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Whistle-Blower Termination

DILEMMA

Recently, I was terminated as vice president for a health services organization. My “crime” was reporting to the CFO my discovery of erroneous financial savings figures, created by the medical director. These financial reports had been submitted to a major client on a chronically ill population within their membership.

In order to receive three months of severance pay (I had only been with the organization three months), I had to sign a document that no legal action would be taken on my part against the organization. I have no interest in pursuing any legal action on my behalf, for many reasons. However, I do have a grave concern with regard to the patients this type of erroneous reporting may affect.

Here is the scenario: If an HMO is led to believe that a disease management program, which they have outsourced to a health services organization, is effective, as demonstrated by financial savings, it is very likely that no other type of intervention at the patient level will occur. This false belief, that patients are actually benefiting from the program, and therefore need no further attention could possibly exacerbate the chronic illness.

Are there any means for protecting these patients in some way? Simply alerting the HMO that erroneous numbers have been reported, may call into action a patient “follow-up” initiative that would identify any worsening conditions.

A former East coast health care executive

RESPONSE

Sorry to hear that you were terminated, especially under these circumstances. The scenario in which you find yourself is tricky and unenviable. Your motives in pursuing further action seem pure, which is a good place to start.

It is important however to have all of the facts before proceeding. We would hope (perhaps naively) that the efficacy of a disease management program would not be judged by the demonstration of financial savings alone. Health related outcomes are usually measured too. This is not to say that good patient outcomes would justify the false reporting of numbers. A good general rule to follow when reporting fraud is to go through “internal” sources first. Alerting the HMO seems like a reasonable step to take. If an unsatisfactory response is attained, turning to external sources such as a state level medical board or attorney general’s office should be considered.

I don’t know if coming forward violates the items covered in your severance agreement. You may be covered under some type of whistle-blower protection law, such as that under Sarbannes-Oxley. If not, taking a morally courageous stand may entail sacrificing principal for the sake of principle.

Kenman Wong
Professor of Ethics, School of Business and Economics
Seattle Pacific University

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