no cost unless we win.

We’re here to help you navigate your lawful rights and ensure you get the treatment you deserve. Together, we can hold employers accountable and create a fairer workplace for everyone.

Image Credit: Flamingo Images / Shutterstock

pharmaceutical and medical kickbacks prohibited halunenlaw.comThe False Claims Act (FCA) is designed to combat and prevent healthcare fraud, including pharmaceutical or medical providers that illegally solicit or accept kickbacks [1].

Persons who become aware of illegal solicitation or acceptance of kickbacks in the healthcare industry can act as a whistleblower on behalf of the government and file an FCA lawsuit. Under the “qui tam” provisions of the FCA, these individuals can receive financial compensation for their efforts and legal protection from retaliation. In many cases, individuals who report kickbacks and other forms of healthcare fraud are current or former employees, patients, or others with unique opportunities to know about the alleged misconduct. They are motivated by a desire to do what is right. Whistleblowers thus serve an integral role in protecting patients, American taxpayers, and the integrity of our nation’s healthcare system.

Why are Kickbacks Illegal?

The primary reason why kickbacks are illegal in the healthcare industry is that they have a potent ability to interfere with a healthcare provider’s independent judgment resulting in treatment decisions that are made to serve the provider’s interest rather than the best interest of the patient. For example, a Yale study[2] found that cardiologists were between two and 11 times more likely to implant a defibrillator made by the device company that paid them the most money compared to physicians who did not receive payments. Another study showed that giving physicians even one free meal during which a particular drug was discussed resulted in a higher prescription rate. [3]

Accordingly, kickbacks are illegal for many reasons:

    • Kickbacks compromise the quality of patient care.
    • Kickbacks induce health care providers to consider their own interests before those of their patients.
    • Kickbacks drive up health care costs for patients and health insurance providers.
    • Kickbacks lead to medically-unnecessary treatments, medications, and other supplies/services.
    • Kickbacks and other forms of health care fraud cost taxpayers billions of dollars each year. [4]

In one of the largest health care fraud cases in American history [5], the government recovered $1.7 billion from HCA Inc., a provider that engaged in several unlawful practices, including providing kickbacks. This landmark case was sparked by nine FCA lawsuits brought by whistleblowers who ended up receiving a combined share of more than $151 million in financial rewards. These nine people helped initiate a course of action that ended the provider’s shocking record of criminal activity and fraud.

Federal Laws Prohibiting Kickbacks in Healthcare

While the FCA provides a process for whistleblowers to file lawsuits on behalf of the government, there are two specific federal laws that make healthcare kickbacks illegal in the United States—the Anti-kickback Statute (AKS) and the Stark Law. Violations of both these laws can be prosecuted under the FCA.

The Anti-Kickback Statute, 42 U.S.C. § 1320a–7b(b)

The AKS is one of several fraud and abuse laws that apply to the healthcare industry. [6]
The AKS makes it illegal to offer, solicit, or accept anything of value to motivate or reward referrals in any capacity. Essentially, a medical provider or company is committing fraud when incentives are provided to encourage the use of certain products or services for which payment is made via federally-funded programs, such as Medicare, Medicaid, and Tricare.

Examples of kickbacks include:

    • Cash payments
    • Gifts
    • Travel and entertainment
    • Free or discounted services or supplies

 

It is not unusual for organizations and providers to disguise illegal kickbacks as legitimate medical payments. For example, a pharmaceutical company may hide illegal activity by paying a doctor an inflated rate for a speaking engagement. Regardless of the basis of a specific payment, the arrangement as a whole can still be categorized as fraudulent if its intent is to influence behavior.

Both the payers and recipients of kickbacks can be prosecuted under the AKS. Penalties for kickbacks can include criminal and civil measures, including fines, jail, and removal from federal healthcare programs. A conviction does not require the government to prove that the conduct harmed patients or caused financial loss.

