In this episode, host Stacey Richter speaks with Ann Lewandowski about whistleblowing in the healthcare industry, focusing on a significant case involving a whistleblower at an employee benefit consultant (EBC) firm. This EBC allegedly pocketed their clients' pharma rebates, violating the Consolidated Appropriations Act of 2021.
The discussion highlights the nuances of being a whistleblower, the ethical dilemmas faced, compliance challenges, and the significant financial implications for companies and individuals involved in illegal activities.
Ann Lewandowski provides insights into documenting and protecting oneself legally and discusses the broader context of trust and transparency in the healthcare sector.
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08:10 What does it mean to be a whistleblower?
09:05 What’s happening in the current whistleblower case about pharma rebates?
14:24 What are the disclosure requirements, and how does this affect contracts in healthcare?
15:05 EP379 with AJ Loiacono.
15:11 The 5500 form.
15:36 EP397 with Paul Holmes.
16:46 Why having a “defensive health plan” is important.
17:31 Matt Ohrt’s post about healthcare’s soul.
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Episode 476.
"Talking Whistleblowing and thePharma Rebates Whistleblower Case
with an Actual Whistleblower."Today I speak with Ann Lewandowski.
American Healthcare Entrepreneurs andExecutives You Want To Know, Talking.
(00:25):
Relentlessly Seeking Value.
Alright.
First off, let me calm down.
Any attorneys right outta the gate here.
We will not be talking about at allthe legal activity that is currently
ongoing that my guest today, AnnLewandowski, is involved with.
The suit mostly on our radar todayis the one where an EBC, employee
benefit consultant, allegedly had 61%of their revenue coming from pocketing
(00:52):
their clients' pharma rebates andusing said clients' pharma rebates
to fund their executive bonus pool.
Doing all this, not transparently,IE, none of their clients were
aware that this was going on.
It was not disclosed as per theconsolidated Appropriations Act of 2021.
(01:13):
So these EBCs clients were,one would assume plan sponsors
like self-insured employers.
Of course, this pocketing of the rebatesamounted to allegedly $27 million.
Nice executive bonus poll they gotthere, I guess would be one comment.
Anyway, allegedly when the whistleblowerwho happened to be at the time this
(01:34):
employee benefit consultants complianceofficer, when he, you know, did his thing
and sounded the alarm and said, Hey,gang Consolidated Appropriations Act.
We gotta disclose this compensation weare earning from, you know, pocketing
our clients' pharma rebates and all that.
It's the law of the land.
Well, a couple things wentdown at that point, but yeah.
EBC executive team winds upultimately firing their compliance
(01:58):
officer i.e. the whistleblower.
We gotta be opaque as hell, Ibelieve is the alleged quote.
So this case has all the things.
It's a violation allegedlyof the CAA Consolidated
Appropriations Act legislation.
It's got retaliation,it's got self-dealing.
It's got a lot of WTH's permile, as they say, allegedly.
(02:19):
Right about now, I am going to mentionthat Peter Hayes, last week on this
podcast talked about how regulationslike the CAA are a major force
colliding with two other major forces,transparency and public outrage.
So three major forces combiningto shake up the status quo.
(02:41):
And maybe this whole pharmarebates getting disappeared
case is a great example of thisactually allegedly happening.
We got all three of these forces,outrage, transparency, and regulations
revealing allegedly one giant swirl coneof cluster F'ery that could certainly
(03:01):
inspire even the most uninspired plansponsor to take a serious look into their
brokers or PBMs or TPAs or other vendors.
At least do some level of auditing there.
So there's that.
But also to me, the big takeaway circlesback once again to this trust touchstone
that, again, keeps coming up in lots ofRelentless Health Value episodes lately.
(03:26):
And it's just a really big reminder thattrust isn't just for patients and their
doctors, and it's not just for cliniciansand their administrators or leadership.
It's also for plan sponsorsand their advisors.
Although distrust is the problemwith everybody else I just mentioned.
In this particular instance, theproblem isn't a lack of trust.
(03:46):
It's often too much of it.
Plan sponsors often really trusttheir longtime EBCs or TPAs and yeah.
Sometimes it's warranted.
Sometimes it's not.
Brutally not.
Kimberly Carlson the other day.
She wrote, "14.5 million is being returnedto self-funded health plans after the
(04:08):
Department of Labor found that the TPAhad been pocketing undisclosed markups."
She continues, "But your premiums arestill rising today because behavior like
this hasn't stopped. This isn't just aboutone TPA or one EBC. It's a warning shot."
So yeah, this whole goings on with thispharma rebates disappearing lawsuit.
(04:28):
Is a warning shot on several levels.
One is just, how many millions ofdollars can go missing on its way
from point A to member's wallets.
But another level of warning shotis more personally, self-interested
in nature because the thing aboutwhistle blowing is that it's only
possible when there is a scent of aillegal activity wafting in the air.
(04:52):
And if that bad smell turns out to beverifiable by the DOJ or DOL or courts
of law , at that point, personally,you can either be the whistleblower
or be on the other side of the table.
And being on the other side ofthe table could mean millions of
dollars in fines or even jail time.
We talk about that generic drugmanufacturer collusion whistleblower
(05:14):
case a little bit later on in theshow today, where the CEOs are facing
possible prison and there's millionsof dollars in fines also, just.
BTW.
So all of this and more comes up todayin my conversation with Ann Lewandowski.
I mean, if you had the chance totalk about whistleblowing with a
whistleblower, you would've donethe same thing in my shoes, right?
Talk about whistle blowingwith someone who has made the
(05:35):
decision to be one herself.
And it is a truly difficult choice.
It takes just such firm conviction andcommitment to doing the right thing.
As Ann has written, she wrote, "Wheneversomeone sees what appears to be illegal
actions without saying something, it meanspeople are protecting the status quo".
(05:57):
The problem, as Ann wrote,that the penalty that can arise
for whistle blowing is real.
So we need more voices so that thosespeaking up cannot be silenced.
In other words, this is me paraphrasing.
It's hard as heck to be a whistleblower,which we discuss and we also get
into how to make the choice towhistleblower, how to do it safely.
(06:18):
Basically, you know what to considerthere, but also not to get into a damned
if you do, damned if you don't territory.
Because the risk of choosingnot to whistle blow if you see
illegal activity is also real.
There are plenty of cases, again,referring back to that generic
collusion case is just one of them.
(06:39):
There are plenty of cases where awhistle got blown by someone and others
on the team face the penalties of that.
Hi, this is James Gelfand president andCEO of the ERISA Industry Committee.
If you love the Relentless HealthValue podcast as much as I do and
you want to help support the program,be sure to follow and leave for
(06:59):
review on Apple Podcast or Spotify.
Thanks so much for listening.
Alright.
Let me land this plane bysaying in sum, don't forget,
there's upsides whistle blowing.
Like you get a percentageof the dollars recouped.
Also, you're in the clear because noone else is gonna blow the whistle
first, and then you find yourselfon the wrong side of the table.
(07:21):
But for sure there's downsides.
Today as aforementioned, I amspeaking with Ann Lewandowski.
Ann Lewandowski is a nationallyrecognized award-winning healthcare
executive with extensive experience.
Most listeners probably know herlast name at the very least, from
the Lewandowski versus Johnson andJohnson case that came out last year.
Ann does a lot of work withplan sponsors and others.
(07:44):
Links to Ann's work andwebsites are in the show notes.
There will be another show, it's gonna bea summer short with Ann Lewandowski, where
we're gonna dig in on pharma rebates.
