Four Out of Five Organizations Under 1,000 Employees Overpay for Their Hotline

Richard P. Kusserow | July 2017

By Richard Kusserow, former HHS Inspector General and CEO of Compliance Resource Center. Reprinted from Wolters Kluwer‘s Kusserow on Compliance Blog.

It is estimated that over 80 percent of health care organizations with fewer than 1,000 employees overpay their hotline vendor. The reasons for this vary. For large scale vendors, higher overhead may cause difficulty scaling down their prices; smaller vendors may just be trying to wring out every dollar they can. Another problem among vendors is that some provide both answer-operated and web-based reporting systems, while others do not. This variance in level of service is a complicating factor. At any rate, only vendors that provide full-range coverage that offers live-operator answering, 24 hours a day, seven days a week, along with web-based reporting, should be used. For both services, anonymous reporting must be an option.

Fair pricing rates. Today, all health care organizations are cost-sensitive and seek reductions anywhere they can, without loss of quality of service. The general rule of thumb for the price of hotline vendor services for organizations under 1,000 employees that provide both operator-answered and web-based reporting system is that the rates for services should range from around a low of $500 per year to $1,000, depending on employee population. Keep in mind set-up costs for a new service, as well as the continuing service fees. For an organization with greater employee populations, the service rate should not exceed $1 per employee per year. Those paying higher rates may want to investigate alternative providers to save expenses.

Recent trends in hotline reporting. Carrie Kusserow, a hotline expert with experience gained from running hotline vendor services and managing hotlines as a compliance officer, reports a significant increase in reporting rates on hotlines. She attributes this to a variety of factors. There has been increased promotion of reporting suspected violations by government agencies and compliance officers, coupled with whistleblower protection laws and regulations. Most organizations now have developed compliance programs that mirror the compliance guidance provided by the HHS Office of Inspector General (OIG). Over time, this has taken hold and become standard operating practice. This guidance emphasizes the need for organizational commitment to ensuring confidentiality and to those reporting problems, in addition to offering anonymity for those desiring it. Kusserow quoted Compliance Resource Center reports of a significant trend in the health care sector of an increase in the percentage of anonymous hotline reports, with about three out of four now being submitted that way. In addition, Kusserow explained that compliance officers have become more professional in responding to and investigating complaints and allegations they receive. This, in turn, has encouraged employees that their reporting will be taken seriously. Furthermore, compliance training has reinforced the employee’s duty to report problems.

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Jillian Bower Concepcion, of the Compliance Resource Center, has identified another factor contributing to the increase in reporting: the addition of new avenues of communication. As a new generation of technically savvy employees entered the workforce, more employees feel more comfortable using web-based reporting tools; that is becoming the preferred method in increasing numbers. She notes there has been an increasing percentage of employees who prefer submitting their hotline report through web-based systems, when given that option. Today, the percentages reported through a live operator and via the web have reached near parity. As such, it is important the vendor offer the web-based option, and those that do not should not be used. The end result of all these changes is that the OIG’s advocacy of organizations developing alternative compliance communication channels is a reality.

About the Author

Richard P. Kusserow established Strategic Management Services, LLC, after retiring from being the DHHS Inspector General, and has assisted over 2,000 health care organizations and entities in developing, implementing and assessing compliance programs.