Compliance programs could come in handy as more execs turn whistleblower

At the end of July, Bloomberg News reported that legal experts predict that new rules and incentives in the Patient Protection and Affordable Care Act could make last year's record number of healthcare fraud whistleblower cases look like a mere appetizer to 2010's main course. Recent news reports seem to confirm that bleak outlook, revealing multiple hospital operators and other healthcare companies targeted by whistleblowers. Here are just a few examples:

  • Naples, Fla.-based hospital chain Health Management Associates has been accused by a former hospital executive of using money, free rent and trips on private jets to get Medicare referrals from physicians, reports Health News Florida.
  • Covington, Ky.-based pharmacy services provider Omnicare is under investigation for violating Medicare and Medicaid rules due to a suit filed by the company's former vice president of internal audit, reports the Business Courier of Cincinnati.
  • Gibson General Hospital in Princeton, Ind., is waiting to learn whether the federal government will join a lawsuit brought by its former CFO that the hospital conspired with a physician-owned ambulatory surgery center to bill Medicare fraudulently, reports the Evansville Courier & Press.
  • Dallas-based Tenet Healthcare Corp. has received documentation requests from the Department of Justice to determine whether one of its hospitals incorrectly billed Medicare for heart defibrillator implant surgeries, according to Reuters.

Notice something three out of those four cases have in common? Senior executives starring in the role of whistleblower. Common wisdom holds that whistleblowers are likely to be disgruntled doctors, nurses and lower-level managers who want to strike it rich. Indeed, "you can't stop someone from having that lottery mentality," Matthew Webb, senior vice president at the U.S. Chamber of Commerce's Institute for Legal Reform, told Bloomberg.

Senior executives could want to roll the dice for a rich payout themselves. More likely, they understand the need to exhibit strict standards of professional ethics during a period of increased government scrutiny targeting executive as well as corporate conduct. In either case, healthcare providers need to realize that eyes are literally everywhere now. And clearly, OIG executives weren't kidding when they advised healthcare organizations to institute a culture of compliance with a strong compliance program at last month's Regional Health Care Fraud Prevention Summit in Miami.

A strong compliance program has already come to the aid of Philadelphia-based Mercy Health System, part of Catholic Health East. Mercy recently agreed to pay the federal government $7.9 million after voluntarily disclosing that between Oct. 1, 2001, and Sept. 30, 2007, its hospitals improperly billed Medicare for one-day inpatient hospital admissions that should have been coded as observation stays. While Mercy had to repay millions, the system was able to avoid entering a corporate integrity agreement with the Office of the Inspector General thanks to its self-audits and voluntary disclosure. Something to think about. - Caralyn