Our discussion of the 21 ways an effective compliance system can help you follow “The Rules” for ongoing legal safety and financial betterment continues with Benefit Number Four: A compliance program reduces the likelihood of “whistleblowing.”
Finger-pointing by employees, former employees, contractors and others exposes HME companies to the risks of qui tam litigation, costly investigations and substantial fines and penalties. An effective compliance program can substantially reduce—and often eliminate—these dangers.
This is true for several reasons. First, I have found that most whistleblowing occurs because personnel believe that their employers do not value their input, or their concerns about company compliance. That belief combines with other factors that have contributed to the staffer’s perception of unfair treatment and disrespect; this can be enough to encourage the whistleblower to seek vindication (and financial reward) by telling the government about the problems that the staff member initially tried to discuss with the company.
An effective compliance program must, by definition, include a mechanism for encouraging and acting on personnel tips about compliance problems. If the program is working, the staffer should not be ignored when bringing information about internal problems to an HME company’s attention for investigation and appropriate action. More problems are resolved, and this means less motive and less opportunity for qui tam action under the Federal False Claims Act, or for government hotline reporting under Section 203 of HIPAA.
Second, a compliance program can reduce the dangers of whistleblowing even when the company declines to resolve the problem to the reporting staff member’s satisfaction. Nothing requires a compliance program to eliminate every problem or to choose a solution, or form of discipline, that satisfies the reporting staffer. When personnel feedback leads to a reasonable investigation and reasoned response to the identified problem, the organization will usually be insulated from fraud liability.
Violations of the law certainly can occur notwithstanding an effective compliance program. But the qui tam opportunities for whistleblowers are available only when the wrongdoing creates false claims, not merely inadvertent or negligent errors. To constitute a false claim, the wrongdoing must indicate a willful intent to submit claims known to be false, or submitted with “reckless disregard” for their accuracy. Even when the company fails to eliminate errors or problems that create reimbursement violations, the fact that the company has used an effective internal mechanism to address these sorts of problems will usually curtail the whistleblower’s ability to characterize the wrongdoing as a false claim.
Third, one of the cornerstones of an effective compliance program is that all company personnel—from the CEO down to billing entry clerks—must embrace the policies and protocols that the compliance program establishes for reporting and resolving problems. A staff member who decides to bypass the company’s internal reporting mechanisms and instead become a whistleblower may be held accountable for failing to follow the organization’s own rules for internal reporting and problem-solving. In addition, such insubordinate action could expose the staff member to disciplinary action (as part of the organization’s compliance program) for failing to follow the company’s rules regarding problem reporting.
One key caution here: The disciplined staff member may allege that the organization does not have an effective compliance program that satisfies the government’s requirements. Therefore, any organization that pursues sanctions against an insubordinate whistleblower must be confident that its compliance program will withstand scrutiny.
Fourth, most staff members who develop negative attitudes about their company, and thus seek some sort of revenge through qui tam actions (or otherwise), do not insist that the organization agree with everything they say, nor implement solutions which mirror precisely a staff member’s preferred solutions. Most staffers simply want their opinions to be valued, respected and carefully considered.
Note: Materials in this article have been prepared by the Health Law Center for general informational purposes only. This information does not constitute legal advice. You should not act, or refrain from acting, based upon any information in this presentation. Neither our presentation of such information nor your receipt of it creates nor will create an attorney-client relationship.
