United States: Developing A "Best-in-Class" Internal Investigation Policy

The regulatory labyrinth which overlays the health care industry provides ample opportunity for employees to commit violations of law that expose their employers to civil and criminal liability. When hospitals and other providers suspect or learn of misconduct by employees, they must examine what happened and take corrective action promptly. In undertaking to investigate questionable behavior, however, those organizations should understand the risks of conducting inquiries in an inconsistent or indiscriminate fashion. These risks include lawsuits from disciplined or discharged employees, as well as skepticism from government regulators about the legitimacy of the process. In those cases, the manner in which the investigation is conducted can be as important as the findings themselves.

We spoke with William Athanas, John Park, and Sheila Sawyer from the law firm Waller to gain insight into the value of an internal investigation policy as part of every health care organization's compliance strategy.

1) Where do hospitals and health systems most commonly expose themselves to liability in conducting an inquiry into employee misconduct?

In responding to a government investigation, a primary area where health care providers expose themselves to liability is by conducting their own internal review in a fashion that effectively undermines the organization's credibility. Ultimately, the credibility of an internal review is an essential commodity to convince federal regulators that the complaint has been resolved, or is something that is not systemic across the organization. Hospitals and health systems may face significant consequences—both financial and operational—by undertaking an internal investigation that leads regulators to believe that it was designed to overlook any deficiencies, or even if undertaken in good faith, was flawed in its execution.

In situations when the government is not the impetus for conducting an internal investigation, it is critical to avoid the "silo effect" when reviewing allegations of misconduct. Information about employee misconduct may come in through a variety of avenues and different departments: human resources, compliance, legal, risk management, quality assurance, or peer review. It's important that these departments coordinate and consult regularly with each other to ensure that the report of employee misconduct is fully and properly investigated.

For example, some "routine" HR complaints will implicate broader patient care, billing, or compliance issues. A health system must effectively communicate across different areas of the organization to understand the full implications of a particular complaint, even if it's not apparent on the face of the report that it raises potential regulatory concerns. A lawsuit from a disciplined employee can quickly turn into a larger compliance problem if not properly managed.

Another common shortcoming is the failure of providers to get at the root cause of the misconduct. Any time there is a violation or allegation of wrongdoing, employers should always be asking, "How did this happen?", "Why did this happen?", and "How can we improve our compliance program so that this does not happen again?" These are critical questions that always need to be asked, so that from an organizational standpoint, a hospital can put systems and policies in place to prevent the same conduct from occurring again in the future. That is really the hallmark of an effective compliance program, and what the government expects to see.

2) How may the adoption of an internal investigation policy minimize employers' risk?

The government expects that every company in the health care industry maintain a compliance program that is effective, and capable of detecting, investigating, and preventing employee misconduct and Fraud & Abuse. An internal investigation policy is the primary mechanism for safeguarding that an organization has thoroughly and appropriately reviewed all allegations of wrongdoing.

Foremost, an internal investigation policy serves as a resource for carrying out a comprehensive and uniform examination based upon underlying principles and standards. This provides tangible evidence of the commitment that a provider has to methodically vetting all cases of employee misconduct or potential noncompliance. Additionally, an investigation strategy that includes a transparent and recognized anti-retaliation policy minimizes the risk of lawsuits from terminated employees who previously filed a complaint.

3) What are the essential components of an effective and comprehensive internal investigation strategy?

  • Impartial: Health care organizations should demonstrate that facts have been gathered in a fair and disinterested fashion, and the investigation has taken an unbiased look at the complaint at hand. Many, if not most, investigations that arise can and should be conducted by internal compliance and in-house counsel. However, it's important to understand that there are some types of allegations that warrant the involvement of outside counsel to serve as an independent, neutral third-party. Although this decision is not always easy, when making the decision whether to involve outside counsel, organizations should consider nature and seriousness of the allegation, whether it suggests systematic wrongdoing, and whether the alleged wrongdoing was directed or tacitly approved by senior management or those who will necessarily be involved in the internal investigation.
  • Uniform: While employers won't be able to conduct an investigation in exactly the same manner each time due to different factual scenarios, the underlying approach and principles should remain consistent across operational and geographic lines. A systematic process must be in place so that the individuals in question receive a notice of the allegations against them, are provided an opportunity to respond, and there is a formal procedure is in place for gathering documents and interviews.
  • Confidential: Organizations should keep not only the content, but in many cases, the existence of an internal investigation confidential to the greatest extent possible. Discretion is imperative to avoid unnecessarily tarnishing the reputation of an employee if allegations of misconduct prove unfounded.
  • Thorough: An internal investigation should gather and review all evidence that is likely to have a bearing on the subject matter, both in terms of documentation and oral testimony. This means compliance teams must interview all individuals and witnesses involved in the allegation to assess the credibility of the complaint. Employers should also be conscientious in detailing the review process to make certain a written record exists that reflects the thoroughness of the investigation. Providers need to keep in mind that the findings in this report may need to be communicated to other key constituents, such as the compliance committee, the Board of Directors, and potentially the federal government.
  • Complete: Often there are corrective actions that are put in place as a result of the investigation, making follow-up critical to confirm that the necessary remedial steps were taken to achieve compliance. Putting in place a timeline for executing a corrective action plan and contacting those responsible for implementing the plan to make sure that it was completed is essential for employers to close out an internal investigation.

4) What steps should in-house counsel and compliance teams take today to integrate new policies into broader compliance efforts?

Health care providers should first evaluate existing processes or procedures, informal or otherwise, for dealing with internal investigations when issues arise. In many cases, organizations may have a set of protocols that have evolved over time, or a more formalized system in place. Whatever the situation, employers should assess their current state of readiness, existing gaps in internal processes, and ways to move toward a more comprehensive investigation policy.

Second, the development of standard forms or templates can serve as a useful guide to ensure that the investigation policy is followed during an investigation. A checklist should include the type of allegation, how it came to an organization's attention, who was interviewed, what documents were reviewed, the findings or conclusions, and if correction action was taken. This ensures that a provider doesn't overlook any important steps in the investigation process, and provides a comprehensive record to use in the event of an employee lawsuit or government investigation.

Previously published by The Advisory Board Company: Health Care Law Roundtable, March 2013.

For further information visit Waller

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.