More kind of, I'd say the lessintuitive ins and outs afoot there.
My name is Stacey Richter.
This podcast is sponsoredby Aventria Health Group.
(08:06):
Ann Lewandowski, welcometo Relentless Health Value.
Thanks, Stacey.
I'm so pleased to be here.
There was just a whistleblowerlawsuit that was filed.
It's a pretty well knownterm, whistleblower, but
just what's the short on?
What's a whistleblower?
So a whistleblower is somebody whocomes forward, publicly, right?
(08:27):
You can do it internally as well,but typically once you become an
actual whistleblower, you've goneto an external source and said.
There's some sort of activity thatdoesn't feel right and allege some
sort of wrongdoing within the company.
Within the company theywork for most of the time.
Yeah.
(08:48):
I took a couple classes on complianceand healthcare compliance and what
the company was say is you're airingtheir dirty laundry in public.
The government would say, you'redoing the right thing and making
sure all the laws are followed andpeople are doing things legally.
So those are sort of the two differentperspectives that you'll find.
So let's talk about this actual lawsuit,which is a whistleblower lawsuit.
(09:10):
What is going on very specificallyin this one, which by the
way, has to do with rebates.
This entire complaint, andit's, it's pretty long.
And this person was very committed.
He was in a compliance role.
In a compliance role, you arereally trying to check the
boxes and make sure that yourcompany is doing the right thing.
(09:30):
You start to see this tension betweenhis role in compliance and some
of the other executive officers.
He is trying to say, let's beconsistent with the Consolidated
Appropriations Act and disclose to ourplan sponsors the rebates that we get.
It was an employee benefit consultantthat this individual worked for
in a compliance role, on behalfof their plan sponsor client.
(09:54):
They were collecting from thePBMs, the pharmaceutical rebates.
They also had a third party administrator.
My understanding is this reallycenters on the actions of the
third party administrator portionof the benefits consulting group.
Essentially, he's being theJiminy Cricket, uh, of the
(10:15):
company is saying, Hey guys.
There is this new law, theConsolidated Appropriations
Act, it's the law of the land.
It's requiring these disclosures.
We need to release our rebate information.
Then you see pushback from within thecompany saying, We're not gonna do that.
It represents approximately61% of our revenue.
(10:36):
Whoa.
Wait, wait.
So there was an employeebenefit consultant.
Where 61% of their revenue waseffectively keeping some percentage
of their plan sponsor, employerclients, pharmaceutical rebates.
It gets worse actually, Stacey.
According to the allegations, not onlywas this more than 50% of their revenue.
(10:58):
It was also allocated fortheir executive bonus pool.
Their executive bonus.
Okay, so they're keeping, withoutdisclosing as required by the
Consolidated Appropriations Act.
Alright.
Yep.
They're keeping the rebate or someportion of it and using it to pay a
bonus to the people who are decidingto keep the rebate and not disclose it.
(11:20):
Yeah.
Say the first lawyer I ran thisby is an old mass tort guy.
He wrote the book literally on, ontorts and you know, basically torts
are bad behavior in civil contracts.
And he was just like, Annyou've gotta be kidding me.
This is like classic self-dealing.
And I was like, I wish I could tellyou I was kidding, but I'm not.
(11:42):
I think no matter who you are when you'repurchasing something, you really don't
want your vendors to be self-dealing.
This Jiminy Cricket compliance personkeeps trying to get his company to
see, we have to at least tell people.
Well, he's the compliance person, so thisis really on him, like this is his job.
(12:05):
Absolutely.
He eventually does discloseto a plan sponsor, like these
are rebates, and he was fired.
So you have not only the whistleblowerportion of coming forward and
saying there is this bad behavior.
This group was not potentiallycomplying with the Consolidated
Appropriations Act of 2021.
(12:27):
But when I tried to do the rightthing, they actually retaliated
against me and terminated my position.
Now, I think there's a really interestingquestion that's going to come up
here, and that's according to theDepartment of Labor's 401k guidance,
if you request a vendor disclosureand the vendor does not disclose, then
(12:48):
you can't contract with them becauseessentially you're in this position
with or not acting potentially legally.
So I think the real question for methat I is gonna be very interesting
is what happened to those clients thatasked for disclosure and didn't get it.
Because basically what you'resaying is if they asked and
(13:08):
this entity was just like, nah.
Then it's on the plan sponsor as afiduciary of their plan to be like, whoa.
This doesn't smell right, likethis does not pass the sniff test.
I'm gonna fire this vendor who clearlywe've got some trust issues with them.
Yeah.
The question is, doesthat raise a trust issue?
(13:30):
Right.
Because often these are very,very trusted relationships.
But the DOLs crystal, crystalclear in the 401k space.
A plan sponsor can choose to continue thecontract until it's done, but it cannot
decide to have a new contract, right.
And that's probably because the DOLis pretty reasonable but you know, if
(13:52):
you're having trouble getting thesedisclosures, then you know, you're put
on notice and you need to start takingthose steps to get a compliant vendor.
Well, I guess for this particularcase, I'm not exactly sure whether
they did a 5500 like filled one outand just these rebates weren't on it.
So if the plan sponsor went back andsaid, oh, I need my 5500, and the
(14:13):
this EBC was like, sure, here you go.
And it was just missing stuff.
That's different than if the plansponsors asking for 5500 and the
EBC was like, nah, don't think so.
Yes, and, the disclosure requirementsare actually, you can tell what the
compensation is for, and you needto have it for total compensation.
(14:33):
For example, you are coming tome and I'm, I'm EBC here, and I'm
like, oh, I get money for PEPM.
I get a prescription fee, I get anaudit fee, I have rebate dollars,
and I put zero there, then I've lied.
But if I just say, I may get somethird party compensation from
these pharmaceutical companies, orPBM that I think is questionable.
(14:57):
And I think we're going to seethat come up more and more as, is
that an appropriate disclosure?
This is something actuallythat AJ Loiacono talked
about when he was on the pod.
He's just like, youneed your own template.
For these 5500 forms, which arethe disclosure forms that the
Consolidated Appropriations Act, theCAA requires plan sponsors to get.
(15:21):
And, the point that AJ madeis use your own template.
Don't take your employee benefitconsultants because, and now I'm
understanding exactly why with threeunderlines, because your employee
benefit consultant, if they are upto no good, potentially they may just
put this kind of squishy language.
Paul Holmes talked about this also on ashow a while back, where if you've got
"May from time to time, take marketingand third party", blah, blah, blah,
(15:44):
like they're gonna have a statement onlike that, which basically covers them.
Whereas if you're doing your owntemplate, you put a line item like
black and white quantitatively, howmuch are you taking from rebates?
Answer the question.
Because then that companyhas a hard choice to make.
If they are doing things which they'renot disclosing, they have to choose
whether they're gonna disclose oractively in black and white lie.
(16:07):
What I would say is, finda good ERISA attorney.
Get that initial template,run it by them, make sure that
they're very comfortable with it.
Not being an ERISA attorney,I can't offer guidance, but
there are some that are better.
And then I think what I've heard froma very good friend is the disclosure
she receives is a slide that says wemay receive third party compensation.
(16:31):
Deal with it, kind ofto your point, right.
And that to me does not feel adequate.
But again, I'm not an ERISA attorney.
So I would say if that's the situationyou're in, definitely explore it.
Look for good examples out there.
We talk about defensive medicinea lot, and this starts to feel
like defensive health plan.
(16:53):
Like are you checking all the boxesand making sure that things are
really in line before you decideto move forward with this vendor?
There's a lot of money at play here.
