Kusserow on Compliance: Questions concerning compliance outsourcing

One of the most significant recent trends has been the movement towards outsourcing as many functions as possible that are not directly involved in a business’s core activities. The two most prevalent motivations for outsourcing are cost savings and gaining expertise. For most, there are many questions regarding this practice in the compliance arena.

WHY? Today, many pieces of compliance offices are routinely outsourced to enable the compliance office to focus on the core elements of the program. Among the common outsourced functions to vendors are hotlines, sanction screening services, and training programs. In some cases, the reason to seek expert assistance arises upon departure that creates a gap where assistance is needed until a replacement can be hired. Also, an existing compliance program may need supplemental assistance to deal with added responsibilities, such as HIPAA Privacy/Security Officer support.

WHEN? Often the decision is made when there are identified weaknesses or gaps in operations, such as a vacancy in compliance, privacy and security officers. In other cases, it may be the need for quick fixes as result of government intervention, such as settlement mandates.

WHERE? Where do you find necessary compliance expertise to engage? The easiest starting point is checking the internet to find professional journal articles on the subject. This can provide additional insights into the subject, as well as identify experts on the subject. Also, an Internet search can identify firms that may provide the needed service.

WHO? Who are some of these experts that can fill gaps or supplement compliance programs that have built, assessed, and managed effective compliance programs? They are individuals with hands on experience in multiple circumstances and settings that make them an expert.The following are examples of experts with extensive compliance program consulting experience, as well as having served in multiple compliance officer roles:

  • Cornelia Dorfschmid, Phd, over 20 years of health care consulting experience with service on multiple occasions as designated/interim compliance officer with hospital systems and physician practices.
  • Steve Forman, CPA, 12 years as a health care consultant; 10 years as VP for Audit/Compliance at a hospital system; and multiple service as interim/designated compliance officer.
  • Suzanne Castaldo, JD, CHC, experienced consultant who served as interim/designated compliance officer several times
  • Thomas E. Herrmann, JD, 20 years with the Office of General Counsel to the IG; 6 years as Appellate Judge for the Medicare Appeal Council; and 5 years as a compliance consultant and multiple service as interim/designated compliance officer

HOW? How can an organization use compliance experts to best advantage? There are a lot of benefits in using qualified experts, but key in investing in hiring them is to bring an optimum return of benefit for the cost by ensuring a lot of added value. In addition to day-to-day management, consider including some of the following:

  1. Examine the program to confirm strengths, and identifying opportunities for improvement
  2. Conduct an independent evaluation of the program for senior management and board
  3. Review the Code and other written guidance
  4. Evaluate quality and effectiveness of compliance training
  5. Assess high-risk areas that warrant attention
  6. Assess resources needed to effectively operate the compliance program
  7. Have them identify and build metrics evidencing compliance program effectiveness
  8. Use them to assist in identification and evaluation of candidates for the permanent position
  9. Provide a “road map” for incoming compliance officer to follow

WHAT? What is the level of effort needed to use compliance experts in compliance programs?  For even large organizations, a true compliance expert can hold things together for several months without having to be full time on site. Most organizations can keep their compliance program efficiently using an expert for 50 to 80 hours per month for up to 6 months, before it becomes critical to have a permanent compliance officer put in place. For smaller organizations and most physician practices, the number of hours is often half that rate. With current technology and communication, not all hours need to be on site; however, the key is to have the expert on call and available to address any emergent issues. It is worth noting that the OIG has accepted the fact that for smaller organizations, it may make sense to engage a qualified expert as the Designated Compliance Officer. The OIG cites many reasons an organization may consider using an outside expert, instead of a W-2 full time employee.

For more information on this topic, contact Suzanne Castaldo, JD at scastaldo@strategicm.com.

 

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.

Connect with Richard Kusserow on LinkedIn.

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Copyright © 2020 Strategic Management Services, LLC. Published with permission.