Kusserow on Compliance: Compliance officers being effective

Today, organization leadership wants to feel confident that its compliance officer is effective in guarding against government intervention, litigation, and other unwanted events that give rise to liabilities. The challenge is how to convince everyone they are effective in what they do.  Experts with years of experience as both compliance officers and advisory compliance consultants to organizations were asked to provide some insights and suggestions for compliance officers.

Al Bassett, J.D., is a retired Deputy Inspector General and nationally recognized expert on health care compliance programs who has worked on evaluating effectiveness of dozens of compliance programs. He believes that to be effective, the compliance officers must always be selling the benefits of a successful program, as well as the consequences for not having one, to the Board and executive leadership. Once they are on board, then the selling must continue with managers and first line supervisors, and finally with the rank and file employees, physicians, and medical staff.

Carrie Kusserow has 15 years’ experience as a compliance officer, interim compliance officer, and compliance consultant to many organizations. She agrees and says, without question, the biggest sales target has to the Board, in that once it is sold, executive leadership will follow suit. It needs to know and understand what is required of it by enforcement and regulatory agencies, as well as the personal risks for ignoring its fiduciary compliance oversight responsibilities.  The HHS Office of Inspector General (OIG), along with the American Health Lawyers Association, has been issuing ‘White Papers” on Board obligations.  The most recent was Practical Guidance for Health Care Governing Boards on Compliance Oversight. The OIG is now incorporating this guidance into mandates for the CIAs.

Tom Herrmann, J.D., retired from the HHS OIG Office of Counsel to the Inspector General (IG) and then became a compliance officer and consultant to many organizations. He states that once there is “buy-in” from leadership, it is important to cultivate sound working relationships with other functions that overlap with compliance, including human resources (HR), Health Information Portability and Accountability Act (HIPAA) (P.L. 104-191) privacy and security officers, legal counsel, and internal audit.  In far too many organizations, these functions operate at cross purposes with one another and engage in turf battles, so as to have a serious negative impact on compliance officer effectiveness. There is a need to focus on developing cooperation and coordination of effort, along with developing protocols (policy documents) that establish working relationships and methods of cooperative effort.

Steve Forman, CPA, is another veteran of the HHS OIG, where he served as Director of Operations; he followed this with more than twenty years’ experience as a compliance officer and consultant. He sees the most successful and effective compliance officers as having been able to convince first-line managers to carry the compliance message to their subordinates by word and example.  The words they say and the attitudes they project to their staff are powerful, more so than pronouncements from the compliance officer or even the executive leadership.  Compliance officers selling themselves as being effective can be quickly enhanced by personally meeting with and talking to first-line supervisors and managers about the compliance program.

Jillian Bower has worked with dozens of compliance officers in advancing their programs. She points out that it is important to maintain ongoing metrics to benchmark progress of the compliance program to reassure executive leadership and the Board that the compliance officer is being effective in protecting the organization from unwanted events or acts that could give rise to liabilities.   She has found that one of the most useful means of doing this has been employing a professionally developed and independent administered compliance knowledge survey that evidences employee understanding of the program. The best surveys are anchored in a large database to permit comparison to other health care entities; and used periodically they also can measure benchmarks and progress in the program and further evidence compliance officer effectiveness.

Kash Chopra, J.D., has worked with a number of clients with their compliance programs, in addition to have served as an interim compliance officer. She believes effective compliance officers are successful in promoting employee compliance communication channels, particularly hotlines, that ensure complaints and allegations are promptly investigated and resolved professionally. If the workforce does not believe the organization is receptive to its concerns and nothing happens to its input, the compliance officer and program will never be fully effective. In addition, the compliance officer needs to be visible and available to hear employee concerns.  Chopra believes in walking around and being available to talk with people about their jobs, thoughts, and concerns.

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.

Kusserow on Compliance: DOJ issues guidelines on corporate compliance programs

In February 2017, the Department of Justice (DOJ) issued its“Evaluation of Corporate Compliance Programs,” which provides an explanation as to how compliance programs are evaluated by prosecutors. This 119-question resource offers great insights for compliance officers working to build and enhance their compliance programs. One thing to remember about these guidelines is that they relate to all industry sectors.   The Principles of Federal Prosecution of Business Organizations in the United States Attorney’s Manual describes specific factors that prosecutors should consider in conducting an investigation of a corporate entity, determining whether to bring charges, and negotiating plea or other agreements. These factors, commonly known as the Filip Factors, include “the existence and effectiveness of the corporation’s pre-existing compliance program” and the corporation’s remedial efforts “to implement an effective corporate compliance program or to improve an existing one.” The guidance was formulated to evaluate compliance programs after a violation has been discovered and examine the existing misconduct as the benchmark against which the compliance program will be evaluated. The Compliance Program Guidance is divided into 11 sections. Each category includes a list of questions the DOJ may consider when evaluating a company’s compliance program when it confronts corporate misconduct. The sections are:

