Doctors and health care service providers are under the False Claims Act microscope.  The risks are significant and the costs can be astronomical.  For all the obvious risks, doctors, hospitals, PPOs, HMOs, and health care providers need to pay more attention.  They are targets and the government knows it has an army of potential whistleblowers and lawyers ready to jump on them to seek monetary rewards.  Too often, I learn that FCA compliance programs are gathering dust on a shelf in a fancy notebook with power points to go with it.

First, an effective compliance program can actually reduce the number and extent of possible FCA violations. 

Second, because a plaintiff in an FCA action must prove that the doctor or hospital knowingly (including deliberately ignoring) violated the law or regulation, a strong and effective compliance program helps establish that any violation was not knowing, but rather the consequence of negligence or the conduct of a rogue employee, and contrary to compliance policies and practices. 

Third, an effective program can help to convince the government not to intervene in the lawsuit by showing that the conduct was that of a renegade employee or group of employees who were acting contrary to an established compliance program. 

The government’s decision to intervene or not to intervene can be decisive.  Over 95 percent of qui tam recoveries occur in cases in which the government decides to intervene.  Only a slim number of cases are successful when the government chooses not to intervene. 

Fourth, an effective compliance program helps limit damages by showing that the hospital or the doctor acted responsibly. 

The most significant risk centers on billing and coding of services for reimbursement from Medicare.    No one can review every bill or watch over every employee, but basic compliance principles can be adopted to minimize risks.  As always, documentation and internal controls are key to ensure compliance and identify potential problems. 

Given the complexity of the billing and coding system, every doctor or hospital will make mistakes.  It is important to build in practices and procedures to reduce billing errors and fix the problem once it is discovered.  Corrective efforts need to be documented and measure for frequency. 

A compliance program should never be built on perfection – instead it should reflect realistic expectations.  Even in those hospitals which serve relatively medium to small markets, a chief compliance officer should be appointed and the specific goals of compliance should be communicated to everyone. 

At the core of the compliance program is the need to avoid fraud.  The most important check on fraud is encouraging employees to identify potential problems, to report them to the compliance officer and to address these complaints.  An anonymous complaint process should be implemented in order to protect employees who suspect fraud by supervisors. 

Auditing for potential fraud must be regularly conducted.  A sampling of claims and charts should be identified, reviewed and, if necessary submitted for outside review.  Training of staff on the False Claims Act, potential liability and other risks in the health care field should be conducted on a regular basis. 

A training program must stress proper coding of services and the need to have chart documentation to support every claim. It also should address general billing matters as well as specific issues that relate to the individual practice..

The vast majority of FCA lawsuits are brought by disgruntled employees — both current and former employees.   Human Resources needs to ensure that there is no retaliation against a reporting employee, which can itself give rise to a separate legal action against the hospital.  Once an investigation is underway, if possible, the reporting employee should be given feedback so the employee knows that his or her concerns and reports are being taken seriously.  If ignored, the employee may become a whistleblower and file an FCA lawsuit.

Human resources should also be on the alert for warning signs that there may be potentially disgruntled employees or students.  Media reports or spikes in employee complaints can often indicate there may be issues that should be addressed.