Hospital administrators and physicians who run a private practice along with any other organization that operates within the health care industry likely knows the importance of compliance with federal regulations. A failure to follow these regulations can result in serious financial penalties and even allegations of criminal wrongdoing potentially leading to prison time.
It is good business practice to use a compliance officer to help better ensure the organization’s operations are in line with these regulations. But what happens when the compliance officer fails to meet this expectation — or worse, files a False Claims Act (FCA) against the very organization they were hired to protect?
Can compliance officers really file claims against their employer?
Before we delve into the fallout, let’s take a step back and explain how this can happen. The government allows those who work within an organization to file a whistleblower claim if they have evidence or suspect a violation of federal regulations like the FCA.
If the claim is successful, that whistleblower will get a portion of any funds the government receives from the lawsuit. This leads to a financial incentive for workers to file these claims.
In a recent case, a compliance officer filed a whistleblower claim for an FCA violation against the hospital where she was employed. She stated the organization intentionally up coded claims to Medicare, VA health benefits and other programs.
How does this type of issue unfold?
The former compliance officer states that during an audit she discovered a “shocking” number of errors that included upcoding 88% of certain Medicare claims. She claims executive leadership ignored her findings. At this point, she took the findings to the government.
The hospital ultimately chose to settle the claim and has agreed to pay the government over $3 million in fines.
What can other health care organizations learn from this case?
It is important that health care organizations not only have compliance officers in place but make changes as needed to better ensure compliance with applicable regulations when an audit leads to concerning information.