The HHS Office of Inspector General (OIG) now requires in its corporate integrity agreements (CIAs) the engagement of independent compliance experts to assist it in meeting its obligations of oversight of compliance programs. This trend has been part of a movement to hold members of governing boards more accountable for compliance program oversight. Those engaged as compliance experts must create a compliance review work plan, perform the program review, and provide a compliance program review report. The report has to describe the review performed, findings, and any recommendations for program improvement. The board must review the report and act upon any findings and recommendations. A copy of the report must be sent to the OIG as part of each CIA annual report. In addition, any materials provided by a compliance expert, as well as any minutes of meetings must be available to the OIG upon request
Carrie Kusserow has a long history as a compliance officer and as a compliance consultant working on compliance with CIAs. She noted that the “real game changer” in CIAs has been the movement toward increased certifications by executives, compliance officers, and board members. Board members now have the burden to adopt and sign a resolution for each CIA Reporting Period. This is serious business, in that making false certifications could criminally violate federal law (18 U.S.C. §1001). In order to hold boards fully accountable, the OIG mandates that they engage a compliance expert to assist them in carrying out their compliance program oversight and to assist them in being able to make their certification. Selecting the right compliance expert is critical; once selected, they are likely to be doing this work for five years. Kusserow also warns that time is not an ally when CIAs are signed. The attorneys handling the litigation and settlement process often are working ahead of the organization and those who will have to implement the terms and conditions of the CIA. This means that many organizations find themselves in a race against time to do all that is required, including engaging independent review organizations (IROs) and compliance experts. She advises organizations moving toward settlement to begin looking and evaluating potential parties to be engaged as outsider experts.
Tom Herrmann, J.D. has many years’ experience managing the CIA process with the OIG, as well as having been engaged by numerous organizations in meeting CIA obligations. He believes that it is important to remember that moving from settlement to meeting obligations under a CIA is also moving from having parties advocating on behalf of the organization to parties assisting in meeting the requirements that have been agreed to. He speaks from firsthand experience when he says that the OIG does not like parties trying to re-litigate a case, and any effort to do so will likely prove counter-productive. This means that the compliance experts engaged must focus implementation on the terms of the agreement. To do this, they must be free of any conflicts of interest if they are to meet the independence and objective standards required by the OIG. The OIG wants to see organizations select true experts who will carry out their responsibilities with independence and integrity. As such, Herrmann agrees that the more experience that parties have as experts under the CIA, the better known they are to the OIG and more credible will be their work.
Selecting compliance experts
Organizations selecting compliance experts should keep the following tips in mind:
- An independent expert must be properly qualified to perform the work described in the CIA.
- The work to be performed consists of operational reviews, not financial audits.
- The focus is on compliance program expertise.
- A CIA may require several different types of expert (e.g. IROs, compliance experts).
- Those selected should be qualified and experienced in the industry sector covered by CIA.
- Lack of expertise in the area for which the experts are engaged equals potential problems with OIG.
- Sub-standard reports risk loss of compliance credibility.
- Work performed by experts must be professionally independent and objective.
- Compliance experts follow Government Accountability Office Government Audit Standards (GAGAS) standards for operational reviews.
- Experts should certify to OIG professional standards.
- Entities should ensure and seek certification that the experts have no conflicts of interest with the entities.
Steve Forman, CPA has been engaged as a compliance expert on behalf of several organizations. Based upon his experience, he offered tips on how to go about selecting an outside compliance expert. He believes it is very important engage parties with considerable experience doing this kind of work. Using people inexperienced in compliance or using them as compliance experts is risky. Those lacking experience tend to be more costly, as they charge for their time in learning what needs to be done at the expense of those that have engaged them. The more experience they have doing this kind of work under a CIA, the better. As such, it is advisable to find experts who have been engaged by entities under CIAs on multiple occasions. It also permits reference checking on how well the experts did with organizations that used them. Forman also added that having served many years as a compliance officer, in addition to serving as a health care consultant, was critical in being able to deal with real and practical considerations in acting as a board compliance expert. He believes having that combination of experience provided those organizations using his services with the most efficient results.
Appropriate reference-checking questions include:
- Did the firm meet its obligations satisfactorily?
- Were there any problems?
- Did the OIG find a firm’s work satisfactory?
- Did a firm perform services economically and efficiently?
- Was a firm sensitive to the entity’s operations and needs?
- Was a firm’s work professional, competent, and timely?
One last piece of advice for compliance officers is that they educate their boards on this new trend, whether or not the organization may be involved in settlements with the government. What the OIG mandates is what it believes all organizations should do–that is, provide greater board oversight of the compliance program. As such, all boards should add members who are “compliance literate” and/or secure outside experts to advise them on the progress in development of an effective compliance program.