All of the pieces are in place for a dramatic crackdown on fraud within the healthcare sector.
The problem is real. Waste and fraud in healthcare are getting a lot of scrutiny because any number of studies and estimates in recent months have shown that fraud and waste are adding billions of dollars to the nation's healthcare tab.
Recovery audit contractors are on the prowl at hospitals, looking for Medicare overbillings. The Justice Department is conducting high-profile arrests of Medicare/Medicaid con men accused of multimillion-dollar fraud schemes. The Obama Administration—desperate to find savings wherever it can to bring down the price tag of healthcare reform—is committed to an aggressive program to root out healthcare fraud.
"They believe there is a great deal of waste, and clearly fraud comes under their definition of waste," says Brian Roark, a partner in the litigation group at Bass, Berry & Sims, a Nashville law firm "There is every indication that the administration is going to increase the amount of resources the government devotes to finding and prosecuting fraud cases."
"The more that healthcare fraud waste is in the spotlight, it is going to lead to an increase in employees who see this and decide to bring a whistleblower lawsuit and it's going to urge the plaintiff"s bar to be more active as well," Roark says.
Who can blame them? There is plenty of money to be made in successful whistleblower lawsuits. A plaintiff who brings a lawsuit under the Federal False Claims Act can be awarded up to 30% of the settlement account. Do the math. "When you see these settlement amounts in the millions of dollars, the whistleblowers and their lawyers stand to recover significant amounts," Roark says.
The best defense against a whistleblower suit, Roark says, is to plan proactively to ensure that they"re never filed in the first place. "You want to create a culture of compliance and a culture where employees feel they can raise issues internally with the hospital as opposed to going to externally talk to a plaintiff's lawyer," Roark says.
"You want your employees to know that, from the moment they walk through the door, this is an organization that highly values and expects compliance with the law and, if employees ever become aware of issues or have doubts or concerns about things, that they raise them with the appropriate people and feel confident that those concerns will be addressed," Roark says.
That culture of compliance makes it easy for employees to report fraud through anonymous hotlines and e-mail in-boxes where they can send complaints, and even with exit interviews that specifically ask employees if they"re aware of fraud at your healthcare organization.
"If the HR person hears in an exit interview that the employee thinks there have been some billing irregularities, the HR person has to make sure that that gets communicated to compliance and legal, the people who can do something about it," Roark says. "When issues are raised hospitals have to proactively attack those issues. Conduct whatever review or investigation is needed to determine if the allegations have merit. If they do, come up with a solution to fix the problem."
Roark says the hospitals that avoid whistleblower suits often have effective compliance programs that include internal auditing and other processes in place that will find problems on their own before they get brought by the government or a whistleblower.
"The government absolutely looks favorably upon hospitals and healthcare companies that are making every effort to be in compliance." Roark says. "The government wants to see more than the hospital's words that they are trying to be compliant. The government wants to see action. 'Show us your compliance plan. Let us meet the people who are carrying out this compliance work.' They want tangible evidence of the hospital's efforts to be in compliance with the law."