Employees are an employer's largest potential liability. This is especially true for employers in the healthcare industry who participate in federal healthcare programs. Last year, the United States Department of Justice recovered $2.21 billion from whistleblower lawsuits; that means whistleblowers accounted for 72% of all False Claims Act. Federal law, and some states, allows employees to bring a civil lawsuit against employers for alleged violations of federal law. Whistleblowers are particularly active in healthcare. 86% ($1.909 billion) of all whistleblower recoveries were recovered in the healthcare space.
False claims litigation can be very expensive. If unsuccessful, the statute's provision for double and treble damages should further increase a healthcare employer's concern. But, beyond an employer's pocketbook, false claims whistleblower litigation also threatens the employer's existence. A settlement or adverse verdict can result in exclusion from participating in federal healthcare programs, revocation or suspension of professional licensing, or the imposition of other onerous administrative regulations and penalties. To mitigate the likelihood of whistleblower lawsuits under the False Claims Act, healthcare employers should consider these four tips.
1. Develop a Compliance Plan
First, healthcare employers need a compliance plan. The Department of Health & Human Services Office of the Inspector General (DHHS OIG) publishes guides and materials advising employers on compliance best practices based on the employer's scope of service. Employers should work with legal counsel to develop a compliance plan that best fits the employers' needs and realities.
After developing the compliance plan, healthcare employers, no matter how big or small, should always have a designated compliance officer tasked with administering, maintaining, and updating the compliance plan on a regular basis. The compliance officer should also ensure that employees and professional receive continued education. Finally, the compliance officer should coordinate with the employer's accounting department or business manager and legal counsel on regular audits of business financials to detect potential improprieties.
2. Review Your Business Structures
Second, healthcare employers need to regularly review their business structures. Federal anti-fraud and anti-kickback laws are designed to regulate aspects of healthcare that would lend itself to fraud and abuse. As a result, compliance often results in looking at whether an employer has employee compensation programs or referral relationships that lend themselves towards over-utilization, fraudulent claims, or unlawful remuneration.
The regulatory regime casts a wide net, so employers should review their business structures on a regular basis to ensure that institutional structures and relationships that may have initially seemed compliant do not subsequently result in non-compliance.
3. Maintain Clear Policies on Documentation of Services
Third, healthcare employers need clear policies about documentation of services. As the adage goes: if it was not documented, it was not done. In the context of whistleblower suits, documentation is especially critical in credibility disputes. For example, if a whistleblower alleges an employer or provider has been up-coding encounters, documentation of the patient's condition is vital in disproving such allegations.
If documentation is lost, inadequate, or not properly customized for the encounter, or the observations recorded are inconsistent among various providers, a lawsuit is much harder to defend because suits often contain allegations spanning years and hundreds or even thousands of claims.
Documentation is also critical in lawsuits based on allegations up-coding based on metrics such as treatment time or anesthesia or medication administration. Employers need to ensure that documentation is done, reviewed for accuracy and completion by the provider, and properly saved.
4. Institute Internal Reporting and a Whistleblower Protection Program
Finally, healthcare employers need internal reporting and whistleblower protection programs. Federal and state laws protect whistleblowers from retaliation. Retaliation can refer to adverse employment action, but it also includes protection against threats, harassment, and "any other manner" of discrimination.
Without retaliation, whistleblowers are entitled to receive between 10-30% of any recovered damages obtained as a result of their whistleblowing and can recover attorneys' fees against their employer. Claims involving retaliation open up further damages for the whistleblowers, such as double back-pay damages with interest and compensation for any special damages, including but not limited to litigation costs and attorneys' fees.
Implementing a whistleblower protection program, therefore, is not only a way to show good faith in compliance, but also a tool to mitigate a whistleblower's financial interest in pursuing allegations against an employer by working to limit the damages that the whistleblower can recover.
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.