Assume nothing

Monday, May 24, 2010

Q. I have just discovered a key employee has cut corners with critical documentation. What do I do?

A. Most of us have heard horror stories of companies that conducted internal audits, found discrepancies, contacted the appropriate payer to arrange repayment, only to hear that the report triggered Health and Human Services (HHS) to pillage them. With that said, I can assure you how a company treats the offending employee will carry weight with HHS.

My company was under investigation in 2001. Two years later, HHS investigators showed up unannounced to interrogate the store manager of my least dynamic store. During the course of the interview, she admitted to committing fraud.

 The investigators convinced her to give me very limited information. While she told me she completed blank portions of a signed CMN, she actually forged doctor's signatures in about five instances. Therefore, I wrongly assumed the doctors actually ordered the equipment. I told her we could send a revised CMN to the doctors with a note of explanation believing that would satisfy everyone. Had I jumped on that task immediately, I would have discovered the gravity of the situation and taken different steps.

One month later, the same investigators interviewed me. I got the impression my explanations satisfied them. Huge mistake. In hindsight, I wish I would have hired an outside billing consultant and a healthcare attorney. Too expensive? Not as expensive as the fines, legal fees, and prison sentence I incurred. hme

Frank Margulis is president of Margin Consultants LLC. Reach him at