It wasn't just a couple of bucks.
It was, as you said, 61% of thatemployee benefit consultant's revenue.
And I think it was like $27 million.
(17:13):
Was it?
It's a lot of money.
If they had been disclosingit, that's one thing.
If you're not disclosing it, and thenyou've got plan sponsors who are trusting,
that just showcases this pervasive.
One of the things I've been keepingan eye on lately is just the number
like Matt Ort just wrote the otherday, a post that was something
(17:34):
like Healthcare has lost its soul.
Dr. Eric Bricker wrote aboutjust the profit motives and the
lack of spirit in healthcare.
Michelle Bernacki wrote a post abouthow healthcare has lost its heart.
We're talking about old or sick ordisabled people's lives, and it's
come down to trying to maximizefinancial transactions often at
(17:55):
best, at worst, doing it in waysthat call forth a whistleblower.
I was thinking of Matt, as you werethink is saying all that, right, and
Matt and I are both in Wisconsin.
We see each other quite a bit andI consider him a very good friend.
And the thing that I love that hesays is have a trusted partnership.
The challenge is many people thinktheir partnership is based on trust.
(18:21):
And, they're not verifying.
I think that's really where, you know,we need to have this trust and verify
or, practice defensive plan sponsorshipso that everybody is really safe.
And you do actually have thattransparency that does lead to trust.
Trust, but verify.
What's that one, Deming?
(18:42):
I think it was Edward Deming.
"In God, we trusteveryone else bring data."
Yeah, exactly.
And it's a really tangled web becausethere could be EBC employee benefit
consultants, where there's corporateto corporate deals, which an individual
consultant may not know about.
Like if two companies at thecorporate level make a deal.
Of course ultimately it could meanthat the EBC or the TPA third party
(19:05):
administrator is incented to makerecommendations that may or may not be
in the plan sponsor's best interest.
Like you often hear about PBMs,you know, kind of backing up the
truck and dumping money on someEBC executive suite's doorsteps.
It's not directly connected withany particular book of business.
It's just kind of a corporateto corporate understanding.
(19:26):
But then of course it does becomekind of odd when you see almost every
single one of any given EBCs clientsadvised to use that particular PBM.
So it, I don't know how possible itis for any given plan sponsor to get
ahead of some of this gamesmanship.
But at the same time, being naivethat this is going on is kind
(19:46):
of not an option these days.
Some of these big companies, theyhave, I don't think a hyperbole to say
that they have platoons of lawyers.
Perhaps we will get to the point, andJennifer Stanley's a really good friend
of mine and she's like, Hey, whatare the best contracts in the world?
These are the oil leases down in Dallas.
Because every single word in thosecontracts has been litigated.
(20:09):
And I could see a world wherethat's the case for healthcare too.
But right now we're sort of in thisinfancy stage there, and there are
like act like a five-year-old, right?
Like, ask the questions, why, why?
One of the things I'm trying tobring to the market are things that
are, sort of this trust and verify.
(20:31):
I have a, sort of schema, a risk map of,Hey, have you gotten all of these things?
At least check the box right.
Or my data analytics partner hasa data map that plan sponsors
can start visualizing that data.
Where's the spend going?
What's happening here?
As you collect more data, anddata we verify that happens
(20:51):
in other areas of purchasing.
And we've just not quite donethat level of due diligence
on our health plan side yet.
That is cogent advice for plan sponsors.
To do everything that you justsaid, ensuring you're verifying.
It's not like this is thefirst day at the rodeo, right?
Like as you said there you have a map thatplan sponsors could take advantage of.
(21:14):
It's really important to be doingthat right now to play, as you said,
it's not defensive medicine, it's likedefensive plan sponsoring relative
to this case that we're talking aboutwhere the allegedly this employee
benefit consultant was pocketing, youknow, the 61% of their revenue was
coming from their clients unknowingly.
Right.
In an unreported way.
(21:35):
In brief, what's the status there?
What's happening right now?
Interestingly enough, this wasoriginally filed in a Maryland state
court, and it's actually been removedto federal court because it deals
with ERISA, which is a federal law.
The Department of Labor has alsotaken an interest in this and is
working with plaintiff's counsel.
(21:56):
It will be very interesting to seehow the Department of Labor works
with plaintiff's counsel and startsto analyze and look at this case.
I am watching that piecereally, really closely.
And plaintiff is the whistleblowerthe compliance person.
Yeah.
What do you think makessomeone become a whistleblower.
(22:17):
Like, there's a difference between, ugh,my company, you know, dot, dot, dot.
And I complain over beers anddeciding to take this step.
Like, what goes through your head?
It goes back to that quote that you seethe results of somebody's decisions, but
you don't see the choices that they had.
And I think in this case, in just thebrief rereading of the complaint, this
(22:38):
guy was in a really difficult spot.
He knew he had to disclose.
And his job was threatened ifhe did disclose and followed
the legal requirements.
He was in an absolutely no-win situationwhere he followed all of the right
paths, and I think that's, all of thepeople that I've talked to that have
(23:02):
concerns about their company havetypically followed the right ways of
dealing with them before going public.
And at some point you realizeI'm not getting anywhere.
I could be personally liable.
That's the Department of Justice'ssentencing guidelines that we were
updated in 2016 is it's not justthe company that can be liable.
(23:24):
Individuals within that company who haveknowledge of wrongdoing can be prosecuted.
So there was another really famous,actually whistleblower lawsuit that you
and I had been talking about earlierwith the generic drug manufacturers
where, I mean it is a hundred, it'slike a quarter billion dollars or
something like that where it's pricefix and colluding, all kinds of things.
(23:46):
There was a whistleblower that broughtthat case and there are CEOs of these,
there's people in these companies thatare being personally, you know, who sat
at that table doing the actual colludingand like they're facing jail time.
Potentially.
Yeah.
So there's this thing calledQui Tam lawsuit, and this
goes back to the Civil War.
(24:06):
And the government saying, if you'reovercharging the government, we want
to give people who are doing theright thing, basically a slice of
the pie, a slice of the recovery.
Depending on the knowledge and levelof sophistication with the DOJ, if
you come forward with wrongdoing atyour company, and say, by the way,
(24:27):
Medicare, Medicaid, whatever wasovercharged, and I can prove it, you
can actually bring your own lawsuit.
And the Department of Justice canchoose to either bring it up or not.
But then, you get a portion of that.
So it's really it, this incentiveto come forward in whistleblower.
Many people, they think of all thenegative facts that you know, oh,
(24:49):
I'm never gonna be employed again.
Oh, this is gonna crash my career or what.
They don't think, wow, like, I couldactually be okay coming forward
because of this provision now.
Qui Tam losses are being challengedas constitutional or not.
Maybe I'll have to come back and giveyou an update on that a little bit later.
I think the point that you'remaking is you can get people in
(25:10):
these companies that are being putin a really untenable position.
You use the rock in thehard place metaphor.
It's like either, if you just do asyou're told and somebody else whistle
blows, you're on the wrong side ofthat interrogation table, right?
Because like now you're aparty to this wrongdoing.
(25:31):
Whereas if you do whistle blow,then as you said, there's a lot
of thoughts to be thought through.
I have this theory that compliance issort of, an organization's immune system.
You can tell a lot byhow compliance responds.
Either you are embraced and you're treatedlike a vaccine or some sort of assistance,
(25:51):
and they're really gonna inoculatethemselves against this, any sort of
bad behavior, and maybe you even get abonus or a reward for coming forward.
Even if it's not a big thing.
Or as you see in this case, youbecome a total target and you
are basically swarmed like aninvader and tried to be eliminated.
