Will the Threat of Personal Liability Stifle Corporate Activity?

January 2012Articles HCCA Compliance Today

Both the federal Food and Drug Administration (FDA) and Office of the Inspector General (OIG) have authority to seek personal consequences against corporate officers deemed responsible for federal health care violations. For example, the FDA has the power to exclude officers from federal health care programs and seek debarment of corporate officers. The power to punish individuals, however, goes beyond sanctions. Recent developments demonstrate that individual criminal liability is a distinct possibility. More importantly, these developments have expanded the ranks of corporate owners, officers, and managers who face criminal liability—and have also expanded the nature of that liability itself. Individuals who have no actual knowledge of wrongdoing can still face criminal consequences merely as a result of their position within a company. This expansion of prosecutorial authority promises to have an immediate impact on corporate compliance programs. Whether it encourages managers to become more actively involved—or to avoid involvement altogether—remains to be seen.

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