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CEO culpability in the health care industry

On Behalf of | Jun 15, 2017 | Medical Licensing |

Many business executives believe that building a great organization starts at the top. For chief executive officers, this means fostering an environment that is both ethical and profitable. Since the passage of the Affordable Care Act in March 2010, the health care industry has been at the crux of this balance, with new laws meaning increased scrutiny from a variety of media and government organizations.

As the saying goes, with great power comes great responsibility, and business executives are among the first to feel the effects of this adage, both good and bad. Since the crisis of the banking industry in 2008, CEOs have quickly felt the public pressure to come clean on a variety of business practices.

Does delegation create culpability?

Executives from the world’s top companies, including Wells Fargo, Volkswagen and Toshiba, have had to answer to investigators when business practices are alleged to drift into a legally or ethically gray area. Corporations are big places, and despite sitting at the top of the organization, CEOs still delegate much of the day-to-day business power to their subordinates.

Even with a hands-off approach, CEOs can still be held responsible for the allegedly illegal or unethical actions of their subordinates. This notion is known to the business world as “CEO culpability.” With health care changing dramatically under Obamacare, and another potential change on the way under President Trump, health care providers should carefully consider the legal and ethical boundaries of their services.

Medicare and Medicaid fraud issues still at the forefront after Obamacare

The Department of Justice has begun to investigate claims of insurance fraud after multiple health insurance companies allegedly overbilled Medicare for services and diagnoses provided to patients. These allegations can have severe consequences for the careers of CEOs, the viability of a company and the medical licensing of doctors who provide treatments and diagnoses.

Building a profitable health care company and an ethical medical practice requires many years of experience. However, the methods of yesterday may no longer be relevant tomorrow as the law changes. Likewise, the notion of CEO culpability is changing the way in which companies keep accountability of their employees and record books.

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