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Medical Technology Use Spurs New C-Suite Titles, Which Bring Opportunity and Risk
September 07, 2016

Medical Technology Use Spurs New C-Suite Titles, Which Bring Opportunity and Risk

R. Scott Oswald is managing principal of The Employment Law Group, P.C., a law firm based in Washington, DC. He represents healthcare whistleblowers and others who stand up to wrongdoing by their employers. An accomplished trial lawyer who has brought nearly 50 trials to verdict, Oswald has recovered more than $90 million in judgments and settlements for his clients. He is a graduate of The Trial Lawyers College and a past president of the Metropolitan Washington Employment Lawyers Association.
This article is co-written by  David Scher , principal of The Employment Law Group, P.C. Scher works closely with clients who suffer discrimination or retaliation under civil rights and whistleblower laws.

The C-suite of the healthcare industry has grown dramatically over the last several years. With titles like chief innovation officer and chief transformation officer now common, the opportunity for professional growth for doctors, nurses, and other healthcare providers has never been greater. However, most do not realize that these new titles come with additional risk. 

The C-suite growth has been spurred largely by the American Recovery and Reinvestment Act of 2009 (ARRA), Pub. L. No. 111-5, which ties reimbursement rates under Medicare and Medicaid to the use of technology in medicine, such as the implementation of electronic medical record (EMR) systems and the “meaningful use” use of electronic health records (EHRs). Under the EHR Incentive Programs, at least 50% of patients must have access to their records online and more than 5% of those patients must actually use the online systems made available by their providers. 

Healthcare companies, seeking to maximize their reimbursement, have created an array of positions, such as chief incentive officer, chief transformation officer, chief data analytics officer, and chief experience officer, to help with the implementation of new technologies. These positions directly reflect the requirements that must be met to maximize reimbursement under federal healthcare programs. 

The opportunity to take on new leadership roles and for professional growth is immensely exciting, but it comes with risk.  On September 9, 2015 the Department of Justice (DOJ) issued a memo with the subject, “Individual Accountability for Corporate Wrongdoing.” The memo discussed a new emphasis on prosecuting individual employees both criminally and civilly. The DOJ also suggested that companies who cooperate with the government during investigations may no longer receive full credit for their cooperation unless they reveal information about the individual employees at fault. Why should new C-suite members be aware of this memo? Because liability can attach itself to seemingly innocent acts or inaction, creating a minefield for new executives who come from a healthcare background with little regulatory experience.

For example, under Section 6402 of the Affordable Care Act, any overpayments by Medicare or Medicaid must be returned within 60 days from the date that the overpayment was “identified.” Retention of an overpayment past the 60-day deadline can trigger liability under the False Claims Act, which provides treble damages and fines of up to $11,000 per occurrence.

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