Promoting Helplines May Increase Internal Reporting of Wrongdoing

More employees are coming forward through the company helpline or in person when they believe something may be wrong, according to the results of a survey conducted by the Health Care Compliance Association (HCCA) and the Society of Corporate Compliance and Ethics (SCCE) to determine whether the increased attention paid to whistleblowing had led to increased reporting of incidents.

Helplines, in the Beginning and Today

As Richard Kusserow, Strategic Management LLC, Chief Executive Officer, explained in the chapter he wrote for the Health Care Compliance Professional’s Manual, titled “Hotlines and Compliance Communications,” helplines (also known as hotlines) have “become a critical part of any effective compliance program as an important avenue of communication that permits employees to report sensitive matters outside the normal supervisory channels. It allows transmission of information concerning violations of regulations, laws, and proper business and billing practices, etc.” According to Kusserow, “[s]ocial and political factors in the 1960s and 1970s have led to active encouragement to surface complaints to company management, regulators, and media. Interest in employee hotlines has been growing fast in the last decade as result of a number of government initiatives, court cases, and realization by business organizations that employees may have something of real value to share with senior management.”

Although HCCA and SCCE noted that the incentives for whistleblowers provided by the federal government through such legislation as the Sarbanes-Oxley Act and the qui tam provisions of the False Claims Act, encourage employees to circumvent internal reporting; HCCA and SCCE believe that such laws helped provide incentives for employers to promote their helplines and provide assurances that they can safely report concerns on helplines or directly to management or the compliance department. A note in the survey pointed out that an increase in the volume of calls to the helpline may not indicate an increase in issues. Rather, an increase in the volume of calls to the helpline may be the result of “a greater awareness of the helpline and increased trust in the compliance department, which lead employees to feel more comfortable raising issues.”

Survey Results

After comparing the results of the April 2014 survey to the results of a similar survey conducted in 2011, HCCA and SCCE concluded that employees are more likely to raise concerns through helplines and to management or compliance officers and seem to prefer reporting incidents internally. The 677 survey respondents consisted of compliance and ethics professionals in the HCCA and SCCE database. The following represents the key findings:

  • Although 51 percent of the all respondents reported that the volume of calls to their helplines has remained unchanged over the last two years, 37 percent of the respondents reported that the volume of calls has increased somewhat over the last two years.
  • 58 percent of all respondents reported an increase in incident reporting via all means, including the helpline, directly reporting to supervisors, and visits to the compliance office.
  • The vast majority of respondents, 70 percent, reported that the percentage of calls reported anonymously has stayed the same.
  • Although 39 percent of all respondents reported that anonymous reports were reported to be substantiated at about the same rate as nonanonymous reports, 35 percent of respondents reported that there were substantiated less often, while 17 percent did not know and 9 percent thought they were substantiated more often.
  • Only 6 percent of all respondents reported an increase in whistleblower claims against the company. Although the “data indicates that companies are not seeing a dramatic spike in qui tam lawsuits;” it was noted that suits may have been filed that are still under seal.

“Businesses appear to be reaping the benefits for encouraging their employees to report wrong doing,” according to a press release issued by HCCA and SCCE. “The vast majority of employees are willing to give the company a chance to find and fix problems,” said Roy Snell, HCCA and SCCE Chief Executive Officer.  The results of the survey indicate that employees trust that their employers will “respond to issues when they are formally reported.”

Implications for Employers

According to HCCA and SCCE, in light of the survey results, “it is crucial for organizations to respond effectively and expeditiously to the increased employee reports of wrongdoing.” Employees who report wrongdoing “may quickly lose faith in their employers and turn to outsiders, including qui tam attorneys and the government,” if employers do not communicate effectively with such employees by failing to respond promptly and not considering the allegations.