New Year, Old Issues

January 14, 2008 at 3:18 pm 1 comment

If you ever need a reminder of why you’re spending your time working in compliance and monitoring, all you need to do is scan two emails, HCCA’s This Week In Corporate Compliance and Society of Comporate Compliance and Ethics’ E-Corporate Compliance News.   With each edition, you’ll see example after example of the exposure unethical business partners create.  

One of the recent articles highlights conviction of a physician who accepted kickbacks for using specific products during surgeries.    Strikingly, the criminal issue that convicted him isn’t the kickback itself, but rather the recovery of funds paid by Medicare and Medicaid after the physician filed reimbursement claims.   

This situation clearly demonstrates the intersection of compliance monitoring with supply chain management.   Here you have a case of apparently unmanaged physcian preference purchases intersecting with unethical behavior.   How was the physician able to make these purchases outside the hospital’s contracts?  If the physician had been unable to make those purchases, could the fraud have been prevented?  

Another interesting twist to this case is that the whistleblower wasn’t a member of the physician’s or hospitals’ staff, but rather a former medical-device salesperson.   How much would it be worth to you to have the type of relationship with your vendor representatives that they would come to you first with this type of information? 

Our Take:  It’s the close relationship between vendor management and vendor compliance that continues to intrigue us.   Just as the gangsters of the 1920s were taken out of business on tax evasion charges rather than criminal charges, we have the opportunity to use vendor and materials management processes as the tool to help reinforce vendor ethics. 

Entry filed under: materials management, vendor compliance.

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