December 5, 2013

Employee Certification as False Claims Risk Management

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Lowering the risk of a false claims suit is a priority in the world of healthcare. The best risk management option may be a certification through which employees either verify that they do not have any current compliance concerns, or they describe their worries. 

Some organizations have considered asking employees to promise not to bring a false claims suit against their employers. I discourage this for two reasons. First, the legality of such a promise is highly questionable. Most courts have concluded that public policy would render any promise not to report fraud as void (some courts have, however, allowed individuals to waive their right to receive any payment under the False Claims Act). In other words, the individual can bring a suit, but won’t receive any money if the suit is successful. Therefore, it can be worthwhile having language requiring employees to report concerns internally, with notation of a waiver of the relator’s share of any recovery.

Secondly, I don’t like the implied message, which sounds like “we’re worried we may be doing something wrong, so promise you won’t turn us in.”

A far better approach is to have a form asking employees to confirm that they are not aware of any existing compliance issues – or, if they do have some compliance concerns, permitting them to report them. Such a form has several advantages. Obviously, it is a tool for uncovering compliance concerns. It also promotes a culture of compliance, emphasizing that the organization wants to detect problems. Finally, I have seen many situations in which an employee has a revisionist view of history, asserting that he or she has reported a concern for years and years but has been ignored – while in reality, there is no evidence suggesting the employee ever raised the issue. Having a signed certification in which an employee did not report the issue makes it clear that even if the employee has had a concern for a long time, when given the opportunity to do so, he or she didn’t call it to the organization’s attention.

Asking employees to sign such a form is likely to result in a burst of compliance issues, real and imagined, coming to the forefront. Obviously, you shouldn’t circulate the form unless you are prepared to take the time to fully investigate the issues that follow. Many of the concerns will be things that might be characterized as “nuisance” issues rather than true compliance topics. It is likely that you will get reports reading something to the effect of “Johnny spends all his time talking on the phone with his significant other, not working.” But any effective compliance detection process will generate false alarms.

Making it easy for people to report concerns and establishing a clear record of those employees who have no concerns can be a powerful tool if you ever need to convince the Office of Inspector General that you have an effective compliance plan.

About the Author

David Glaser is a shareholder in Fredrikson & Byron's Health Law Group and helped establish its Health Care Fraud & Compliance Group. David helps healthcare entities negotiate the maze of healthcare regulations, providing advice about risk management, reimbursement and business planning issues. He has considerable experience in healthcare regulation and litigation, including compliance, criminal and civil fraud investigations, and reimbursement disputes.

Contact the Author

dglaser@fredlaw.com

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David M. Glaser, Esq.

David M. Glaser, Esq., is a shareholder in Fredrikson & Byron’s Health Law Group. David helps clinics, hospitals, and other healthcare entities negotiate the maze of healthcare regulations, providing advice about risk management, reimbursement, and business planning issues. He has considerable experience in healthcare regulation and litigation, including compliance, criminal and civil fraud investigations, and reimbursement disputes. David’s goal is to explain the government’s enforcement position and to analyze whether the law supports this position. David is a popular panelist on Monitor Mondays and is a member of the RACmonitor editorial board.

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