(26:12):
You're saying you can tell a lot about acompany and the moral compass of a company
by what happens when someone who worksthere raises their hand and says, We are
doing something non-compliant right now.
Because there's twochoices as you just said.
One choice is, holy cow, thank you somuch for bringing this to our attention.
(26:34):
Let's fix this.
And all of a sudden processesthere, there is activity being
taken to fix whatever it is.
Or alternatively, exactly like in thisparticular case, you get fired for
bringing it up and or you get yelled at inmeetings and there's some crazy quotes in
this particular case about what happenedto this guy in meetings and stuff.
So two ways to go.
(26:55):
There's more subtlety usually.
Here are some thingsthat might be concerning.
We really act within the gray.
And we really explore the gray and goright up into that black or red line.
Any verbal instruction not to comply orgo to compliance would be a huge red flag.
(27:16):
Refusal to meet with legal orcompliance when you've identified or
raised a concern or needing to go toyour immediate supervisor or their
supervisor to get approval to do that.
And then if you're in compliance, anyattempt to keep you from reporting
to the board or board chair orthese people who are ultimately
(27:37):
responsible for the company, thoseare all things that I would, I would
document and definitely push back on.
I always return to the advicethat I received in my first job in
public service, which is, documentas much as you can and never
depend on others to protect you.
Kind of a cold, hard dose of water.
A document what you can, but don'texpect others to protect you.
(27:59):
That advice, it just,it feels very, uh, yeah.
Part of my Masters of Legal Studies isin compliance, and so conducting these
investigations, one of the things thatI really want employees to understand,
because I did not understand this, isthe issue of a corporate Miranda Rights,
and this is called an Upjohn warning.
(28:20):
If the company has identifiedwrongdoing, like in the case
of the generic manufacturers.
You'll be brought in.
You'll meet with their lawyers,and you'll receive what's called
an Upjohn warning, which says,these lawyers do not represent you.
They represent the company and at anytime the company may waive privilege
(28:41):
of anything you've said in order tomitigate their potential liability.
That is critical for every employeeto understand that the company
itself holds that privilege and theability to say to the Department
of Justice, Oh, we didn't do this.
This is just one bad actor thatwent against policy and procedure.
(29:02):
I really want people to understand that.
As you just said, there's no attorneyclient privilege that's going on here
because these aren't your attorneys.
No, they are not.
And that is an unfortunate state offact, but always keep that in mind
when your emails can be disclosed.
They tell you this.
(29:22):
I don't think people expect it, but justremember, you very much work for them.
So whistleblower advice.
One of the reasons why I was lookingforward to having this conversation
with you, Ann Lewandowski, is becausethere's just so much going on in the
healthcare industry that if you stickyour head up and look around, you
can see, and this is anything fromjust odd and suboptimal on one end
(29:49):
of the spectrum to legal, but prettyunpalatable in the, in the middle, right?
There's this whole gray area in the middleto on the other side, just like illegal.
If you are talking to somebodywho's looking around and seeing
any of these kinds of things, ormaybe is a little unclear what they
(30:11):
are seeing, what's your advice?
The first thing that you have to squarewith yourself is, we all have to live with
the consequences of our decisions, and wehave to look at ourselves in the mirror.
We have to be able to pay our mortgage.
Tell our spouse, kids, family,dog, whatever it is that we feel
(30:31):
we're making the right choice.
And balancing all ofthat is not easy, right?
That's, I think, is probablyone of the deepest, most
personal decisions we can make.
But I think if what youare feeling is discomfort.
I have learned that you have totrust your gut and really trust it.
It's not hyperbole to say, I would reachout to a lawyer and run it by them.
(30:55):
Right.
You know, I find that it's typicallyworth the $500 and to say to somebody
with the legal training to do the analysisand say, this is where you're gonna have
trouble, you need to protect yourself.
Because, if you look at these CEOs,right, like these are 10 million or more
dollar fines that they're now facing.
(31:17):
Imagine they had spent the personalmoney to go to a lawyer and say,
Hey, how does this look like?
Am I gonna get in trouble?
And so I think again,it's that thoughtfulness.
It's that defensiveness tomake sure that you really are
on the right side of things.
It sounds like you've gottwo pieces of advice here.
Mainly one of them is we all have to livewith the choices that we choose to make.
(31:41):
There was a show with Dr. JohnLee about cognitive dissonance
that I think is relevant.
Like there's so much going on in thehealthcare industry which is very
upsetting and listeners of this showare probably more familiar than most.
Sorry about that.
And we do not live in an ideal worldhere, so there's always gonna be stuff
that we don't agree with and that wecan see is not benefiting patients
(32:03):
or not being done in an ideal way.
However, there's a differencebetween if that bad stuff is legal.
Or not legal.
And when it's not legal, your advice isstep one, as you just said, document.
Document, because you're gonnaneed to protect yourself.
Like there's illegal stuff that's goingon in your vicinity, and somebody
(32:23):
else could wind up whistle blowing.
And then as we said, you're gonna beon the wrong side of the table there.
So document your stuff and go to a lawyer.
Yeah.
I mean, you need somebody with thatlegal training to really answer
the question, is this legal or not?
And, as we already covered, right,legal counsel for the company,
works for the company theirjob is to defend their client.
So I do think it's a very reasonablestep to go to your own lawyer and
(32:47):
say, what do you think of this?
Here are sort of the set of facts.
I'm concerned.
Am I gonna be okay?
That's a hard thing to do, but thenyou can get that very clear legal
advice from somebody who knows.
That I think that's probablyvery sound, especially if you are
working for one of those companies.
(33:09):
We talked about, there'stwo kinds of companies.
I mean, there's a lot kinds ofcompanies in the, in the middle, as
you said, like a lot of times thingsare done a little bit more subtly.
But like you are workingthere for a while.
You can tell whether you're workingfor a company that's really trying hard
to do the right thing or a department.
Sometimes it's not all at the corporatelevel, like it could definitely, there's
different cultures even within differentbranches of an organization or whatnot.
(33:31):
Another red flag would be, well, so andso said the wrong thing, and they're
not able to move up, or they've beensort of blackballed within the company.
That would be another prettymajor red flag that I would
be very concerned to hear.
I bet everybody listening right nowknows what kind of company they work for.
Like you've been therefor any amount of time.
There's just any number of things.
They're probably tiny little things, butthey all add up to, if I see something
(33:54):
wrong, I'm not gonna say anything.
And if that's someone's innate, like Iknow that that's the right thing to do.
It's not gonna go well.
Then, okay, we know what kindof company that we work for.
The next question is, is itunpalatable or is it illegal?
If it's illegal, then there'ssome choices that need to be made.
If it's not illegal, it's justunpalatable, then it becomes
(34:15):
more of a personal question.
How do we wanna deal with that so thatwe can feel good about what we're doing
I think it is really hard, right?
Because when you get backto the Department of Justice
sentencing guidelines.
You are required to have notjust a compliance program, but
an effective compliance program.
Having this negative responseto compliance is within
(34:38):
itself a really big red flag.
I think there is very much a graycontinuum of what is the tone at the top?
Are we embracing complianceor are we shunting it off?
Which is within itself a very big problem.
Ann Lewandowski, if someone isinterested in learning more about your
work or the plan sponsor complianceroadmap that you had mentioned
(35:02):
earlier, where would you direct them?
Reach out to me on LinkedIn,or you could reach out to me
at ann@patientvalueinsightsor patientvalueinsights.com
And we will put all of theselinks in these show notes.
