Kusserow on Compliance: When a CIA looms, it is time to seek a new job, career change, or hiding place, or take action

When organizations fall under the spotlight of the Department of Justice (DOJ), there is a period of many months before a settlement is negotiated that is followed by another negotiation process with the HHS Office of Inspector General (OIG) that leads to a corporate integrity agreement (CIA). By time of settlement, or shortly thereafter, it is common to find the compliance officer has left, as many  see the warning signals and decide to leave, or later are asked to do so.  When this happens, there begins a struggle to replace the compliance officer.   This is not an easy thing to accomplish as it take three to five months on average to find someone qualified and is complicated by the fact that many would-be candidates may not wish to take on a “fire storm” job at the outset of a five-year stringent CIA set of terms and condition.   All this takes place at a time when CIA terms will be adding great new burdens on the compliance program.

Replacing compliance officers

One short-term solution, when replacing the compliance officer, is to designate someone in-house to act until the gap can be filled by a permanent appointment.   This is seldom a good solution.  At a time when a steady, experienced, aggressive, and professional hand is needed to meet the immediate challenges of meeting the stringent compliance mandates of a CIA, the temporary appointee will be just trying to hold things together, without creating any future problems for themselves.   The alternative is hiring an interim compliance officer, until the right permanent solution can be found. This has the benefit of using someone who knows what has to be done and will be replaced within a matter of a few months.  This permits a steadier hand and includes the benefit of having someone to independently assess the state of the program and move on a plan to strengthen it.

Compliance officers who want to keep their jobs

Those desiring to keep their jobs cannot afford to wait in the wings to see what develops while the attorneys are negotiating with the DOJ and OIG.   It is dangerous and career-threatening.  They need to shore up the program and be considered part of the solution.  While negotiations are underway, the attorneys focus on the transaction terms with the government to resolve the pending issues, and not necessarily the consequences of living with the negotiated terms.  This may take many months, during which time the compliance officer needs to act affirmatively and with celerity to strengthen his or her position, before the CIA descends and the attention is redirected back to compliance.  The OIG follows predictable patterns in setting terms and conditions. Anticipating and preparing for what is coming with the CIA is being smart and, quite frankly, a job security effort.   The time should be used to educate management and the Board on what to expect, as well as preparing for what will come.

Evidencing compliance program effectiveness

Compliance officers should move at the earliest date to develop independent evidence that the program is operating the way it should and the problems that gave rise to the government intervention were an aberration. This also will help the attorneys in negotiating terms and conditions. It is wise to consider having an independent compliance program evaluation done by experts far in advance of the CIA mandates going into effect that will mandate the Board to hire a compliance expert to do the same thing. This will provide evidence of program strengths and identify areas of opportunities for improvement, as well as provide time for taking corrective action to address any weaknesses.  Results can be presented to the executive leadership and Board; attorneys may find them useful in negotiating settlement terms.  This further keeps the whole effort under direction of the compliance officer, who can take credit for the identified strengths in the program, as well as in addressing any findings otherwise.  If this is not done well in advance, then all findings will come from the Board-engaged compliance expert and reflect negatively on the compliance officer. There is a big added benefit, in that the independent assessment will likely become the framework for the Board-engaged compliance expert to focus attention to determine if all the corrective action measures have been addressed, rather than developing his or her own review criteria.

Help identify potential Board compliance experts

After a settlement, there usually is a big scramble to find qualified parties to be the independent review organization (IRO) and Board compliance expert.   It takes a lot more time and effort to find the right qualified parties to do this kind of work than to properly vet them.   The fact is there are relatively few such experts with the requisite experience.  It is therefore useful for the compliance officer to have researched the subject long before any CIA is signed or anyone else is focused on this.   Laying a proper foundation for identifying qualified candidates can help the compliance officer to be seen as part of the solution to the challenges facing the organization.  When it comes to compliance experts, it is very important engage parties with considerable experience doing this kind of work. Engaging inexperienced people as compliance experts is risky and unpredictable. Inexperienced people also tend to be more costly as they charge money while learning what needs to be done.  The more experience with this kind of work under a CIA, the better for gaining efficient result.  Those who have done this work before know what needs to be done and have a track record with the OIG.  It also permits reference checking on how well they did with organizations that used them.

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 © 2017 Strategic Management Services, LLC. Published with permission.

Comments

  1. Yvette Bry says:

    Why is it assumed that the Compliance Officer is the reason there was violations or at fault? In most organizations it is the business leaders who determine not to make the necessary changes, or hold staff accountable for failing to comply with Compliance Professional’s recommendations and if in a organization where they CO has any real authority to implement changes, other leadership fail fallow through, support the necessary efforts to implemented processes successfully.