Six Ways to Reduce Risk of Employee Turning ‘Whistleblower’ Against Your Lab

The False Claims Act is the government’s most successful fraud enforcement tool, especially since whistleblowers—individuals who bring suspected fraud to the government’s attention—are able to receive up to 30% of the money recovered from the violator. The Department of Justice obtained a record $5.69 billion in settlements and judgments from fraud and false claims cases in fiscal year 2014, $2.3 billion of which involved fraud against the federal health care programs. Most of the cases, called qui tam actions, were initiated by whistleblowers who received $435 million out of the recoveries, according to the Department of Justice’s announcement. The number of qui tam suits filed in 2014 exceeded 700 for the second year in a row. This does not even include the number of qui tam actions that whistleblowers file where the government opts not to join or “intervene” in the lawsuit and take over the investigation. All providers, including labs, are at risk of becoming a defendant of a whistleblower lawsuit, and their frequency seems to be increasing. For instance, a dermatology practice and related dermatopathology laboratory operating in Georgia agreed in April to pay the United States more than $3.2 million plus interest to settle allegations they violated the False Claims Act by engaging in improper financial relationships with some of its employed physicians and improper billing for dermatopathology analyses performed by the lab. The litigation was brought by three physician whistleblowers, who will receive more than $584,000 from the recovery for their efforts. The April 2015 settlements with Health Diagnostic Laboratory and Singulex for $48.5 million also stem from whistleblower lawsuits. (See “HDL, Singulex Agree to Settle AKS, FCA Charges for $48.5 Million,” G2 Compliance Advisor, April 2015, p. 1.) The Department of Justice has not made public the amount that those whistleblowers will receive from the recovery amounts. “Whistleblowers are the government’s police,” notes David Zetter, president of Zetter Healthcare Management Consultants in Mechanicsburg, Pa. and a member of the National Society of Certified Healthcare Business Consultants (NSCHBC). Most whistleblowers, also called “relators,” are current or former employees (or otherwise affiliated with the provider, such as a contractor or business partner) who become frustrated or disgruntled and take action accordingly. “Providers need to treat everyone as a potential whistleblower,” says attorney Scott Grubman, former U.S. assistant attorney now with Chilivis, Cochran, Larkins & Bever, LLP, Atlanta, Ga. Since whistleblower suits alleging violations of the False Claims Act are filed under seal, a lab may not know for months or even years if someone has filed one against it. By the time the lab learns about it, the investigation into its operations may be nearly complete.
Six ways to keep an employee from blowing the whistle on your lab You’re much better off avoiding and preventing a whistleblower suit than defending one.  Luckily there are some steps you can take to reduce this risk: #1. Make sure employees and others have an opportunity to communicate compliance concerns. An employee who can raise a concern and have it investigated by the lab internally is less likely to feel ignored and feel the need to take further action, says Zetter. You can use a locked suggestion box, an “open door” culture and other methods to encourage communication. “One of the best investments a provider can make is a compliance hotline. I think this makes employees feel that their concerns matter, it forces providers to evaluate potential problems early on, and it looks good to the government, if you wind up getting on its radar anyway,” says Grubman. #2. Investigate the concern being raised. Don’t ignore a billing, patient safety or other concern that’s been brought to the lab’s attention. If a problem does exist, correct it. It’s a lot harder for a whistleblower to prevail if you can show that you took the concern seriously and took action to fix it, says Grubman. #3. Make sure to get back to the person reporting, if known. You don’t have to necessarily inform the person of the nature or result of the investigation (and in some instances you won’t want to, since some actions, such as employee discipline, are confidential) but at least communicate that you’re addressing the issue, says Zetter. If you don’t, that person is less likely to report a problem the next time—or report it elsewhere to a more sympathetic ear. #4. Keep an eye out for unusual employee activity. For instance, employees who are unusually inquisitive about issues not within their job responsibilities or come in after hours or on weekends may be gathering documents and other information to back up a qui tam action. #5. Conduct employee exit interviews with employees leaving employment, and ask about any compliance concerns. If the employee states that he is unaware of any issues, document that response, to reduce the risk that the employee may turn around and become a whistleblower—since he has claimed he knew of no compliance issues. If the employee does raise a compliance concern, the lab needs to investigate it, says Zetter. #6. Be careful about terminating someone who has complained or brought an issue to the lab’s attention. This is especially true if the employee feels that the lab didn’t adequately address the complaint. The employee may be vindictive, and may take his complaint to the government. “Don’t fire or discipline someone just because he or she brought a potential issue to your attention. Not only will this drastically increase the chances that the person will become a whistleblower, but it is illegal retaliation under the False Claims Act,” says Grubman. Takeaway: Labs should be on alert that private citizens can file a lawsuit claiming the lab has improperly billed the federal health care programs in violation of the False Claims Act. Make sure that your lab has an effective compliance program to reduce the risk that any improper billing is occurring and to correct it if detected.