Ten Critical Elements for a Successful Compliance Hotline Program
Date Posted: Friday,
May 06, 2016
Hotlines are an extremely effective, though relatively inexpensive, component of a successful compliance program by increasing the detection of fraud through "tips." The importance of this cannot be understated as frauds detected by tips were identified 50% more quickly and were 41% less costly to resolve as compared to frauds detected by other methods. In addition, companies with hotlines detected frauds half of the time through "tips," whereas companies without hotlines only detected fraud through tips a third of the time (for additional details, see the 2014 Report on Occupational Fraud and Abuse prepared by the Association of Certified Fraud Examiners).
But to get the full measure of the benefits that a hotline can bring, it is important that it be implemented properly and with regard for those who might use it. Following is a list of ten critical elements common to all successful compliance hotline:
Employees should be able to provide their tips of wrongdoing anonymously. While all companies should strive to have open lines of communication, it is important to recognize that many employees will only be willing to provide tips if they can do so anonymously. Indeed, the previous study found that 60% of "internal" fraud tips were reported anonymously.
2. Confidentiality: It is important to avoid the risk in conflating anonymity with confidentiality; these are separate but equally important considerations. An employee might give his or her name to demonstrate the information is trustworthy, but still wish to remain anonymous. Similarly, the identity of an anonymous informant may become known during the course of the investigation or simply because of the information provided. Regardless, it is critical for tipsters to feel comfortable that the company will do all that it can to protect the confidentiality of their role and the information they provided.
3. No retaliation. Companies must emphasize that retaliation against employees who make whistleblower reports are against the law, against company policy and will not be tolerated under any circumstances. The fear of retribution is a real and potent deterrent, and it will adversely affect the effectiveness of any reporting process unless there is sufficient trust in a company's whistleblower processes. It is not insignificant that there are numerous Federal and State whistleblower protections, but employees still need to be made to feel that the company understands and honors them.
4. Company Policy Comes From the "Top": In order to have a successful program, there must be a culture in which employees believe that tips, and the persons that provide them, are valued, and that there is support for the reporting of unethical or unlawful conduct. This can only happen if there is strong support for the program from the owners and upper management. One of the best ways of accomplishing this is by management responding quickly and effectively to hotline calls and other tips.
5. Access: The goal is to have open lines of communications, and while anonymous hotlines may be the preferred method of communication for some, employees or others should have other choices such as internal hotlines, email, anonymous boxes, or regular meetings in which "issues" are discussed.
6. Management and Operation by Respected Third Party: Employees generally question whether internally maintained hotlines will, or even can, protect confidentiality and anonymity and many will only report to or through independent third party providers. Outsourcing also benefits employers by demonstrating a commitment by management while lessening the burden on employees otherwise tasked with the job. In addition, they have experienced and trained personnel, established protocols, and they can often be engaged at reasonable rates.
7. Follow Up: The manner in which complaints are handled is critical as employees need to feel that their complaints are, or will be, addressed timely and aggressively and are not going to be ignored.
8. Audit: Hotlines should evaluated on a regular basis measuring how calls are handled in terms of confidentiality, accuracy and timeliness. This should be done with 3rd party vendors or internal hotlines to ensure that the hotline is operating as intended. Third-party providers generally have more experience in managing whistleblower calls and can assist in analyzing whether it is effective.
9. Education: Another means that management has of supporting the hotline is through training and the dissemination of materials that educates employees on the processes and their protections
10. Keeping Your Eye on the Prize: The goal of a hotline program is to create an environment where issues are identified early and resolved quickly. Thus, management should consider taking steps to work jointly with employees to find ways to increase support and participation in the program.
The sooner an issue is recognized, the sooner it is fixed, the less the fix will cost, and the less likely it is that you will find out about the problem after someone from law enforcement knocks on your door! So follow these tips and support your hotline.
About the Author
Paul Weidenfeld is noted health care lawyer and co-founder of Exclusion Screening, LLC who has written and spoken extensively on a range of health care fraud and abuse issues. Now in private practice, Paul served as the Department of Justice Health Care Fraud Coordinator from 2005 - 2007 and as a Federal Health Care Prosecutor in New Orleans for ten years prior to that.