How to avoid whistle-blower lawsuits: 4 key tips for healthcare leaders

There are several key steps healthcare leaders can take to lessen the chances of being hit with a whistle-blower lawsuit under the False Claims Act.

The Department of Justice obtained more than $3.5 billion in settlements and judgments from civil cases involving fraud and false claims against the government in the fiscal year that ended Sept. 30, with $1.9 billion recovered from companies and individuals in the healthcare industry. For the sixth consecutive year, more than 700 new False Claims Act cases were filed, with more than 600 of those suits brought under its whistle-blower or qui tam provision.

In the healthcare industry, many whistle-blowers are employed by or were previously employed by the organization they are exposing for fraud. However, the number of lawsuits brought by organization outsiders is increasing. Although the possibility of large pay outs and a strong plaintiff's bar pushing these matters contribute to the uptick in the number of whistle-blower cases being brought under the False Claims Act, there are some steps healthcare organizations can take to help prevent being the subject of one of these actions.

Becker's Hospital Review recently caught up with Matt Curley, a lawyer at Bass, Berry & Sims in Nashville, Tenn., to get his insight on whistle-blower lawsuits under the False Claims Act and steps compliance officers can take to prevent these actions.  

1. Improve visibility. It is vital that compliance officers are visible throughout the organization, according to Mr. Curley. In large, nationwide organizations this may require basing a compliance officer in each region. "When compliance leaders are visible and relatable, employees will feel more comfortable going to them with concerns," says Mr. Curley.

2. Conduct training. Live, in-person compliance training is more effective than computerized training, according to Mr. Curley. "With online [training] there isn't much room for interaction," he says. If offering in-person training isn't feasible, empowering managers to deliver the compliance message can be a good complement to the online training.

3. Close the loop. While it may be impossible to share the details or findings of an internal investigation, compliance officers should circle back with employees who have raised concerns to make them more aware of progress. "When employees know something is being done, they will be less likely to pursue external measures," says Mr. Curley. "Providing feedback also helps invest that person in the compliance efforts."

There is potential for False Claims Act whistle-blowers to recover large payouts from the actions they bring. However, a large recovery is not the primary driver of these lawsuits, according to Mr. Curley. "In most instances, whistle-blowers are not thinking so much in terms of a large payday but that they have no choice but to seek recourse because issues were not addressed internally," he says.

4. Remember third-party whistle-blowers. Since third parties such as vendors, consultants and independent physicians can serve as whistle-blowers, there should be avenues for them to report concerns as well. Although it is becoming increasingly common to see independent contractors or other third parties emerge as whistle-blowers, there are a number of steps hospitals can take to help avoid these lawsuits. Mr. Curley suggests hospitals require third parties to report compliance issues to the appropriate compliance personnel and include alternative dispute resolution provisions in contracts to help prevent these actions.

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