Corporate attorneys have to act fast to minimize legal exposure for their organizations when they get word of potential improper conduct.
I recently attended the Association of Corporate Counsel’s annual meeting, and a panel of attorneys said failing to handle improper conduct quickly can lead to severe repercussions, including being excluded from Medicare and Medicaid by the Health and Human Services Office of Inspector General.
After receiving a report of alleged misconduct, an in-house counsel may opt to discuss it with the chief executive officer. If the CEO decides to take no immediate action, an in-house counsel has a few options, Lawrence Vernaglia, a health-care attorney with Foley & Lardner LLP in Boston, said.
The in-house counsel can report the alleged misconduct to the board of directors, to the OIG, or resign their position, Vernaglia said. Prosecutors will say there's no de minimis standard for wrongdoing, Vernaglia said, so in-house counsel shouldn't ignore the alleged misconduct simply because the CEO asked them to go no further.
The OIG has processed 37 self-disclosure settlements in 2017, through mid-October.
When an employee reports a potential issue to an in-house counsel, it's critical to provide them with what's called an Upjohn warning, Karen Litsinger, a senior vice president of operations and general counsel at Mirixa Corp., a health-care technology and services company in Reston, Va.
An Upjohn warning refers to a 1981 Supreme Court cases in which the court said a company could invoke attorney-client privilege to protect any discussions between in-house counsel and employees.
Litsinger said it's important to remember that in-house counsel represent the company, not the employee.
Providers who uncover potential wrongdoing can self-disclose to the OIG through the self-disclosure protocol, which provides them a chance to settle for a smaller penalty than would likely occur with an official investigation and civil or criminal litigation.
An effective compliance program is essential in mitigating or even preventing misconduct. For example, the panelists discussed a hypothetical situation in which an employee logged into a company's computer system using someone else's credentials.
This type of behavior is evidence of a weak compliance program and a lack of employee training, Litsinger said.
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