How should compliance officials deal with whistleblowers?

Effective compliance programs give employees an anonymous way to report potential violations, and consistently follow up on all tips received. In a webinar titled “Do You Know What To Do When the Whistle Blows?” and presented by the Society of Corporate Compliance and Ethics (SCCE) and the Health Care Compliance Association (HCCA), Michael Moore, a former U.S. Attorney for the Middle District of Georgia currently with Pope McGlamry, explained best practices for investigating whistleblower complaints.

The False Claims Act (FCA) (31 U.S.C. §3729) allows a whistleblower with knowledge of fraudulent claims submitted to the federal government for payment to file a qui tam action on behalf of the United States and share in any recovery as relator. The most common types of health care fraud include lack of medical necessity, billing for services not rendered, and violations of the Anti-Kickback Statute (42 U.S.C. §1320a-7b) or Stark law (42 U.S.C. §1395nn). Life sciences fraud can also include kickbacks, off-label marketing, and failing to disclose adverse events to the FDA. Moore noted that, although relators get a larger share of recoveries when the government does not intervene in the suit—25 to 30 percent, versus 15 to 25 percent when the government does intervene—recoveries overall are generally much larger when the government intervenes, giving the relator a larger award.

When an aggrieved employee comes forward as a potential whistleblower, the compliance department’s response can make a difference for the organization. Often, Moore said, the employee wants to be heard, have his or her concerns recognized, and believe that something will be done about the problems he or she identified. Routine compliance training, a non-retaliation policy, and implemented written standards and procedures are all hallmarks of effective compliance programs. Practically speaking, compliance departments should do the following when confronted by a complaint:

  • evaluate the credibility of the allegation;
  • appoint an independent, objective “designated person” to respond to the investigation;
  • avoid taking retaliatory action against the potential whistleblower;
  • determine the timeline and scope for the investigation—the involvement of the government is an important component for this determination; and
  • consider self-disclosure, if the investigation discovers conduct that may give rise to FCA liability.