Kusserow’s Corner: Experts Answer Questions About Using an Interim Compliance Officer (ICO)

Most health care organizations have a compliance program under the direction and management of a Compliance Officer. It has become increasingly common for vacancies to occur in their compliance program, as result of a retirement, someone moving on to another organization, removal of incumbents, or any number of other reasons. The question becomes how to fill the gap until a new permanent replacement can be found. In some cases, it may be simply promoting someone in the compliance office, but for most it requires hiring a new person for the position. Many choose to hire a temporary expert to be an interim Compliance Officer (ICO). From previous blog articles on the subject, I have received many questions about using ICOs. I went to experts who have acted in the capacity of an ICO on multiple occasions for the answers to these questions, with the following results:

  1. Does the HHS Office of Inspector General (OIG) recognize and approve the use of ICOs?James Cottos is widely recognized as a national compliance expert. He was the OIG Chief Inspector and retired as an Assistant Inspector General. He has served as an ICO on eight different occasions. He is also hosting a complementary Webinar on June 4 relating to this subject. Cottos noted that “It has been long understood by the OIG that it may be reasonable to outsource compliance duties and activities.” He cites various OIG compliance guidance documents that state that outsourcing for compliance expertise is acceptable, especially for smaller organizations with limited in-house staff and support. Cottos stated that “Over 10 years ago, OIG and HCCA co-sponsored a government-industry roundtable that discussed outsourcing compliance programs with the participants agreeing that their function could be outsourced to independent compliance experts.”
  1. Is there a problem using someone internal as ICO? Steve Forman, CPA, is another national expert who served as the VP for Internal Audit and Compliance for the largest provider in the state of New York for 10 years and previously was an executive with the OIG. He has also served on multiple occasions as an ICO. He states, “the difficulty in designating someone internal to be the ICO is that often it is an individual who is not a compliance professional and is lacking the experience and expertise required by the job, which in turn, results in lack of credibility with both management and employees. The fact is that I have not seen a successful use of an internal party to be an ICO as a secondary duty. It can be worse than having no one at all.”
  1. Why is having an unfilled gap in Compliance Officers a problem? Cottos noted that he has on several occasions been called in to be the ICO after a long gap, and found as a result the program had rapidly deteriorated. He said, “The prolonged absence of the compliance officer sends a powerful signal to everyone that the program is not essential or important to management. Regaining the trust and confidence in the compliance program thus becomes a daunting challenge. Furthermore, under such circumstances, the organization will be playing ‘Russian Roulette,’ gambling that a serious compliance problem will not emerge during this period of vacuum. For these and other reasons, organizations are well advised to not let the compliance program go unattended”.
  1. What qualifications should be used in selecting an ICO? Cornelia Dorfschmid, Phd has more than twenty years of experience in health care compliance consulting and is one of the foremost experts in the country on billing and reimbursement compliance. She has served on multiple occasions as an ICO. She states that any outsourced compliance expert hired to be an ICO “must have extensive knowledge and varied experience with compliance programs in all facets of the seven program elements. They also must have experience of having worked with executive leadership and Boards in dealing with sensitive issues.” Most importantly, “the individual must have understanding of regulatory high-risk areas and the proper ongoing auditing and monitoring of these areas.”
  1. What are the benefits to offset the cost of using an ICO? Cottos stated engaging an outside expert as an ICO “has a lot of benefits, over and above, just the management of the day-to-day operations of the compliance program. The expert can approach the work with ‘fresh eyes’ and is able to perform the duties of the position with independence and objectivity, without preconceived notions about personnel or programs, or investment in prior decisions and actions. This has proved to be extremely valuable to clients.” He also notes that there is great benefit of having worked in a variety of program settings, and with that experience he is able to provide clients with proven methods to build a sounder compliance program foundation. He also noted that “perhaps the best benefit of hiring an outside ICO is having the experience, credibility, and authority that come from working with a variety of leadership and Boards.”
  1. Is it necessary to have a full time ICO? Depending on the size and complexity of an organization, Cottos, Forman, and Dorfschmid all agree that in most cases, hiring an expert at less than full time is an option that can be considered. An expert ICO can bring a wide range of experience and efficiency that may not require their full time presence on site with the organization. However, they all also agree that the ICO must be available on-call at all times in case of urgent need.

All the experts agreed that the trick for management, wanting to use an ICO, is to design the engagement to bring maximum return of benefit for the cost.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2014 Strategic Management Services, LLC. Published with permission.