By C. Timothy Gary and Kerry Hart
The complexities of today’s health care compliance environment are as steep as they are aggressive. That is to say, they are very steep and very aggressive. The Department of Justice obtained more than $3.5 billion in settlements and judgments from cases involving fraud and false claims against the government in Fiscal Year 2015. And more than half (54 percent) of those recoveries, or $1.9 billion, came from companies and individuals in the health care industry alone. Indeed, the industry is in the crosshairs of federal scrutiny.
With this type of pressure felt by compliance officers, health care executives and other industry stakeholders, there are competing powers at play. First, there is an extraordinary need to perform processes, like billing, correctly. But, there is also a fear of discovery—learning that an organization, even one acting in good faith to comply with regulations, may have missed the mark on the processes and thus exposing an organization to risk of severe penalties.
While ignorance may be bliss in some situations, burying a head in the sand only adds to the risk exposure in the health care sector. However, there is a basic legal principal that allows both proactive auditing (and non-compliance discovery) and confidentiality protection to coexist—the attorney/client privilege.
Legal privilege, compliance strategy
Attorney /client relationships are a safe place to discuss legal issues safe from the risk of having those communications being exposed later. While true, this special privilege creates value well beyond the justice system. In addition, the attorney work product privilege extends those protections to research and analysis performed either by the attorney, or at the direction of the attorney by staff. The privileged nature of these communications and follow on works are essential in compliance investigations. When the appropriate protocols are maintained, the information is bound by law to remain confidential. That is, an attorney, and staff working at the attorney’s direction cannot divulge the information to anyone without the client’s explicit approval. In addition, as long as the appropriate protocols are maintained, the information is inadmissible in court.
So consider a Medicare/Medicaid billing audit. Attorneys and professionals with expertise in this arena, working at the direction of the attorneys involved, can perform the audit, discuss results, suggest action plans without risk of having any employee or third party receive sensitive information—or become required by a court to disclose that information. This is an important contrast to whistleblower statutes that can make the disclosure of suspected billing discrepancies a very lucrative temptation to staff and third parties operating without this protection.
The limitations of confidentiality agreements
One might ask—aren’t confidentiality and non-disclosure agreements designed to do the same thing?
Yes and no.
While parties are legally bound to uphold the non-disclosure parameters as agreed upon in these documents, a court order essentially renders them useless. A judge can require someone to share information an organization intended to keep away from the public—and away from opposing counsel. Again, with attorney/client privilege, that is not the case.
Of course, attorney/client privilege and the attorney work product privilege may not be necessary for every compliance-facing consulting need. These privileges should also be considered with price, experience and reputation when vetting consultants and advisors. However, this special relationship can be an excellent tool for driving compliance without fear of learning new information—especially if there is any risk for any type of litigation to stem from findings.
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Timothy Gary is CEO and Kerry Hart is COO of DW Franklin Consulting Group, a Nashville, Tenn.-based full-service health care firm providing business, regulatory and government relations consulting services to the health care industry. Mr. Gary is also an attorney with Dickinson Wright PLLC. Learn more by visiting www.dwcfg.com and www.dickinson-wright.com.