Ann Lewandowski, thank you so much forbeing on Relentless Health Value today.
Thanks, Stacey.
It's been such a pleasure to join you.
Hi, I am Dr. Vivian Ho.
I'm a health economist at Rice Universityand Baylor College of Medicine.
(35:25):
I listen to Relentless Health Valuereligiously because this is the
show for those who are part of thetribe that wants to improve the
quality of healthcare, improve accessto care, and make it affordable.
So make sure that you subscribe tothe newsletter and subscribe to the
podcast and keep up with every episode.
Episode 476.
"Talking Whistleblowing and thePharma Rebates Whistleblower Case
with an Actual Whistleblower."Today I speak with Ann Lewandowski.
American Healthcare Entrepreneurs andExecutives You Want To Know, Talking.
(00:25):
Relentlessly Seeking Value.
Alright.
First off, let me calm down.
Any attorneys right outta the gate here.
We will not be talking about at allthe legal activity that is currently
ongoing that my guest today, AnnLewandowski, is involved with.
The suit mostly on our radar todayis the one where an EBC, employee
benefit consultant, allegedly had 61%of their revenue coming from pocketing
(00:52):
their clients' pharma rebates andusing said clients' pharma rebates
to fund their executive bonus pool.
Doing all this, not transparently,IE, none of their clients were
aware that this was going on.
It was not disclosed as per theconsolidated Appropriations Act of 2021.
(01:13):
So these EBCs clients were,one would assume plan sponsors
like self-insured employers.
Of course, this pocketing of the rebatesamounted to allegedly $27 million.
Nice executive bonus poll they gotthere, I guess would be one comment.
Anyway, allegedly when the whistleblowerwho happened to be at the time this
(01:34):
employee benefit consultants complianceofficer, when he, you know, did his thing
and sounded the alarm and said, Hey,gang Consolidated Appropriations Act.
We gotta disclose this compensation weare earning from, you know, pocketing
our clients' pharma rebates and all that.
It's the law of the land.
Well, a couple things wentdown at that point, but yeah.
EBC executive team winds upultimately firing their compliance
(01:58):
officer i.e. the whistleblower.
We gotta be opaque as hell, Ibelieve is the alleged quote.
So this case has all the things.
It's a violation allegedlyof the CAA Consolidated
Appropriations Act legislation.
It's got retaliation,it's got self-dealing.
It's got a lot of WTH's permile, as they say, allegedly.
(02:19):
Right about now, I am going to mentionthat Peter Hayes, last week on this
podcast talked about how regulationslike the CAA are a major force
colliding with two other major forces,transparency and public outrage.
So three major forces combiningto shake up the status quo.
(02:41):
And maybe this whole pharmarebates getting disappeared
case is a great example of thisactually allegedly happening.
We got all three of these forces,outrage, transparency, and regulations
revealing allegedly one giant swirl coneof cluster F'ery that could certainly
(03:01):
inspire even the most uninspired plansponsor to take a serious look into their
brokers or PBMs or TPAs or other vendors.
At least do some level of auditing there.
So there's that.
But also to me, the big takeaway circlesback once again to this trust touchstone
that, again, keeps coming up in lots ofRelentless Health Value episodes lately.
(03:26):
And it's just a really big reminder thattrust isn't just for patients and their
doctors, and it's not just for cliniciansand their administrators or leadership.
It's also for plan sponsorsand their advisors.
Although distrust is the problemwith everybody else I just mentioned.
In this particular instance, theproblem isn't a lack of trust.
(03:46):
It's often too much of it.
Plan sponsors often really trusttheir longtime EBCs or TPAs and yeah.
Sometimes it's warranted.
Sometimes it's not.
Brutally not.
Kimberly Carlson the other day.
She wrote, "14.5 million is being returnedto self-funded health plans after the
(04:08):
Department of Labor found that the TPAhad been pocketing undisclosed markups."
She continues, "But your premiums arestill rising today because behavior like
this hasn't stopped. This isn't just aboutone TPA or one EBC. It's a warning shot."
So yeah, this whole goings on with thispharma rebates disappearing lawsuit.
(04:28):
Is a warning shot on several levels.
One is just, how many millions ofdollars can go missing on its way
from point A to member's wallets.
But another level of warning shotis more personally, self-interested
in nature because the thing aboutwhistle blowing is that it's only
possible when there is a scent of aillegal activity wafting in the air.
(04:52):
And if that bad smell turns out to beverifiable by the DOJ or DOL or courts
of law , at that point, personally,you can either be the whistleblower
or be on the other side of the table.
And being on the other side ofthe table could mean millions of
dollars in fines or even jail time.
We talk about that generic drugmanufacturer collusion whistleblower
(05:14):
case a little bit later on in theshow today, where the CEOs are facing
possible prison and there's millionsof dollars in fines also, just.
BTW.
So all of this and more comes up todayin my conversation with Ann Lewandowski.
I mean, if you had the chance totalk about whistleblowing with a
whistleblower, you would've donethe same thing in my shoes, right?
Talk about whistle blowingwith someone who has made the
(05:35):
decision to be one herself.
And it is a truly difficult choice.
It takes just such firm conviction andcommitment to doing the right thing.
As Ann has written, she wrote, "Wheneversomeone sees what appears to be illegal
actions without saying something, it meanspeople are protecting the status quo".
(05:57):
The problem, as Ann wrote,that the penalty that can arise
for whistle blowing is real.
So we need more voices so that thosespeaking up cannot be silenced.
In other words, this is me paraphrasing.
It's hard as heck to be a whistleblower,which we discuss and we also get
into how to make the choice towhistleblower, how to do it safely.
(06:18):
Basically, you know what to considerthere, but also not to get into a damned
if you do, damned if you don't territory.
Because the risk of choosingnot to whistle blow if you see
illegal activity is also real.
There are plenty of cases, again,referring back to that generic
collusion case is just one of them.
(06:39):
There are plenty of cases where awhistle got blown by someone and others
on the team face the penalties of that.
Hi, this is James Gelfand president andCEO of the ERISA Industry Committee.
If you love the Relentless HealthValue podcast as much as I do and
you want to help support the program,be sure to follow and leave for
(06:59):
review on Apple Podcast or Spotify.
Thanks so much for listening.
Alright.
Let me land this plane bysaying in sum, don't forget,
there's upsides whistle blowing.
Like you get a percentageof the dollars recouped.
Also, you're in the clear because noone else is gonna blow the whistle
first, and then you find yourselfon the wrong side of the table.
(07:21):
But for sure there's downsides.
Today as aforementioned, I amspeaking with Ann Lewandowski.
Ann Lewandowski is a nationallyrecognized award-winning healthcare
executive with extensive experience.
Most listeners probably know herlast name at the very least, from
the Lewandowski versus Johnson andJohnson case that came out last year.
Ann does a lot of work withplan sponsors and others.
(07:44):
Links to Ann's work andwebsites are in the show notes.
There will be another show, it's gonna bea summer short with Ann Lewandowski, where
we're gonna dig in on pharma rebates.
More kind of, I'd say the lessintuitive ins and outs afoot there.
My name is Stacey Richter.
This podcast is sponsoredby Aventria Health Group.
(08:06):
Ann Lewandowski, welcometo Relentless Health Value.
Thanks, Stacey.
I'm so pleased to be here.
There was just a whistleblowerlawsuit that was filed.
It's a pretty well knownterm, whistleblower, but
just what's the short on?
What's a whistleblower?
So a whistleblower is somebody whocomes forward, publicly, right?