Violations of the AKS can be prosecuted under the FCA and may result in an award of damages up to three times the full amount the government paid for the kickback-tainted products or services as well as civil penalties.

The Stark Law, 42 U.S.C. § 1395nn

The Stark Law focuses specifically on physicians. It prohibits them from referring Medicare/Medicaid patients to medical providers for particular health services if the referring doctor has a financial relationship with that provider. Financial relationships include ownership, investment interests, or other compensation arrangements. Unless an exception applies under the Stark Law, it is illegal to make these referrals and submit claims for any payments related to these prohibited referrals.

Violations of the Stark Law can be prosecuted under the FCA and may result in an award of damages up to three times the full amount the government paid for the Stark-tainted services as well as civil penalties.

Key Difference between the Anti-Kickback Statute and the Stark Law

The most important difference between the Anti-Kickback Statute and the Stark Law is each law’s focus.

The Anti-Kickback Statute covers referrals from anyone for any services or items paid for by any federal healthcare programs. However, the Stark Law is more specific, focusing on referrals from a physician made for designated health services under Medicare or Medicaid.

Under both of these federal laws, violations can also be considered a violation of the FCA. Therefore, individuals with knowledge of AKS or Stark law violations can bring a “qui tam” lawsuit through the FCA.

Report Medical Kickback Schemes and Stark Violations through the FCA with Help from Halunen Law

If you suspect a healthcare provider of soliciting or accepting illegal kickbacks, Halunen Law can review your case and provide professional guidance about next steps to take and whether a False Claims Act case may be viable.

Our False Claims Act attorneys at Halunen Law practice nationwide, advocating for whistleblowers who speak up against healthcare industry misconduct. With extensive expertise and a proven track record of success, the anti-kickback lawyers at Halunen Law are well-equipped to protect you from illegal retaliation and ensure the best possible outcome.

If you feel you’ve experienced illegal action in your workplace, we encourage you to submit a Case Review Form to our firm. One of our attorneys will review your information, and you’ll receive a response from our firm in a timely manner. There is no charge for this confidential process. And, if we take your case, as a contingency-based law firm, there is no cost unless we win.

We’re here to help you navigate your lawful rights and ensure you get the treatment you deserve. Together, we can hold employers accountable and create a fairer workplace for everyone.

 

Sources:
[1]  https://www.justice.gov/civil/false-claims-act
[2] https://www.icij.org/investigations/implant-files/heart-doctors-more-likely-to-implant-devices-from-manufacturers-that-pay-them-new-study-finds/
[3] https://www.nbcnews.com/health/health-news/free-lunches-pay-drug-companies-study-shows-n595906
[4]  https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/Downloads/Fraud-Abuse-MLN4649244.pdf
[5]  https://www.justice.gov/archive/opa/pr/2003/June/03_civ_386.htm
[6]  https://oig.hhs.gov/compliance/physician-education/fraud-abuse-laws/

 

 

Featured Image: Lisa-S / Shutterstock

upcoding and unbundling in healthcare fraud halunenlaw.comUpcoding and unbundling in healthcare are two forms of improper medical coding. Both fall under the federal government’s definition of healthcare fraud when the government is paying for the care and can be pursued through the False Claims Act.

With serious implications that can cause harm to patients, taxpayers, and the American healthcare system as a whole, fraudulent practices such as these are aggressively investigated, prosecuted, and penalized.

What is Upcoding?

Considered a serious form of fraud, upcoding occurs when a healthcare provider inflates bills to the government by submitting false medical codes to Medicare, Medicaid, TRICARE, or other government payers—that is, the provider bills for diagnoses and services that are more serious and expensive than the actual services rendered.

Many kinds of healthcare providers have been investigated for upcoding, including physicians, healthcare facilities, providers of home health care, physical therapy providers, and even entire healthcare networks.

Providers and insurers use billing codes to communicate the services provided to various patients. Each billing code corresponds to a specific diagnosis or service while simultaneously labeling the complexity of work required by the provider and, thus, the associated costs. Government (and private) insurers use these billing codes to calculate and issue payments to healthcare providers.

