Why Hospitals Need Corporate Compliance Programs and How We Implemented Ours: Lessons from the Front

Abstract

Hospitals are now more than ever at risk of being prosecuted for federal law violations under the False Claims Act, 31 U.S.C. § 3729-3733. Specifically, the Qui Tam provision of the act allows private citizens to initiate false claims actions in the name of the government. In 1988, only 1 percent of Qui Tam cases pertained to health-care fraud. They now account for 46 percent and continue to increase.

With increased exposure to risk of prosecution, an effective compliance program is the best way for organizations to prevent unauthorized or unintended conduct and greatly reduce risk. An "effective" corporate compliance program is a program that has been reasonably designed, implemented and enforced so that it is effective in preventing and detecting criminal conduct.