Kusserow on Compliance: Drifting into corporate integrity agreements is dangerous

Compliance Officers are well aware of impending Corporate Integrity Agreements (CIAs) as cases move through investigations and settlements with the Department of Justice (DOJ) and HHS Office of Inspector General (OIG).  This lead time permits time to prepare for meeting obligations. Consultants with extensive experience in this area offer some thoughts and suggestions to avoid making costly mistakes, or failing to meet CIA deadlines.

  • Suzanne Castaldo, J.D., has assisted many organizations in meeting CIA terms and makes the point that, “When a matter falls into an investigation by the DOJ and OIG, legal counsel takes over to resolve the matter. After the case is settled with the DOJ, they continue to work with the OIG on terms and conditions for the CIA.  The result often catches the organization and their Compliance Officers, executive leadership, and Board about the full scope of what needs to be done in the 120 days following agreement.”
  • Tom Herrmann, J.D., had a number of years at the OIG coordinating with the DOJ, developing settlement agreements, and appointing monitors, as well as working as an Independent Review Organization (IRO) with more than a dozen organizations. He urges “Compliance Officers or organizations moving to DOJ settlement and OIG to not sit back and wait for an agreement to be negotiated.   They should be in communication with their legal counsel to understand what is being discussed in terms of timing and obligations and begin maneuvering with plans to meet the obligations that will be in the CIA.”
  • Carrie Kusserow, who worked as both a Compliance Officer and a consultant in meeting corporate integrity agreement (CIA) obligations, agrees, in that, “When CIAs are signed, most Compliance Officers and their executive leadership are often surprised by the implications of what has been agreed; and ill prepared to meet the terms and stringent timelines that are included in them. They wake up and begin to focus on the real scope of what has been agreed in the CIA.  Suddenly they find they begin to understand the scope of their commitment and begin racing the clock to accomplish all that to which they have agreed.  Frequently this leads to mistakes and delays in trying to do all that is required within strict timeframes established that include securing the Independent Review Organization, as well as Compliance Experts for the Board.  All this is the backdrop to preparing the first report to the OIG.  The last thing any organization needs is to fail in meeting obligations at the outset of a CIA.”
  • Steve Forman, CPA, who also has extensive experience both in leading IRO teams as well as being a Board appointed Compliance Expert for three organizations, observed that “There is little by way of excuse for Compliance Officers, leadership and the Board not being adequately prepared for what is coming in terms of a CIA. Compliance Officer should, at the first sign that there will be a settlement with the government begin their homework and preparation, by reviewing recent CIAs posted on the OIG website.   CIAs follow a pattern, granted that terms and conditions evolve, it does so slowly.  All a Compliance Officer needs to do is find a CIA with factual similarity to their situation; and then read the terms and apply them to their own organization.  By doing this, they will know how much time they will have to do certain things.”
  • Al Bassett, J.D., who has more than 20 years’ experience in providing compliance advisory services, adds, “Many of the tasks that will be required under a CIA can and should be undertaken well in advance of an agreement. It is foolish to wait until a CIA is signed.  The race is on once a case is moving to the DOJ, not OIG.  In many cases this provides a year or more of advance preparation to meet what will likely be included in the CIA in terms of being able to evidence compliance program effectiveness. It is important that organizations realize that CIAs are no longer just focused upon substantive issues that led to the problem that are monitored by an IRO.  Recent CIAs have turned their attention to compliance and certifications.  Compliance standards are set forth and there are mandated certifications by the executive leadership, including the Compliance Officer, along with members of the Board.  Board certifications have also led to mandates to engage in addition to an IRO, a Compliance Expert to assist and give advice to boards to prepare them to personally certify the compliance program.  Knowing this, the Compliance Officer should be working in overdrive, before any settlement, in preparing to meet what is needed to evidence compliance program effectiveness.”
  • All of the experts agreed that it is strongly advisable for Compliance Officers to begin looking for qualified experts to fill the roles of an IRO and Compliance Expert. They underscore this as a very serious responsibility, for once selected, they are likely to have that role for up to five years.  Although there are many who would like to fill those roles, finding the right qualified experts will take some time and weeding.  Far too many organizations find themselves rushed on finding the right experts and are forced to settle on lesser qualified parties.  A bad selection can result in many additional unnecessary burdens, higher costs, and increased problems with the OIG.  The best advice given is to find an organization with experience in these roles with many CIAs.  They will know what needs to be done and not learn on the engagement at the expense of the organization.  They also will be known by, and have experience and credibility with, the OIG.

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 © 2016 Strategic Management Services, LLC. Published with permission.