The consequences of upcoding are serious and affect both the patients involved and insured patients as a whole. Because upcoding leads to an unnecessary increase in insurer spending, it can be a catalyst for increased rates or reduced coverage. In addition, upcoding involving government payors such as Medicare and Medicaid steal vital funds from taxpayer-funded healthcare programs. On an individual patient level, upcoding fraud has an impact on the integrity of a patient’s medical records and may prevent them from receiving proper care in the future.

Doctors and Upcoding

All doctors must document provided care and services and then utilize standardized medical billing codes to bill insurers for the procedure(s). This expectation applies to both primary care and specialty physicians.

Doctors engage in upcoding when they manipulate medical coding to obtain financial compensation that exceeds what they have fairly earned. There are generally three types of upcoding fraud committed by doctors

    • A physician may perform a simple, routine procedure, then use a different code to indicate that a more complex (and higher-paying) procedure was completed.
    • A physician may use incorrect Evaluation & Management (E&M) codes to suggest that a patient’s visit required more of their time/expertise than it actually did.
    • A physician may attempt to apply modifier codes to bill for specific additional services, despite those services being covered under the standard code for the visit in question.

Hospitals and Upcoding

Upcoding can also occur on a larger scale, such as at the hospital/healthcare facility level. The costs associated with hospital-provided inpatient care are governed using pre-determined rates, which depend on the diagnosis-related group (DRG) to which they belong. The DRG is directly tied to the severity of a patient’s diagnosis, as well as the type of stay they require, which are determined according to diagnosis codes (ICD codes).

Two of the most common types of upcoding committed by hospitals are:

    • When a hospital bills for physician-provided care, even though the care was actually provided by a lower-paid professional, such as a nurse or physician’s assistant
    • When a hospital bills an inpatient stay at the highest-possible severity level, even though the patient received routine care with no secondary diagnosis, major complication, or comorbidity (additional patient condition).

Upcoding and Other Healthcare Providers

In addition to doctors and hospitals, upcoding fraud can also be committed by other entities. For example, federal medical fraud cases include upcoding carried out by urgent care facilities, home healthcare agencies, and durable medical equipment (DME) providers.

What is Unbundling?

Another form of improper medical coding and fraud is unbundling, also referred to as “fragmentation.” This fraudulent activity most commonly occurs in bills submitted to Medicare and Medicaid because the federal insurers often provide lower reimbursement rates for specific types of medical procedures that tend to be performed together. For example, incisions and closures related to surgical procedures will be bundled or combined with the procedure itself – or multiple blood tests from a single specimen will be bundled at a specific billing amount. Typically, the total reimbursement rate will be lower than it would have been for the procedures billed separately.

Unbundling in medical coding occurs when a healthcare provider fragments or unbundles billing codes to receive a higher reimbursement amount. Providers may utilize electronic health records (EHR) software to falsify treatment notes or alter the displayed codes, thus justifying the unbundled billing at the higher rate.

Like upcoding, unbundling is an act of fraud committed against the federal government. It carries serious penalties that can include fines, loss of medical license, and jail time.

Reporting Upcoding and Unbundling or Other Forms of Healthcare Fraud under the False Claims Act

Medical upcoding fraud and unbundling fraud are illegal, can cause patient harm, and line the pockets of those who would cheat the government at the cost of government health systems and all taxpayers. The Government relies on persons with knowledge of upcoding or unbundling, such as employees, coding personnel, and even patients themselves, to bring these illegal practices to light when they involve government-provided healthcare.

Persons with knowledge of upcoding or unbundling may challenge this illegal coding conduct by bringing a lawsuit under the False Claims Act. The FCA is a federal statute designed to reward whistleblowers who bring “qui tam” lawsuits against companies and individuals defrauding the government. If the Government succeeds in getting money damages or civil penalties from the coding claim, the person reporting the fraud is generally entitled to between 15-30% of the money recovered. Additionally, the False Claims Act can protect whistleblowers from retaliation for reporting the illegal conduct.

