Kusserow on Compliance: Questions Boards should be asking their compliance officer

Effective compliance programs require top-down commitment beginning at the Board level to oversee and support its implementation and operations.  The Board should have a committee to do this. The OIG compliance guidance calls for a Board level committee to oversee the Compliance Program (CP). The HHS Inspector General, General Dan Levinson has noted that the best boards as those that are active, questioning, and exercise (constructive) skepticism in their oversight. He further stated that Boards have a duty to ask probing questions about the operation of the Compliance Program, including how the compliance reporting system works and what reports they can expect on the reporting of compliance issues. They have a duty to ask probing questions about the goals and objective of the compliance program. The problem for most Boards is to know what type of questions they should be asking. Compliance Officers should assist them with this problem; however they in turn should be prepared to provide full and complete answers to them. The OIG and American Health Lawyers Association developed specific suggested questions that Board’s should be asking about the compliance program that the compliance officer should be prepared to provide proper responses to them. They jointly produced “Corporate Responsibility and Corporate Compliance: A Resource for Health Care Boards of Directors” and “Corporate Responsibility and Health Care Quality (2007): A Resource for Health Care Boards of Directors.” The following are drawn from these advisory documents:

  1. Does the compliance officer have sufficient authority to implement the program?
  2. What are the resources necessary to properly implement operate the program?
  3. Has compliance officer been given the sufficient resources to carry out the mission?
  4. Have compliance-related responsibilities been delegated across all levels of management?
  5. What evidence is there that all employees held equally accountable for compliance?
  6. How has the code been incorporated into corporate policies across the organization?
  7. What evidence is there that the code is understood and accepted across organization?
  8. Has management widely publicized importance of the code to all of its employees?
  9. Are there compliance-related policies that address operational compliance risk areas?
  10. Are there policies/procedures for the compliance program operation?
  11. How often are compliance-related policies reviewed and updated?
  12. What is the scope of compliance-related education and training?
  13. What evidence is there of the effectiveness of compliance training is effective?
  14. What measures are taken to enforce training mandates?
  15. What evidence that employees understand what is expected of them regarding compliance?
  16. How is compliance risks identified?
  17. What is the evidence that identified compliance risks are being addressed?
  18. How is the compliance program structured to address such risks?
  19. Does the compliance program undergo periodical independent effectiveness evaluation?
  20. What is the process for the evaluation and responding to suspected compliance violations?
  21. What kind of training is provided to those who conduct investigation of reported violations?
  22. How does Compliance, HRM & Legal Counsel coordinate resolving compliance issues?
  23. What are the policies to ensure preservation of relevant compliance program documents and information?
  24. What policies address protection of “whistleblowers” and those accused of misconduct?
  25. What are the results of ongoing compliance monitoring by all program managers?
  26. How is ongoing compliance auditing being performed and by whom?
  27. How often is sanction-screening conducted with what results?
  28. What are the results from sanction-screening and are they certified by responsible parties?
  29. Has the compliance program been evaluated for effectiveness by a qualified independent reviewer?
  30. What evidence is there concerning hotline operation and follow-up investigations?
  31. What are the metrics being used to evidence compliance program effectiveness?
  32. What are the results of an independent review and assessment of the compliance program?


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.

Doctor, nurse indicted for fraudulent schemes involving unnecessary compounded medications

Separate indictments brought against a nurse practitioner and doctor by the Department of Justice (DOJ) alleged that the two individuals participated in separate but similar schemes to defraud TRICARE. Under the schemes, the nurse practitioner and doctor prescribed medically unnecessary compounded medications to individuals they had not examined, had a compounding pharmacy dispense the medications, and seek reimbursement from TRICARE.

The indictment against the nurse practitioner

According to the indictment, TRICARE reimbursed the compounding pharmacy more than $3.3 million for compounded medications prescribed by the nurse practitioner between February 2013 and October 2016, In addition, the nurse practitioner allegedly received more than $50,000 in kickback payments from a marketer for the compounding pharmacy in return for prescribing the compounded medications and making false statements to the FBI. The nurse practitioner was charged with conspiracy to commit health care fraud and wire fraud; wire fraud; conspiracy to distribute and dispense a controlled substance; distributing and dispensing of a controlled substance; conspiracy to solicit and receive health care kickbacks; soliciting and receiving health care kickbacks; and making false statements.

The indictment against the doctor

The indictment against the doctor stated that TRICARE reimbursed the compounding pharmacy more than $2.3 million for compounded medications prescribed by the doctor between October 2014 and December 2015. In response to an audit conducted by TRICARE, the doctor allegedly submitted falsified patient records to make it appear as though he had examined patients before prescribing the compounding medications. He was charged with conspiracy to commit health care fraud and wire fraud, wire fraud, conspiracy to distribute and dispense a controlled substance, distributing and dispensing a controlled substance, conspiracy to falsify records in a federal investigation and falsification of records in a federal investigation.

Behavioral health fraud perpetrators plead guilty to $1M Medicaid scheme

Two men, who created and managed a company that provided mental health care to Medicaid patients and collected over $1 million in Medicaid payments, pleaded guilty to conspiracy to commit health care fraud. The president of Coastal Bay Behavioral Health, Inc. (Coastal Bay) acknowledged in the plea agreements that the other participant was an “excluded provider,” who was prohibited from billing federal health care programs due to a 2011 conviction for health care fraud. Each man faces a maximum penalty of five years in prison and a fine of up to $250,000.

Although the president was aware that he was employing an excluded provider, he did not disclose this fact to the state Medicaid program. Using an alias, the provider performed a variety of functions, including hiring and firing individuals, seeing patients, and performing other managerial tasks. Coastal Bay received $1.2 million in reimbursements from Medicaid because of the provider’s alleged fraud, according to court papers.

The provider and his family received significant financial benefits due to his involvement in Coastal Bay. Specifically, the provider had access to a Coastal Bay credit card, which he used to make routine purchases at restaurants, furniture stores, gas stations, and other places in North Carolina, even though Coastal Bay had no operations in North Carolina. In addition, the provider and his immediate family received more than $10,000 in direct payment withdrawals from the Coastal Bay business account.

Fraudulent medical evaluations earn psychologist 25-year prison term

A former clinical psychologist received a 25-year prison sentence and was ordered to pay $93 million in restitution to HHS and the Social Security Administration (SSA) for his participation in a scheme to obtain over $550 million in fraudulent federal disability payments. In addition to the prison sentence, the clinical psychologist was ordered to pay restitution of over $93 million to the SSA and HHS.

The scheme was initiated by an SSA administrative law judge (ALJ) who reassigned, to himself, pending disability cases associated with a particular attorney. The ALJ contacted the attorney and urged him to provide either physical or mental medical documentation supporting disability determinations, regardless of the actual disability status of the claimants. In cases where medical documentation was required, the clinical psychologist participated in the scheme. The clinical psychologist signed medical evaluation forms prepared by the attorney, without reviewing those forms. The attorney paid the ALJ more than $609,000 for granting benefits in his cases and nearly $200,000 to the clinical psychologist for his participation. The attorney received over $7 million in attorney’s fees.

As a result of the scheme, the SSA paid more than $550 million in lifetime benefits to claimants. The ALJ and the attorney pleaded guilty, receiving sentences of four and 12 years, respectively. Subsequently, the attorney absconded from electronic monitoring and is now considered a fugitive.