The Role of Compliance Department in Fighting (or Perpetuating) Health Care Fraud

scalesSometimes health care fraud is a well-known secret, something many in a company’s leadership know about and either passively or actively conceal.  Likewise, a number of lower-level employees may know about and be asked to help perpetuate the fraud.  Fraud takes cooperation.  How does this happen when almost everyone we meet agrees that it a blatant violation of both law and their moral codes?  Often, especially in cases involving larger organization, our Medicare fraud law firm finds health care fraud continues because the company’s structure allows it.

How Corporate Structure Can Contribute to Fraud

Earlier this year, Atlantic Information Services Inc. (“AIS”), a health care publishing and information organization, published a report on how corporate structures can contribute to health care fraud.  The Affordable Care Act mandates that Medicare/Medicaid providers have compliance programs (for an overview of this mandate, see the Medicare and Medicaid Services’ Webinar “The Affordable Care Act Provider Compliance Programs: Getting Started”).    The AIS report suggests that the compliance mission is hindered when compliance officers report to a company’s general counsel (“GC”) rather than reporting directly to the CEO or the board of directors.  According to the author, the mindset of the GC differs from that of the compliance team.  Ultimately, the article suggests legislators pass a new regulation forbidding a structure that makes the compliance department subordinate to the general counsel.

Building an Effective Compliance Team

The report lists five specific factors that can subvert the mission of a compliance department and Chief Compliance Officer (“CCO”):

  • 1) A legal department that refuses to give compliance enough power to be effective – Reporting to the GC may, some worry, limit the CCO’s ability to get information to the CEO or board. As one compliance professional explained: “General Counsel will argue in support of the will of the organization, while the responsibility of the compliance officer is to oversee the organization’s business conduct: ‘does this business approach fall within the letter of the law and regulation? Is it ethical?’”
  • 2) The company leadership doesn’t focus on compliance – The report stresses the importance of leaders that listen to and appreciate the value of the compliance team. For example, compliance professionals want leadership that will listen when they explain why repaying overpayments is ultimately good for business.
  • 3) Underfunding and/or lack of sufficient personnel — The report emphasizes the need for funding and staff, even for companies that believe they are compliant. Notably, compliance departments can help the bottom line by avoiding false claims liability.
  • 4) A human resources (“HR”) department that is used to being in charge –HR may feel threatened by the CCO and may interfere with compliance efforts. For example, HR may be accustomed to responding to hotline complaints but some complaints may be best directed to the compliance team.
  • 5) Board members who don’t care about compliance – The AIS piece emphasizes a need for synergy between the board and CCO, suggesting that a board that exhibits disinterest in compliance takes energy away from the compliance function.

Thoughts from the Front Line of Medicare Fraud Prevention

The above-cited Webinar explains that the Affordable Care Act mandates that Medicare and Medicaid suppliers have compliance programs that oversee the organization’s compliance with the law and help prevent fraud.  As a Medicare fraud law firm, we know that far too many companies technically have a compliance department but the team’s mission is thwarted by the company’s structure or the vision of its leaders.

If you have witnessed health care fraud (ex. payment of kickbacks, filing of false claims, etc.) and company leadership has refused to address the issue properly or creates an environment in which reporting fraud is strongly discouraged or leads to retribution targeting the reporter, you may need to go outside the company for help.  We understand this can be difficult and that is one of reason our health care fraud attorney chose this area of law.  Our firm can help you prevent future fraud and remedy past frauds while protecting you and ensuring you are compensated if the tip leads to a recovery.


See Related Blog Posts:

The False Claims Act: From Shoddy Civil War Uniforms to Costly Defense Contracts in 2014

Health Care Fraud Recovery Numbers For 2014 and the False Dichotomy of Prevention and Prosecution

(Photo by Clyde Robinson of work by Jason Luper)

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