The Government may also prosecute upcoding or unbundling criminally, and a conviction can result in severe penalties. Fines, revocation of medical licensure, and jail time are all possible outcomes of a conviction.

Private individuals must be represented by counsel to file an FCA lawsuit. If you are aware of upcoding, unbundling or other types of federal fraud, your first step should be to contact a law firm with deep experience in bringing False Claims Act lawsuits. Most FCA attorneys work on a contingency basis, meaning that you pay nothing unless your case is successful.

The healthcare fraud attorneys at Halunen Law have worked extensively with cases such as these, providing legal expertise, advocacy, and protection to the courageous individuals that speak out against corporate fraudulent conduct. Every case is unique, but we have built the experience and skill necessary to fight on your behalf.

If you feel you’ve experienced illegal action in your workplace, we encourage you to submit a Case Review Form to our firm. One of our attorneys will review your information, and you’ll receive a response from our firm in a timely manner. There is no charge for this confidential process. And, if we take your case, as a contingency-based law firm, there is no cost unless we win.

We’re here to help you navigate your lawful rights and ensure you get the treatment you deserve. Together, we can hold employers accountable and create a fairer workplace for everyone.

State Capital Minnesota-revised-reasonable-accommodations-law

Individuals with disabilities are afforded considerable legal protection against workplace discrimination under both state and federal law. The Minnesota Human Rights Act (“MHRA”) is our state law that prohibits discrimination, harassment, and retaliation based on protected characteristics in Minnesota. In the context of individuals with disabilities, the MHRA provides that, except when based on a bona fide occupational qualification (a.k.a. a reasonable necessity to carry out a particular job function in the normal operation of an employer’s business),[1] employers must provide a reasonable accommodation for job applicants or qualified employees with disabilities unless the employer can demonstrate that the reasonable accommodation would pose an undue hardship on the employer’s business.[2] This has led many to question just what steps must be taken to accommodate for an individual’s disability.

In 2019, a lawsuit involving this exact issue made its way to the Minnesota Supreme Court. The result of the case titled, McBee v. Team Industries, Inc., functionally gutted the protections of an employer’s obligation to engage in the interactive process to determine an appropriate reasonable accommodation.[3] However, the Minnesota Legislature recently amended the MHRA, codifying this particular requirement of employers and protecting the rights of employees once again.

On June 30, 2021, the Minnesota Legislature abrogated the McBee ruling by amending the reasonable accommodation section of the MHRA. In doing so, the legislature made it clear that the MHRA requires an employer to engage in “an informal, interactive process with the individual with a disability in need of the accommodation,” adding “this process should identify the limitations resulting from the disability and any potential reasonable accommodations that could overcome those limitations.”[4]

Additionally, in defining whether an accommodation would impose an undue hardship on an employer, the MHRA also requires employers to have “documented good faith efforts to explore less restrictive or less expensive alternatives.”[5] This language is absent from the Americans with Disabilities Act (the federal law) and Equal Employment Opportunity Commission guidance.

Reasonable workplace accommodations for individuals with disabilities have raised many questions, and they are often difficult to navigate. As an employee, you have rights, and the attorneys at Halunen Law are committed to ensuring that they are protected.

If you have been denied employment or terminated and think that this decision may be predicated on an illegal reason (e.g., discrimination), the experienced attorneys at Halunen Law are here to help. Contact us today for a free consultation.

[1] https://www.eeoc.gov/laws/guidance/cm-625-bona-fide-occupational-qualifications.

[2] Minn. Stat. § 363A.08, subd. 6(a).

[3] See McBee v. Team Industries, Inc., 925 N.W.2d 222 (Minn. 2019).

[4] Minn. Stat. § 363A.08, subd. 6(a).

