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This Week in Whistleblower History: National Whistleblower Day and the Creation of the Medicare and Medicaid Programs

Posted  August 2, 2019

This week marks the seventh year in a row that Congress has designated July 30th National Whistleblower Day, honoring the occasion, on July 30, 1778, when the Continental Congress unanimously enacted the first whistleblower protection law in the United States.

The law was passed in response to a petition to the Continental Congress filed by a group of ten American sailors and marines, who reported that their commanding officer, Commodore Esek Hopkins, had tortured British prisoners of war. Congress suspended Hopkins from his post, and he retaliated against the whistleblowers by filing a criminal libel suit against them. Two of them, naval officers Samuel Shaw and Richard Marven, were jailed.

In a second petition read to Congress on July 23, 1778, Shaw and Marven pleaded that they had been “arrested for doing what they then believed and still believe was nothing but their duty.”  Congress agreed. To remedy the wrong against Shaw and Marven, and to encourage other whistleblowers to come forward, Congress passed a law that created a legal duty on the part of “all persons” to report fraud and corruption in the government:

Resolved, that it is the duty of all persons of the United States, as well as all other inhabitants thereof, to give the earliest information to Congress or any other proper authority of any misconduct, frauds, or misdemeanors committed by any persons in the service of these States, which may come to their knowledge.

The Continental Congress also authorized money for Shaw and Marven’s legal defense, who won the libel suit, and were freed.

To celebrate this historic event, Constantine Cannon attorneys attended a luncheon at the U.S. Capitol in Washington, D.C. In attendance were Senator Charles Grassley, a champion of the False Claims Act and other whistleblower laws, as well as Baroness Susan Kramer, a member of the British Parliament, who is actively helping to develop whistleblower protection laws in the United Kingdom. Constantine Cannon is a founding sponsor of the All Party Parliamentary Group on Whistleblowing,which recently issued a report on the status of these efforts.

Also this week, on July 30, 1965, President Lyndon Johnson signed into law Title XVIII and Title XIX of the Social Security Act, which created the Medicare and Medicaid programs, the first national health insurance in United States history.

At the signing ceremony in Independence, Missouri, with former President Harry Truman by his side, President Johnson paid tribute to Truman for first pushing for national health insurance twenty years earlier. He described the benefits of the law to be “as varied and broad as the marvel[s] [of] modern medicine itself” but acknowledged that the law might have “a few defects—such as the method of payment of certain specialists.” He expressed confidence that these problems could be quickly remedied. By July 1 the following year, more than 19 million Americans aged 65 or older had enrolled in Medicare, but the defects in the reimbursement methodology remained.

Over the next five decades, up to the present day, the Medicare and Medicaid programs have evolved and grown considerably. Today, approximately 60 million Americans are enrolled in Medicare, and 66 million in Medicaid. Total government spending on Medicare and Medicaid was $1.3 trillion in 2017 and is projected by CMS to reach $6 trillion by 2027.

Unfortunately, despite President Johnson’s fervent hope otherwise, both programs remain vulnerable to greedy and unscrupulous actors.  According to a GAO estimate, approximately $60 billion is lost to fraud in the Medicare program every year. The main legal tool to obtain recoveries is the False Claims Act, which rewards and therefore encourages whistleblowers to come forward with critical information and file a complaint to recover lost funds on behalf of the federal government. State False Claims Acts enable whistleblowers to do the same to recover state funds. The greatest percentage of recoveries under the False Claims Act on an annual basis is consistently attributable to cases involving healthcare fraud in the Medicare and Medicaid programs. Healthcare fraud is an on-going problem that requires constant vigilance.

Five years ago this week, on July 30, 2014, Senator Grassley celebrated National Whistleblower Day by honoring the patriotism of whistleblowers in testimony before a House committee that was considering amendments to weaken the False Claims Act. Reminding legislators of the first whistleblower protection law passed by the Continental Congress in 1778, Senator Grassley stated: “No matter what we do to deter waste and fraud, whistleblowers are the key to the government finding out about it when it happens. We have to do all we can to protect them from those who resist the role they play.” The proposed amendments were defeated.

Like Senator Grassley, Constantine Cannon honors the courage of whistleblowers who, in the best tradition of American patriotism, act on their duty to report fraud and corruption in state and federal government programs. If you are a whistleblower with information that you would like to report, please contact us.


Tagged in: Healthcare Fraud, Importance of Whistleblowers, Medicaid, Medicare, Whistleblower Eligibility, Whistleblower Rewards,