(08:27):
You can do it internally as well,but typically once you become an
actual whistleblower, you've goneto an external source and said.
There's some sort of activity thatdoesn't feel right and allege some
sort of wrongdoing within the company.
Within the company theywork for most of the time.
Yeah.
(08:48):
I took a couple classes on complianceand healthcare compliance and what
the company was say is you're airingtheir dirty laundry in public.
The government would say, you'redoing the right thing and making
sure all the laws are followed andpeople are doing things legally.
So those are sort of the two differentperspectives that you'll find.
So let's talk about this actual lawsuit,which is a whistleblower lawsuit.
(09:10):
What is going on very specificallyin this one, which by the
way, has to do with rebates.
This entire complaint, andit's, it's pretty long.
And this person was very committed.
He was in a compliance role.
In a compliance role, you arereally trying to check the
boxes and make sure that yourcompany is doing the right thing.
(09:30):
You start to see this tension betweenhis role in compliance and some
of the other executive officers.
He is trying to say, let's beconsistent with the Consolidated
Appropriations Act and disclose to ourplan sponsors the rebates that we get.
It was an employee benefit consultantthat this individual worked for
in a compliance role, on behalfof their plan sponsor client.
(09:54):
They were collecting from thePBMs, the pharmaceutical rebates.
They also had a third party administrator.
My understanding is this reallycenters on the actions of the
third party administrator portionof the benefits consulting group.
Essentially, he's being theJiminy Cricket, uh, of the
(10:15):
company is saying, Hey guys.
There is this new law, theConsolidated Appropriations
Act, it's the law of the land.
It's requiring these disclosures.
We need to release our rebate information.
Then you see pushback from within thecompany saying, We're not gonna do that.
It represents approximately61% of our revenue.
(10:36):
Whoa.
Wait, wait.
So there was an employeebenefit consultant.
Where 61% of their revenue waseffectively keeping some percentage
of their plan sponsor, employerclients, pharmaceutical rebates.
It gets worse actually, Stacey.
According to the allegations, not onlywas this more than 50% of their revenue.
(10:58):
It was also allocated fortheir executive bonus pool.
Their executive bonus.
Okay, so they're keeping, withoutdisclosing as required by the
Consolidated Appropriations Act.
Alright.
Yep.
They're keeping the rebate or someportion of it and using it to pay a
bonus to the people who are decidingto keep the rebate and not disclose it.
(11:20):
Yeah.
Say the first lawyer I ran thisby is an old mass tort guy.
He wrote the book literally on, ontorts and you know, basically torts
are bad behavior in civil contracts.
And he was just like, Annyou've gotta be kidding me.
This is like classic self-dealing.
And I was like, I wish I could tellyou I was kidding, but I'm not.
(11:42):
I think no matter who you are when you'repurchasing something, you really don't
want your vendors to be self-dealing.
This Jiminy Cricket compliance personkeeps trying to get his company to
see, we have to at least tell people.
Well, he's the compliance person, so thisis really on him, like this is his job.
(12:05):
Absolutely.
He eventually does discloseto a plan sponsor, like these
are rebates, and he was fired.
So you have not only the whistleblowerportion of coming forward and
saying there is this bad behavior.
This group was not potentiallycomplying with the Consolidated
Appropriations Act of 2021.
(12:27):
But when I tried to do the rightthing, they actually retaliated
against me and terminated my position.
Now, I think there's a really interestingquestion that's going to come up
here, and that's according to theDepartment of Labor's 401k guidance,
if you request a vendor disclosureand the vendor does not disclose, then
(12:48):
you can't contract with them becauseessentially you're in this position
with or not acting potentially legally.
So I think the real question for methat I is gonna be very interesting
is what happened to those clients thatasked for disclosure and didn't get it.
Because basically what you'resaying is if they asked and
(13:08):
this entity was just like, nah.
Then it's on the plan sponsor as afiduciary of their plan to be like, whoa.
This doesn't smell right, likethis does not pass the sniff test.
I'm gonna fire this vendor who clearlywe've got some trust issues with them.
Yeah.
The question is, doesthat raise a trust issue?
(13:30):
Right.
Because often these are very,very trusted relationships.
But the DOLs crystal, crystalclear in the 401k space.
A plan sponsor can choose to continue thecontract until it's done, but it cannot
decide to have a new contract, right.
And that's probably because the DOLis pretty reasonable but you know, if
(13:52):
you're having trouble getting thesedisclosures, then you know, you're put
on notice and you need to start takingthose steps to get a compliant vendor.
Well, I guess for this particularcase, I'm not exactly sure whether
they did a 5500 like filled one outand just these rebates weren't on it.
So if the plan sponsor went back andsaid, oh, I need my 5500, and the
(14:13):
this EBC was like, sure, here you go.
And it was just missing stuff.
That's different than if the plansponsors asking for 5500 and the
EBC was like, nah, don't think so.
Yes, and, the disclosure requirementsare actually, you can tell what the
compensation is for, and you needto have it for total compensation.
(14:33):
For example, you are coming tome and I'm, I'm EBC here, and I'm
like, oh, I get money for PEPM.
I get a prescription fee, I get anaudit fee, I have rebate dollars,
and I put zero there, then I've lied.
But if I just say, I may get somethird party compensation from
these pharmaceutical companies, orPBM that I think is questionable.
(14:57):
And I think we're going to seethat come up more and more as, is
that an appropriate disclosure?
This is something actuallythat AJ Loiacono talked
about when he was on the pod.
He's just like, youneed your own template.
For these 5500 forms, which arethe disclosure forms that the
Consolidated Appropriations Act, theCAA requires plan sponsors to get.
(15:21):
And, the point that AJ madeis use your own template.
Don't take your employee benefitconsultants because, and now I'm
understanding exactly why with threeunderlines, because your employee
benefit consultant, if they are upto no good, potentially they may just
put this kind of squishy language.
Paul Holmes talked about this also on ashow a while back, where if you've got
"May from time to time, take marketingand third party", blah, blah, blah,
(15:44):
like they're gonna have a statement onlike that, which basically covers them.
Whereas if you're doing your owntemplate, you put a line item like
black and white quantitatively, howmuch are you taking from rebates?
Answer the question.
Because then that companyhas a hard choice to make.
If they are doing things which they'renot disclosing, they have to choose
whether they're gonna disclose oractively in black and white lie.
(16:07):
What I would say is, finda good ERISA attorney.
Get that initial template,run it by them, make sure that
they're very comfortable with it.
Not being an ERISA attorney,I can't offer guidance, but
there are some that are better.
And then I think what I've heard froma very good friend is the disclosure
she receives is a slide that says wemay receive third party compensation.
(16:31):
Deal with it, kind ofto your point, right.
And that to me does not feel adequate.
But again, I'm not an ERISA attorney.
So I would say if that's the situationyou're in, definitely explore it.
Look for good examples out there.
We talk about defensive medicinea lot, and this starts to feel
like defensive health plan.
(16:53):
Like are you checking all the boxesand making sure that things are
really in line before you decideto move forward with this vendor?
There's a lot of money at play here.
It wasn't just a couple of bucks.
It was, as you said, 61% of thatemployee benefit consultant's revenue.
And I think it was like $27 million.
(17:13):
Was it?
It's a lot of money.
If they had been disclosingit, that's one thing.
If you're not disclosing it, and thenyou've got plan sponsors who are trusting,
that just showcases this pervasive.
One of the things I've been keepingan eye on lately is just the number
like Matt Ort just wrote the otherday, a post that was something
(17:34):
like Healthcare has lost its soul.
