Kusserow’s Corner: Using Experts to Fill Compliance Officer Gaps

It is becoming increasingly common for changes in compliance officers to create a gap in the management of compliance programs, which can leave an organization without day-to-day management of its compliance efforts. This can result in serious problems and potential liability, especially at a time when mandatory compliance requirements are under development. With the heightened enforcement environment, leaving such a gap can be risky. All this makes the problem of finding a suitable replacement—someone properly qualified—in a timely manner a relatively high priority. Many organizations are finding this to not be an easy task. The costs of finding and hiring a proper experienced and qualified person may be difficult and time consuming. It is not surprising that many turn to temporary expert help and use the as an Interim Compliance Officer (ICO). The driving force behind making such a decision is the realization that designating someone internally to do the work until a new, permanent Compliance Officer can be recruited is dangerous. For smaller organizations, it is unlikely there is anyone who is sufficiently qualified to carry out all the duties. It is also not good for someone to take on those duties temporarily and make decisions that may haunt them when they return to their old job. Also, making some decisions, when not properly trained or qualified, may create a potential problem for the organization. What is worse is selecting someone to take on the role of Compliance Officer as a temporary set of secondary duties to their current job. This will always lead the individual to continue giving priority to their regular job and doing as little as possible in compliance.

Steve Forman, CPA, is an expert on the subject. He has over 20 years’ experience in health care compliance in addition to having been head of the HHS Office of Inspector General’s (OIG’s) Office of Management Operations. He also served as an ICO on several occasions. He summarized the concept by saying “ICOs bring ‘fresh eyes’ to the program, in that they can provide objective assessment on the state of the Compliance Program, offer suggestions, and give guidance for improvements.”

Jim Cottos is a nationally-recognized expert on the subject of ICOs, with over 35 years’ experience in compliance, who has served as an ICO on eight different occasions. He has published on the subject and is hosting a free webinar on the subject on June 4, 2014. He notes, “A properly-qualified outside expert acting as an Interim Compliance Officer has a lot of advantages. They bring the experience of having served in other organizations and dealing with many of the same issues already addressed by prior jobs.” Another important factor in using an ICO is that they have not been involved in any prior decisions, nor have they been aligned with any parties in the organization.

The experts note that using an ICO may be costly in the short run, but it is only for a temporary time frame. The trick is to design the engagement to bring maximum return of benefit for the cost. In addition to managing the existing program, consider having an ICO:

  • Provide an independent assessment of the compliance program
  • Identify high-risk areas that warrant attention
  • Offer suggestions to build a firmer foundation for the compliance program
  • Review the existing Code, compliance policies, and other guidance
  • Evaluate the quality and effectiveness of compliance training
  • Develop a “road map” for the incoming compliance officer to follow
  • Assist in identifying and evaluating candidates for the permanent position
  • Assess resources needed to effectively operate the compliance program
  • Identify or build metrics that evidence compliance program effectiveness
  • Provide briefings for management and board on the state of the program.

It is also important to remember that ICOs, as implied by the name, are temporary compliance officers serving for a period of time while an organization seeks a qualified permanent replacement. Finding the right ICO, with a lot of experience and many technical skills, can make significant improvements for any compliance program in a relatively short order. In fact, it may be the most economical means to have an independent evaluation of a compliance program.

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.