Kusserow on Compliance: Costly mistakes in negotiating Corporate Integrity Agreements

From its inception, I have been closely monitoring the Office of Inspector General’s (OIG’s) process in developing Corporate Integrity Agreements (CIA) with requirements for an Independent Review Organization (IRO). What is clear, many organizations make very costly mistakes when negotiating a CIA and in selecting an IRO that serve only to aggravate their situation. This blog focuses on how to avoid these potential problems and their negative consequences.

First and foremost, it is a mistake to assume the OIG attorneys assigned to negotiate the CIA are familiar with the detailed facts of the DOJ case. Those OIG attorneys, who may have been deeply involved with DOJ, are not the same individuals who develop CIAs and are not likely to have any knowledge beyond the court decision or settlement terms with the DOJ. Many very competent law firms specializing in litigation issues with the OIG may not be familiar with the entirely different process of negotiating a CIA, resulting in missteps. It is an entirely different process, involving an entirely different cast of characters. The problem manifests itself when attorneys come to the OIG table continuing to argue the merits of their client’s case. It is the biggest mistake that can be made. As far as the OIG is concerned, all those issues were settled by the court or with the DOJ and are not subject to further discussion. The OIG attorneys are not interested in hearing this and consider those issues settled. Trying to re-litigate the case will get the negotiating process off on the wrong foot and frequently leads to aggravating the outcome of negotiations. The same holds true when the OIG assigns an attorney a monitor to oversee a CIA. That person will also be new and accept the CIA as a finished result and not wish to go over the work done by another OIG attorney. So the lesson is get it right the first time and be prepared to live with it.

It is also a mistake to assume the OIG attorney has any particular knowledge of the program manuals, federal/state requirements related to the underlying case, or operational issues associated with particular types of health care providers (e.g., hospice, clinical lab, specialized physician practice). The OIG attorney may be new to the particular health care sector, or new to the OIG. With this in mind it is critical that the organization has its own negotiating team experts on that subject. There have been unfortunate cases where both the attorney representing the organization and the OIG attorney were operating blind in areas that were unfamiliar to both. The consequences have been terms and conditions imposed and agreed to by the organization that were found to border on being horrendous in compliance implementation.

Tips on avoiding mistakes in the negotiation process

  • Remain focused in discussions on moving forward and resolving remaining issues and do not get stuck on issues with the OIG, as it is under pressure with other cases and does not respond well to matters that delay or sideline the process.
  • Accept what has been settled with the DOJ and come to the OIG with a stated commitment to find ways to restore the organization’s reputation and leave the problem behavior behind.
  • Do not wear thin the patience of the OIG attorneys on issues or unproductive meetings.
  • Include individuals on the team with experience with the CIA negotiating process, as well as with operational experience to understand the consequences of proposed term commitments in terms of time and costs.
  • Ensure the following in the negotiations:
    • Scope and breadth of the CIA is clearly outlined and defined;
    • Full understanding of what is expected to evidence compliance with CIA terms;
    • All terms and conditions are studied and understood;
    • All “covered persons and “relevant covered persons” are defined;
    • Clear understanding of applicable government regulations and manual provisions;
    • What is considered to be an “error” and acceptable “error rate;”
    • Vague terms like “substantial”, “material”, “significant” are clearly defined;
    • Understanding of the IRO review condition and criteria;
    • Entity is ready, willing, and able to comply with everything being proposed;
    • Understanding the scope and costs of work to be conducted by an IRO.

Once a CIA is agreed to by all parties, it is advisable to engage experts to conduct a “mock” review in advance of the IRO. This will surface any problems in the terms and conditions of the CIA. Identifying any such issues quickly to present to the OIG is important. Waiting until the problems are raised after the IRO has begun work is not a good strategy with the OIG. The “mock” review also can help ensure the organization will be able to pass the IRO review. If the organization can evidence full compliance with the terms of the CIA in the first year, it is in a better position to ask for a reduction of the CIA period after a couple of IRO review reports.

For more information on this topic, please consider registering for the upcoming WK webinar, “CIA Lessons Learned—Negotiating Terms, Selecting an IRO, Meeting Obligations,” featuring Richard Kusserow.

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 © 2015 Strategic Management Services, LLC. Published with permission.