HOW WILL I KNOW? AN AUDITING PRIVILEGE AND HEALTH CARE COMPLIANCE [Dagger]
INTRODUCTIONHealth care in America is in a state of transformation. The rise of technology is transforming the doctor patient relationship,1 the Affordable Care Act is transforming the way health care is provided and paid for,2 and the focus on quality of care is transforming the way health care is measured.3 However, throughout this time of change, the desire to create an efficient, affordable, and effective health care system has remained constant.One way to improve efficiency, affordability, and quality in our health care system is to ensure all health care entities4 have robust compliance programs. Compliance with federal regulations promotes efficiency and affordability because it protects against wasteful or fraudulent spending; compliance also improves quality by streamlining disease management systems, reducing medical malpractice incidents, and improving data privacy.5 One crucial component to compliance programs is compliance audits; auditing provides a comprehensive review of a health care entity's compliance program, including evaluation of compliance policies, identifying and managing risk, and recognizing areas for additional personnel training.6However, the recent rise of False Claims Act (FCA) enforcement has stifled efforts to promote robust internal compliance audits because health care entities fear these types of audits are discoverable in potential future litigation.7 This Comment argues that the current lack of privilege for compliance audits creates an unnecessary barrier to improving health care costs and quality. Because the predicted quality improvements facilitated by a privilege outweigh the need for the information to be discoverable in potential future litigation, Congress should legislate a privilege for compliance auditing.Health care entities have much to fear in potential future litigation due to the government's zealous enforcement of the FCA.8 The FCA was enacted after the Civil War and creates liability for anyone who submits a fraudulent payment claim to the government.9 Since that time, the FCA has grown in complexity and has been utilized to enforce multi million dollar penalties and settlements against health care entities for submitting such fraudulent payment claims.10For most FCA violations, actual knowledge of a violation is not required to establish liability.11 While intentional fraud continues to occur, the government12 is also aggressively enforcing the FCA against unintentional mistakes that result in FCA liability.13 As a result, a hospital entity may be subjected to enormous penalties for a violation it had no knowledge of, regardless of good faith efforts to comply with the complex array of regulations.14Unintentional violations are distinctly different from intentional fraud because unintentional violations are often the result of negligence, confusion in a statute's application, or simply a difference in interpreting a regulation.15 Because of these complexities, compliance programs provide important ongoing oversight to reduce negligence and confusion, as well as to identify areas of problematic interpretation.While the threat of liability is a powerful incentive for health care entities to avoid both intentional and unintentional violations, aggressive enforcement and huge penalties are unlikely to be as effective for unintentional mistakes as for intentional fraud.16 Unlike intentional fraud, unintentional acts are likely to be conducted by entities already trying to comply with the law.17 Without ongoing compliance oversight, it is likely that unintentional FCA violations will continue to occur, costing the government and ultimately the taxpayer.18However, while it is critical for health care entities to institute robust compliance programs, the current adversarial relationship between the regulated entities and the government regulators impedes this goal. Although health care entities already spend significant resources on compliance programs,19 health care providers remain fearful of reporting potential violations to compliance officers because health care providers continue to view such officers as adversaries.