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By Anna Wilde Mathews and Alexandra Berzon 

A little-known health company says it has scored a high-profile new board member: Michael D. Cohen, a close associate of President Donald Trump who serves as the president's personal attorney.

4C Health Solutions focuses on detecting fraudulent or questionable health-care billings sent to insurers. The closely held company based in Midlothian, Va. -- whose corporate name is HealthcarePays Network LLC -- brought in less than $2 million in revenue last year and currently has around 20 employees, according to Chief Executive David J. Adams.

The 4C board also includes well-connected former Republican Cabinet officials Tommy G. Thompson, the company's chairman and a former U.S. Secretary of Health and Human Services, and former Treasury Secretary John W. Snow. Another board member is Bill Fields, a former high-ranking executive at Wal-Mart Stores Inc.

Mr. Adams said he hopes they can help 4C achieve ambitious growth, fueled by business from government programs such as Medicare, Medicaid and the Veterans Health Administration, as well as from corporate employers.

Mr. Adams said he doesn't expect Mr. Cohen to promote the firm to the president or others in the Trump administration. "I don't want Mr. Cohen to say, 'Mr. Trump, you ought to do this with' " 4C, Mr. Adams said. "If Mr. Cohen wants to talk to Mr. Trump about the problem of health-care fraud, that's fine."

He said Mr. Cohen is a valuable board member because of his relationships with top corporate executives and expertise in employment law.

Mr. Cohen declined to comment about 4C, referring questions to the company. He said he had been "asked to join many boards."

Mr. Cohen is a longtime troubleshooter for Mr. Trump and has called himself "the fix-it guy" for the president. He served in that role as a Trump Organization employee and resigned from the company when Mr. Trump became president. He has said he is paid privately by Mr. Trump and isn't part of the government.

Some previous presidents, including Bill Clinton, have had personal attorneys to address legal matters that fall outside their government duties. Ethics experts said Mr. Cohen's role on a corporate board of directors could present some conflict-of-interest challenges, even though he doesn't face the restrictions a government employee would face in personal business matters.

Mr. Cohen "is free legally to pursue his own business interests, but his role as Mr. Trump's personal employee gives him a unique access point," said Kathleen Clark, a professor at Washington University School of Law, in St. Louis.

As an attorney, Mr. Cohen has to serve his client's interests: One question that could arise is whether that responsibility would conflict with his obligations as a corporate board member, Prof. Clark said. And Mr. Cohen's proximity to the president could lead to a perception of favoritism if a company where he is on the board attempts to win business with government agencies or influence policy, ethics experts said.

A White House official didn't respond to a request for comment. In an email, Mr. Cohen dismissed a question about ethics and potential conflicts of interest as "fundamentally flawed and biased" and said he did not see the benefit of engaging in a conversation about it.

Mr. Thompson said he doesn't expect Mr. Cohen to discuss the company with Mr. Trump or federal officials, though Mr. Thompson said he himself has spoken about the costs of health-care fraud with Trump administration officials. "I hope once he's on the board, he helps us make our agenda apparent to people," Mr. Thompson said. "I hope he will do his part with his connections," including in the business sector.

Mr. Adams said board members have invested their own money in 4C. Mr. Cohen hasn't done so, but will receive options to purchase shares as part of his board service, the CEO said.

4C has been aggressively pitching its services to large companies, saying it can save them money that they currently spend on questionable health claims through employee health plans. 4C says it can scan large volumes of claims and detect patterns that may signal fraud. Other companies compete with 4C in offering such services to employers.

4C wasn't profitable last year, Mr. Adams said. He said the company aims to be in the black in 2017 when he projects revenue will grow to around $17 million. The CEO said his company is working with several large customers and potential customers but he said he couldn't name them publicly due to confidentiality requirements. 4C charges clients a set monthly fee for each person covered by the health plan.

4C says it aims to prevent questionable payments before they are made. Getting access midstream to large health insurers' systems to intervene and stop allegedly problematic payments is likely to be an uphill battle, industry experts said. Mr. Adams said 4C believes employers have the legal right to block payments of their own money for questionable claims.

Write to Anna Wilde Mathews at anna.mathews@wsj.com and Alexandra Berzon at alexandra.berzon@wsj.com

(END) Dow Jones Newswires

March 24, 2017 10:00 ET (14:00 GMT)

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