Dr. Eric Bricker wrote aboutjust the profit motives and the
lack of spirit in healthcare.
Michelle Bernacki wrote a post abouthow healthcare has lost its heart.
We're talking about old or sick ordisabled people's lives, and it's
come down to trying to maximizefinancial transactions often at
(17:55):
best, at worst, doing it in waysthat call forth a whistleblower.
I was thinking of Matt, as you werethink is saying all that, right, and
Matt and I are both in Wisconsin.
We see each other quite a bit andI consider him a very good friend.
And the thing that I love that hesays is have a trusted partnership.
The challenge is many people thinktheir partnership is based on trust.
(18:21):
And, they're not verifying.
I think that's really where, you know,we need to have this trust and verify
or, practice defensive plan sponsorshipso that everybody is really safe.
And you do actually have thattransparency that does lead to trust.
Trust, but verify.
What's that one, Deming?
(18:42):
I think it was Edward Deming.
"In God, we trusteveryone else bring data."
Yeah, exactly.
And it's a really tangled web becausethere could be EBC employee benefit
consultants, where there's corporateto corporate deals, which an individual
consultant may not know about.
Like if two companies at thecorporate level make a deal.
Of course ultimately it could meanthat the EBC or the TPA third party
(19:05):
administrator is incented to makerecommendations that may or may not be
in the plan sponsor's best interest.
Like you often hear about PBMs,you know, kind of backing up the
truck and dumping money on someEBC executive suite's doorsteps.
It's not directly connected withany particular book of business.
It's just kind of a corporateto corporate understanding.
(19:26):
But then of course it does becomekind of odd when you see almost every
single one of any given EBCs clientsadvised to use that particular PBM.
So it, I don't know how possible itis for any given plan sponsor to get
ahead of some of this gamesmanship.
But at the same time, being naivethat this is going on is kind
(19:46):
of not an option these days.
Some of these big companies, theyhave, I don't think a hyperbole to say
that they have platoons of lawyers.
Perhaps we will get to the point, andJennifer Stanley's a really good friend
of mine and she's like, Hey, whatare the best contracts in the world?
These are the oil leases down in Dallas.
Because every single word in thosecontracts has been litigated.
(20:09):
And I could see a world wherethat's the case for healthcare too.
But right now we're sort of in thisinfancy stage there, and there are
like act like a five-year-old, right?
Like, ask the questions, why, why?
One of the things I'm trying tobring to the market are things that
are, sort of this trust and verify.
(20:31):
I have a, sort of schema, a risk map of,Hey, have you gotten all of these things?
At least check the box right.
Or my data analytics partner hasa data map that plan sponsors
can start visualizing that data.
Where's the spend going?
What's happening here?
As you collect more data, anddata we verify that happens
(20:51):
in other areas of purchasing.
And we've just not quite donethat level of due diligence
on our health plan side yet.
That is cogent advice for plan sponsors.
To do everything that you justsaid, ensuring you're verifying.
It's not like this is thefirst day at the rodeo, right?
Like as you said there you have a map thatplan sponsors could take advantage of.
(21:14):
It's really important to be doingthat right now to play, as you said,
it's not defensive medicine, it's likedefensive plan sponsoring relative
to this case that we're talking aboutwhere the allegedly this employee
benefit consultant was pocketing, youknow, the 61% of their revenue was
coming from their clients unknowingly.
Right.
In an unreported way.
(21:35):
In brief, what's the status there?
What's happening right now?
Interestingly enough, this wasoriginally filed in a Maryland state
court, and it's actually been removedto federal court because it deals
with ERISA, which is a federal law.
The Department of Labor has alsotaken an interest in this and is
working with plaintiff's counsel.
(21:56):
It will be very interesting to seehow the Department of Labor works
with plaintiff's counsel and startsto analyze and look at this case.
I am watching that piecereally, really closely.
And plaintiff is the whistleblowerthe compliance person.
Yeah.
What do you think makessomeone become a whistleblower.
(22:17):
Like, there's a difference between, ugh,my company, you know, dot, dot, dot.
And I complain over beers anddeciding to take this step.
Like, what goes through your head?
It goes back to that quote that you seethe results of somebody's decisions, but
you don't see the choices that they had.
And I think in this case, in just thebrief rereading of the complaint, this
(22:38):
guy was in a really difficult spot.
He knew he had to disclose.
And his job was threatened ifhe did disclose and followed
the legal requirements.
He was in an absolutely no-win situationwhere he followed all of the right
paths, and I think that's, all of thepeople that I've talked to that have
(23:02):
concerns about their company havetypically followed the right ways of
dealing with them before going public.
And at some point you realizeI'm not getting anywhere.
I could be personally liable.
That's the Department of Justice'ssentencing guidelines that we were
updated in 2016 is it's not justthe company that can be liable.
(23:24):
Individuals within that company who haveknowledge of wrongdoing can be prosecuted.
So there was another really famous,actually whistleblower lawsuit that you
and I had been talking about earlierwith the generic drug manufacturers
where, I mean it is a hundred, it'slike a quarter billion dollars or
something like that where it's pricefix and colluding, all kinds of things.
(23:46):
There was a whistleblower that broughtthat case and there are CEOs of these,
there's people in these companies thatare being personally, you know, who sat
at that table doing the actual colludingand like they're facing jail time.
Potentially.
Yeah.
So there's this thing calledQui Tam lawsuit, and this
goes back to the Civil War.
(24:06):
And the government saying, if you'reovercharging the government, we want
to give people who are doing theright thing, basically a slice of
the pie, a slice of the recovery.
Depending on the knowledge and levelof sophistication with the DOJ, if
you come forward with wrongdoing atyour company, and say, by the way,
(24:27):
Medicare, Medicaid, whatever wasovercharged, and I can prove it, you
can actually bring your own lawsuit.
And the Department of Justice canchoose to either bring it up or not.
But then, you get a portion of that.
So it's really it, this incentiveto come forward in whistleblower.
Many people, they think of all thenegative facts that you know, oh,
(24:49):
I'm never gonna be employed again.
Oh, this is gonna crash my career or what.
They don't think, wow, like, I couldactually be okay coming forward
because of this provision now.
Qui Tam losses are being challengedas constitutional or not.
Maybe I'll have to come back and giveyou an update on that a little bit later.
I think the point that you'remaking is you can get people in
(25:10):
these companies that are being putin a really untenable position.
You use the rock in thehard place metaphor.
It's like either, if you just do asyou're told and somebody else whistle
blows, you're on the wrong side ofthat interrogation table, right?
Because like now you're aparty to this wrongdoing.
(25:31):
Whereas if you do whistle blow,then as you said, there's a lot
of thoughts to be thought through.
I have this theory that compliance issort of, an organization's immune system.
You can tell a lot byhow compliance responds.
Either you are embraced and you're treatedlike a vaccine or some sort of assistance,
(25:51):
and they're really gonna inoculatethemselves against this, any sort of
bad behavior, and maybe you even get abonus or a reward for coming forward.
Even if it's not a big thing.
Or as you see in this case, youbecome a total target and you
are basically swarmed like aninvader and tried to be eliminated.
(26:12):
You're saying you can tell a lot about acompany and the moral compass of a company
by what happens when someone who worksthere raises their hand and says, We are
doing something non-compliant right now.
Because there's twochoices as you just said.
One choice is, holy cow, thank you somuch for bringing this to our attention.
(26:34):
Let's fix this.
And all of a sudden processesthere, there is activity being
taken to fix whatever it is.
