Best Practices for Health Care Organizations Regarding Whistleblowers.

Some health care organizations may be attempting to use expanded confidentiality and non-disclosure agreements to restrict whistleblower activity within their company.  Such agreements are aimed at preventing their employees from disclosing sensitive operational data and confidential employee and patient information.  Compliance experts, however, note the risks that this type of activity poses to an organization.  These experts caution that health care employers should never try to impede employees from reporting suspected legal and regulatory violations, whether through agreements with current employees or through separation agreements when an employee is departing the organization.

The Department of Justice (DOJ) and other enforcement agencies frown upon the use of confidentiality agreements to block individuals from reporting wrongdoing.  These agencies view any attempt at hiding legal wrongdoing as potential obstruction of justice or conspiracy to conceal a crime, for example.  Using confidentiality agreements to deter whistle blowing also undermines a company’s possible defense argument claiming absence of knowledge when enforcement agencies discover fraud, negligence, and other wrongdoing. Despite such risks, many organizations require employees to sign confidentiality agreements to prohibit them from reporting information to outside authorities.  In some cases, employees must sign agreements that require notification to the organization’s legal counsel before disclosing any information to outside parties.  These types of policies in employee separation programs create a circumstance where employees risk losing severance pay and benefits, if they intend to, or become, a whistleblower.  As a result, employees may feel threatened or unable to report suspected wrongdoing.  Serious legal repercussions could result from such actions.

The “Whistleblower Law”

Compliance Officers may be familiar with the False Claims Act Qui Tam provisions, often referred to as the “Whistleblower Law”.  These provisions provide significant financial incentives for those reporting fraud to the DOJ.  Over the years, the Whistleblower Law has become a major source of cases for the DOJ.  Further, a majority of Corporate Integrity Agreements with the Department of Health and Human Services (HHS) Office of Inspector General (OIG) are based upon successful cases brought by Qui Tam “relators”.

Similar laws providing incentives and financial rewards for reporting wrongdoing are less known and understood.  These laws also contain provisions against any efforts to impede employees from reporting wrongdoing.  Several federal laws and regulations prohibit organizations from deterring employees from reporting suspected wrongdoing or cooperating with investigators.  Some examples include the Whistleblower Protection Act, the Affordable Care Act, the Consumer Product Safety Improvement Act, the FDA Food Safety Modernization Act, the Sarbanes-Oxley Act, the Civil Rights Act of 1964, and the Dodd-Frank Wall Street Reform and Consumer Protection Act.  Additionally, an organization’s Human Resources personnel may be familiar with examples of these laws, which at times may involve provisions relating to the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Department of Labor, and the Securities and Exchange Commission.  Similar state laws and regulations also exist for these purposes.  These laws generally provide that employers may not discharge or retaliate against an employee because the employee has filed a complaint or otherwise exercised any rights provided to employees.  Many of these laws go further by creating a risk of legal action for any organization interfering with an employee’s right to report suspected legal or regulatory violations.  Accordingly, health care organizations should develop best practices to protect themselves from these federal and state legal risks.

Best Practices for Whistleblower Policies

Best practice tips for health care organizations regarding whistleblowers include the following:

• The Compliance Office and Human Resources Management (HRM) should work together to ensure that there are no practices or documents, especially those related to severance and confidentiality agreements, intending or appearing to block employee reporting of legal violations to outside authorities.
• The Compliance Office and HRM should ensure that employment agreements do not have any language that could be interpreted as impeding employees from reporting to or cooperating with duly authorized government enforcement agencies. In addition, the employment agreement should: 1) communicate that the agreement does not limit the employee’s ability to file a charge or complaint with any federal, state, or local governmental agency or commission; or 2) limit the employee’s right to communicate with any government agency or otherwise participate in any investigation or proceeding that such an agency may conduct, including providing documents or other information, without notice to the company.
• Compliance Officers and HRM should direct particular attention to confidentiality agreements to ensure that they do not prohibit reporting of legal violations to outside authorities.
• Whistleblowers should be channeled internally to the Compliance Office, or to the organization’s compliance hotline to report suspected violations or wrongdoing. This is not only best practice, but is consistent with the OIG, DOJ, and U.S. Sentencing Commission’s guidance.  It is also better to channel these concerns through methods such as a hotline to resolve them internally, rather than having concerns reported externally, which may result in a government agency overseeing the process.  Offering this line of compliance communication also reinforces that employees have a duty to report suspected wrongdoing, and can do so without fear of retribution or retaliation.

The organization’s Code of Conduct, compliance policies, and all compliance training programs should promote this communication channel and clarify that employees have both a duty and right to report wrongdoing and legal violations.