As health care costs have risen, so have the number of whistle-blower lawsuits alleging Medicaid and Medicare fraud. The government is making it easier and easier for hospital employees to report suspected fraud with national and state hotlines. It is also wooing hospital employees with promises of large rewards to those who report alleged fraud.
The good news for hospitals is that research shows that despite these actions by the government, employees prefer to resolve their concerns internally. Research by the nonprofit Ethics Resource Center found that 84 percent of whistle-blowers who reported a compliance concern outside their company first reported the concern internally. It was only after the employer failed to address the concern satisfactorily that the employee reported the concern to a third party.
Research into Whistle-Blowing
A 2013 study by the Ethics Resource Center examined the hotline reporting experience of 612 employees at five companies. Perhaps the most significant finding of the study was that "the primary factor influencing the degree of acceptance was whether or not the reporters felt the procedure used to handle their report was fair." In looking at this finding more closely, the researchers found that "reporters indicated that the quality of decision-making was slightly more important to acceptance than the quality of the personal treatment they received, but that positive perceptions of both of those elements contributed to acceptance."
Notably, the study also evaluated how employees react when their report is not substantiated or when they do not know the outcome of the investigation. In both instances, the employees' perception that the review process was procedurally fair was a "critical influence in shaping acceptance and outweighs outcome favorability." That finding is significant in the context of internal workplace investigations where confidentiality concerns often preclude an organization from sharing any disciplinary decisions that may have resulted from the concerns or complaints made by the employee.
In the study, the employees who called the hotline were asked questions intended to test the reporter's perception of the fairness of the procedures used in the process, the fairness of the personal treatment of the reporter, and the reporter's overall view of the fairness of the report handling procedure. The researchers used a regression analysis to determine the influence a favorable outcome had on the employee's perception of procedural fairness. Not surprisingly, employees who viewed the outcome of the investigation as favorable were more likely to accept the outcome. What was surprising was that whether or not the investigator substantiated an employee's complaint had little impact on the employee's perceptions of the process.
Four Keys to Procedural Fairness
These findings are consistent with more general social psychology research of procedural fairness. According to research by Tom R. Tyler, professor of law and psychology at Yale Law School, four key aspects determine whether a person will accept a decision-making process as procedurally fair:
Voice — People want to have the chance to tell their side of a story and in their own words to the decision-maker.
Neutrality — People want to feel that the decision-maker is making the decision based on facts and rules and not the decision-maker's own personal opinions. They also want to feel that the rules are applied consistently.
Respect — People want to feel that their concerns are taken seriously by the decision-maker and that they are treated with respect when they raise their concerns.
Trust — People want to feel as though the decision-maker is listening to them and considering their views. They want to feel that the decision-maker is trying to do what is right for everyone involved and is acting in the interests of the parties and not in his or her self-interest.
Tips for Hospital Leaders
Now that a disgruntled employee can, with a few key strokes on social media, share his or her complaints with the world, prudent hospital leaders, risk managers and human resource professionals are working hard to give their employees a clear way to report workplace concerns internally. They are implementing investigation protocols to ensure that allegations of workplace misconduct such as fraud are investigated promptly, thoroughly and impartially. They understand that a strong internal investigation protocol is a critical step toward encouraging employees to keep concerns internal. They don't want their employees to feel that the only alternative is to take to social media, to call one of the government's fraud hotlines or to contact an adversarial attorney.
In light of the this research on procedural fairness, prudent hospital leaders also are providing their risk managers, management teams and HR professionals with training on how to present procedural fairness effectively to reporting employees. As we all know, perception is reality, and increasing a perception of procedural fairness further increases the likelihood that a reporting employee will accept the outcome of an internal workplace investigation.
Lorene F. Schaefer, Esq., is the managing partner at Win-Win Resolve in Atlanta.