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Compliance: Dealing with a fraud allegation

October 31, 2013
by Dennis Grantham, Editor-In-Chief
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Building a culture of compliance can really pay off when it comes to trouble, such as an allegation of fraud. There are only two ways to hear about such allegations: directly from an employee or whistleblower, or indirectly from a federal, state, or other payer official who has been contacted by a whistleblower. Either way, the process is essentially similar: launch an investigation, get all the facts, disclose all of the facts, then uncover and correct the root cause of the problem. Hearing about a possible problem internally gives the compliance officer and agency the chance to proactively “self-disclose” an error to enforcement officials and, when necessary, to return any payments associated with an erroneous or potentially fraudulent transaction.

“Having your own ‘self-disclosure’ policy enables you to get far better treatment from the OIG or state agencies,” says Fabio van der Merwe, director of quality improvement and compliance officer for the DeKalb Community Service Board (Atlanta, Ga.). Being willing to disclose an error, return a questionable payment, or correct an inadequate procedure or safeguard in advance of any investigation offers powerful evidence of a healthy and active compliance program, demonstrating the kind of efforts that lets officials know that your organization’s house is in order. A great way to enforce and strengthen a climate of self-disclosure is for compliance personnel to conduct audits using the same rules as outside Medicaid or other enforcement personnel would use. This might include periodic comparisons of individual treatment records with outbound claims for payment. “If we discover issues or overpayments, we will pay them back.”  

Except for the surprise of receiving a “notice” letter from a payer official, the process of responding to an external allegation of fraud – one that has been made to enforcement officials first – is essentially similar. But in this case, enforcement officials have considerably greater leverage in the situation, since they will make the final determination. The only solution here is to get out in front, demonstrate complete cooperation, and be as proactive as possible. If you have had a good compliance program in place, chances are good that you’ll already have established relationships – and a reputation for honesty and fair dealing - with payer and enforcement officials. In a really tough situation, this can make all the difference for your organization.

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