[5] Minn. Stat. § 363A.08, subd. 6(b)(5).

doj cyber fraud cybersecurity whistleblower fca

In 1865, it was whistleblowers who were critical in reporting fraud by those who provided the U.S. War Department with rusty rifles, boats that leaked, and hats that melted in the rain. Today, whistleblowers are now critical to protecting the United States in the digital space. No longer on the battlefield of the Civil War, fraud has moved into the cybersecurity space in the digital age.

Though a concern of the Government for many years, the Department of Justice (DOJ) is significantly increasing its focus on cybersecurity and has launched a Civil Cyber-Fraud Initiative. Deputy Attorney General Lisa Monaco announced at the recent 6th annual Aspen Institute’s Cyber Summit that the DOJ will use its civil enforcement tools, including the False Claims Act, to pursue government contractors who receive federal funds but fail to follow required cybersecurity standards. Said Deputy Attorney General Monaco: “For too long have companies chosen silence under the mistaken belief that it is less risky to hide a breach than to bring it forward.” [1]

The focus of the task force implementing the Civil Cyber-Fraud Initiative is to pursue cybersecurity-related fraud by government contractors and grant recipients. DOJ has highlighted three types of fraudulent conduct on which it will focus:

    1. Knowingly providing deficient cybersecurity products or services;
    2. Knowingly misrepresenting cybersecurity practices or protocols; and
    3. Knowingly violating obligations to monitor and report cybersecurity incidents and breaches.

Employees and independent contractors who provide information technology and information security services are in a prime position to uncover cybersecurity fraud. But this fraud isn’t limited only to those entities actually providing information technology (IT) services directly to the government – it also includes any company that is contracting with the government to provide goods or services that are possible targets for cyber-attacks. For example, in 2019, DOJ reached an $8.6 million settlement with Cisco Systems, Inc. for selling video surveillance products with known vulnerabilities that could be exploited by hackers.

Another important focus of cybersecurity is government information. For example, compliance with cybersecurity requirements is critical for companies dealing with controlled unclassified information (CUI) and covered defense information (CDI). Protection of such information is critical for a Department of Defense contractor, perhaps selling rockets or missiles to the government, Even though this company isn’t providing IT services per se, its failure to maintain compliant digital security systems could give rise to False Claims Act liability, to say nothing of jeopardizing national security.

Whistleblowers play a critical role in protecting the United States from malicious cyber-attacks. They are often the only individuals in a position to identify a company’s failure to meet cybersecurity requirements including vulnerabilities in cybersystems or actual breaches that threaten the American People’s security and privacy. It is a distressing but true fact that some companies who do business with the Government lie about their cybersecurity compliance. That is the type of fraudulent conduct the DOJ is intent on bringing to light, using the False Claims Act as a powerful civil tool to deter the fraud and provide redress to the Government for compliance failures.

If you have knowledge of cybersecurity fraud involving Government expenditures, a False Claims Act attorney can help you come forward and provide information and assistance to the Government. Besides providing a means to assist the Government in its Civil Cyber-Fraud Initiative, the FCA includes provisions protecting whistleblowers from retaliation and rewarding them with a percentage of any damages proceeds the Government recovers. It may be a new kind of war, but the stakes are high and the Government continues to rely on private persons to blow the whistle and shine a light on cybersecurity fraud it has no other way of finding.

Nathaniel-headshotAs an attorney with Halunen Law’s FCA Practice Group, Nathaniel Smith is determined to bring fraudulent conduct to light, and to justice. Having recovered millions on behalf of whistleblowers in both employment retaliation cases and qui tam whistleblower lawsuits under the False Claims Act (FCA), he is relentless in his pursuit. Learn more about Nathaniel F. Smith.

 

[1] https://www.justice.gov/opa/pr/deputy-attorney-general-lisa-o-monaco-announces-new-civil-cyber-fraud-initiative

Featured Image: Shutterstock/ By Skorzewiak

© 2026 Halunen Law | Minneapolis Employment Attorneys