Home Health & Hospice Week

With qui tam suits breaking out all over, now is the time for a compliance checkup.

The number of whistleblower lawsuits involving durable medical equipment suppliers is growing--and if your company fails to take compliance seriously, you too could find yourself on the wrong side of a qui tam action.

Attorney Neil Caesar, president of the Greenville, SC-based Health Law Center, recently has seen an upswing in whistleblower lawsuits involving DME. Attorney Jeffrey Baird with Brown & Fortunato's Amarillo, TX office, says he too has noted an increase in the number of qui tam cases crossing his desk.

"It used to be the worst thing a fired employee could do would be to file for unemployment," Baird tells Eli. "But now they know they can go to an attorney and report fraud."

The federal False Claims Act and some similar state laws allow private citizens to file what are known as qui tam lawsuits against companies on behalf of the government. The growing use of such suits against DME suppliers and other health care providers represents the ongoing outsourcing of fraud enforcement to the private sector, Baird observes.

The U.S. Department of Justice, HHS Office of Inspector General, Federal Bureau of Investigation and state enforcement agencies have a limited number of staff dedicated to DME fraud, he notes. So the government keeps pressure on fraudsters by providing financial incentives for disgruntled private citizens to report wrongdoing.

The incentives are considerable: The government can collect as much as $11,000 per each false claim, which can quickly add up to millions of dollars. The whistleblower usually gets 15 to 20 percent when the government intervenes in a suit and 20 to 25 percent when the government stays out.

The federal government's interest in DME fraud is nothing new: The HHS Office of Inspector General has included DME in its work plans for about 15 years now, Caesar notes. But the government has become even more aggressive with DME in recent years as illustrated by the 2003 launch of the wheelchair anti-fraud campaign dubbed Operation Wheeler Dealer.

"The government perceives that the DME industry is one of the sectors in health care that is most in need of embracing compliance--not because DME suppliers are evil, not because they consciously want to see how much they can get away with, but because they don't pay attention," Caesar says.

Help Employees Express Compliance Concerns

The first step a supplier needs to take to stave off potential whistleblowers is to create an effective compliance program. Unfortunately, that's something too many DME companies fail to do.

"It's my perception that most DME suppliers do not have compliance plans in place," Caesar says. "They may have specific policies about specific issues, but my guess is only about half of those have written policies, and probably only a fifth of those have a comprehensive program that deals with all of the relevant policies."

Let go of compliance myths: One reason for DME suppliers' reluctance to embrace compliance programs is a mom-and-pop mindset--the mistaken idea they're too small or too rural to merit attention from whistleblowers or government fraud fighters, Baird and Caesar say.

Furthermore, many suppliers wrongly think of compliance strictly as a cost center. "They should view compliance the same way they would view insurance--as a necessary expenditure rather than an optional luxury," Caesar advises.

Opt for tailor-made programs: The compliance plan shouldn't be something a DME company simply buys off the shelf; it should be a "living, breathing program," says Baird. "That way in those rare cases when a company does mess up, the program can serve as a trip wire so staff can quickly rectify the problem," he adds.

Besides detailing company policies, a comprehensive compliance program should designate a compliance officer, create an anonymous hotline to allow employees to report compliance concerns and bring in an outside firm to audit the billing and documentation systems at least annually, says Baird.

DME companies also must establish good relationships with their employees. After all, employees who like their employers are much less likely to file lawsuits against them, notes Baird.

"Whistleblowers are made, not born," observes Caesar. "The company's attitude toward people who ask questions or point out problems is key to whether they are going to seek redress--and whether they're going to seek it with the company or with the government."