Or alternatively, exactly like in thisparticular case, you get fired for
bringing it up and or you get yelled at inmeetings and there's some crazy quotes in
this particular case about what happenedto this guy in meetings and stuff.
So two ways to go.
(26:55):
There's more subtlety usually.
Here are some thingsthat might be concerning.
We really act within the gray.
And we really explore the gray and goright up into that black or red line.
Any verbal instruction not to comply orgo to compliance would be a huge red flag.
(27:16):
Refusal to meet with legal orcompliance when you've identified or
raised a concern or needing to go toyour immediate supervisor or their
supervisor to get approval to do that.
And then if you're in compliance, anyattempt to keep you from reporting
to the board or board chair orthese people who are ultimately
(27:37):
responsible for the company, thoseare all things that I would, I would
document and definitely push back on.
I always return to the advicethat I received in my first job in
public service, which is, documentas much as you can and never
depend on others to protect you.
Kind of a cold, hard dose of water.
A document what you can, but don'texpect others to protect you.
(27:59):
That advice, it just,it feels very, uh, yeah.
Part of my Masters of Legal Studies isin compliance, and so conducting these
investigations, one of the things thatI really want employees to understand,
because I did not understand this, isthe issue of a corporate Miranda Rights,
and this is called an Upjohn warning.
(28:20):
If the company has identifiedwrongdoing, like in the case
of the generic manufacturers.
You'll be brought in.
You'll meet with their lawyers,and you'll receive what's called
an Upjohn warning, which says,these lawyers do not represent you.
They represent the company and at anytime the company may waive privilege
(28:41):
of anything you've said in order tomitigate their potential liability.
That is critical for every employeeto understand that the company
itself holds that privilege and theability to say to the Department
of Justice, Oh, we didn't do this.
This is just one bad actor thatwent against policy and procedure.
(29:02):
I really want people to understand that.
As you just said, there's no attorneyclient privilege that's going on here
because these aren't your attorneys.
No, they are not.
And that is an unfortunate state offact, but always keep that in mind
when your emails can be disclosed.
They tell you this.
(29:22):
I don't think people expect it, but justremember, you very much work for them.
So whistleblower advice.
One of the reasons why I was lookingforward to having this conversation
with you, Ann Lewandowski, is becausethere's just so much going on in the
healthcare industry that if you stickyour head up and look around, you
can see, and this is anything fromjust odd and suboptimal on one end
(29:49):
of the spectrum to legal, but prettyunpalatable in the, in the middle, right?
There's this whole gray area in the middleto on the other side, just like illegal.
If you are talking to somebodywho's looking around and seeing
any of these kinds of things, ormaybe is a little unclear what they
(30:11):
are seeing, what's your advice?
The first thing that you have to squarewith yourself is, we all have to live with
the consequences of our decisions, and wehave to look at ourselves in the mirror.
We have to be able to pay our mortgage.
Tell our spouse, kids, family,dog, whatever it is that we feel
(30:31):
we're making the right choice.
And balancing all ofthat is not easy, right?
That's, I think, is probablyone of the deepest, most
personal decisions we can make.
But I think if what youare feeling is discomfort.
I have learned that you have totrust your gut and really trust it.
It's not hyperbole to say, I would reachout to a lawyer and run it by them.
(30:55):
Right.
You know, I find that it's typicallyworth the $500 and to say to somebody
with the legal training to do the analysisand say, this is where you're gonna have
trouble, you need to protect yourself.
Because, if you look at these CEOs,right, like these are 10 million or more
dollar fines that they're now facing.
(31:17):
Imagine they had spent the personalmoney to go to a lawyer and say,
Hey, how does this look like?
Am I gonna get in trouble?
And so I think again,it's that thoughtfulness.
It's that defensiveness tomake sure that you really are
on the right side of things.
It sounds like you've gottwo pieces of advice here.
Mainly one of them is we all have to livewith the choices that we choose to make.
(31:41):
There was a show with Dr. JohnLee about cognitive dissonance
that I think is relevant.
Like there's so much going on in thehealthcare industry which is very
upsetting and listeners of this showare probably more familiar than most.
Sorry about that.
And we do not live in an ideal worldhere, so there's always gonna be stuff
that we don't agree with and that wecan see is not benefiting patients
(32:03):
or not being done in an ideal way.
However, there's a differencebetween if that bad stuff is legal.
Or not legal.
And when it's not legal, your advice isstep one, as you just said, document.
Document, because you're gonnaneed to protect yourself.
Like there's illegal stuff that's goingon in your vicinity, and somebody
(32:23):
else could wind up whistle blowing.
And then as we said, you're gonna beon the wrong side of the table there.
So document your stuff and go to a lawyer.
Yeah.
I mean, you need somebody with thatlegal training to really answer
the question, is this legal or not?
And, as we already covered, right,legal counsel for the company,
works for the company theirjob is to defend their client.
So I do think it's a very reasonablestep to go to your own lawyer and
(32:47):
say, what do you think of this?
Here are sort of the set of facts.
I'm concerned.
Am I gonna be okay?
That's a hard thing to do, but thenyou can get that very clear legal
advice from somebody who knows.
That I think that's probablyvery sound, especially if you are
working for one of those companies.
(33:09):
We talked about, there'stwo kinds of companies.
I mean, there's a lot kinds ofcompanies in the, in the middle, as
you said, like a lot of times thingsare done a little bit more subtly.
But like you are workingthere for a while.
You can tell whether you're workingfor a company that's really trying hard
to do the right thing or a department.
Sometimes it's not all at the corporatelevel, like it could definitely, there's
different cultures even within differentbranches of an organization or whatnot.
(33:31):
Another red flag would be, well, so andso said the wrong thing, and they're
not able to move up, or they've beensort of blackballed within the company.
That would be another prettymajor red flag that I would
be very concerned to hear.
I bet everybody listening right nowknows what kind of company they work for.
Like you've been therefor any amount of time.
There's just any number of things.
They're probably tiny little things, butthey all add up to, if I see something
(33:54):
wrong, I'm not gonna say anything.
And if that's someone's innate, like Iknow that that's the right thing to do.
It's not gonna go well.
Then, okay, we know what kindof company that we work for.
The next question is, is itunpalatable or is it illegal?
If it's illegal, then there'ssome choices that need to be made.
If it's not illegal, it's justunpalatable, then it becomes
(34:15):
more of a personal question.
How do we wanna deal with that so thatwe can feel good about what we're doing
I think it is really hard, right?
Because when you get backto the Department of Justice
sentencing guidelines.
You are required to have notjust a compliance program, but
an effective compliance program.
Having this negative responseto compliance is within
(34:38):
itself a really big red flag.
I think there is very much a graycontinuum of what is the tone at the top?
Are we embracing complianceor are we shunting it off?
Which is within itself a very big problem.
Ann Lewandowski, if someone isinterested in learning more about your
work or the plan sponsor complianceroadmap that you had mentioned
(35:02):
earlier, where would you direct them?
Reach out to me on LinkedIn,or you could reach out to me
at ann@patientvalueinsightsor patientvalueinsights.com
And we will put all of theselinks in these show notes.
Ann Lewandowski, thank you so much forbeing on Relentless Health Value today.
Thanks, Stacey.
It's been such a pleasure to join you.
Hi, I am Dr. Vivian Ho.
I'm a health economist at Rice Universityand Baylor College of Medicine.
(35:25):
I listen to Relentless Health Valuereligiously because this is the
show for those who are part of thetribe that wants to improve the
quality of healthcare, improve accessto care, and make it affordable.
So make sure that you subscribe tothe newsletter and subscribe to the
podcast and keep up with every episode.
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