  1. Analysis and Remediation of Underlying Conduct;
  2. Senior and Middle Management;
  3. Autonomy and Resources;
  4. Policies and Procedures;
  5. Risk Assessment;
  6. Training and Communications;
  7. Confidential Reporting and Investigation;
  8. Incentives and Disciplinary Measures;
  9. Continuous Improvement, Periodic Testing and Review;
  10. Third Party Management; and
  11. Mergers & Acquisitions.

The DOJ noted that in developing this document, it used the U.S. Sentencing Commission Guidelines. The document also relates back to a number of other DOJ reports, including the Yates Memorandum that focused on individual accountability in corporate investigations, and not just organizational wrongdoing. Although the compliance guidance documents issued by the HHS Office of Inspector General (OIG) are tailored to the health care sector, the reading of the DOJ evaluation document is relatable to them. All seven elements of an effective compliance program are included in the DOJ guidelines. It is worthwhile for compliance officers of health care entities to read this document and incorporate those areas identified by the DOJ for their own work place. There are plenty of ideas among the 119-questions outlined in their document for use by compliance officers to improve their organizations’ compliance programs.

Tip

The OIG calls for ongoing monitoring of the compliance program to ensure that it is up to date and operating the way it is designed to. In addition, there should be periodic, independent auditing of the program to verify that monitoring is taking place and validate that the results of operation are making the compliance program effective in achieving its goals. The U.S. Sentencing Commission in its standards for compliance and ethics programs also call for organizations to “evaluate periodically the effectiveness of the organization’s compliance and ethics program.” Now the DOJ is calling for the same thing.  As such, those organizations that have not had their compliance program subject to an independent compliance program effectiveness evaluation should consider having it now, incorporating the DOJ guidelines as part of their review.

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 Google+ or LinkedIn.

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

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.

Connect with Richard Kusserow on Google+ or LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

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

Kusserow on Compliance: OIG raises nominal value threshold for beneficiary gifts

A frequent issue that compliance officers have to address is whether offering something of value to beneficiaries may implicate federal law. The release by the HHS Office of Inspector General (OIG) of a new policy statement on the subject can answer those questions. Under section 1128A(a)(5) of the Social Security Act (SSA), enacted as part of the Health Care Portability and Accountability Act (HIPAA) (P.L. 104-191), a person who offers or transfers to a Medicare or Medicaid beneficiary any remuneration that the person knows or should know is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of Medicare or Medicaid payable items or services may be liable for civil monetary penalties (CMPs) of up to $10,000 for each wrongful act. Congress thus broadly prohibited offering remuneration to Medicare and Medicaid beneficiaries, subject to limited, well-defined exceptions. To the extent that providers have programs in place that do not meet any exception, the OIG, in exercising its enforcement discretion, will take into consideration whether the providers terminate prohibited programs expeditiously following publication of this Bulletin.

What this means is that offering valuable gifts to beneficiaries to influence their choice of a Medicare or Medicaid provider raises quality and cost concerns, and many providers may have an economic incentive to offset the additional costs attributable to the giveaway by providing unnecessary services or by substituting cheaper or lower quality services. The use of giveaways to attract business also favors large providers with greater financial resources for such activities, disadvantaging smaller providers and businesses.

The policy statement includes the following definitions:

  • Remuneration. Includes, without limitation, waivers of copayments and deductible amounts and transfers of items or services for free or for other than fair market value, with a limited number of exceptions.
  • Inducement. The offer of valuable (i.e., not inexpensive) goods and services as part of a marketing or promotional activity, regardless of whether the marketing or promotional activity is active or passive. In addition, the OIG considers the provision of free goods or services to existing customers who have an ongoing relationship with a provider likely to influence those customers’ future purchases.

Congress expressed its intent that inexpensive gifts of nominal value should be permitted.   In a Special Advisory Bulletin in 2002, the OIG expressed its interpretation of “inexpensive” or “nominal value” to mean a retail value of no more than $10 with an aggregate limit of $50 annually, noting it would periodically review these limits and adjust them according to inflation.  In December, 2016, the OIG adjusted the figures as to what it would interpret as “nominal value” for the first time since 2000 to be a retail value of no more than $15 per item, or $75 in the aggregate per patient on an annual basis.  It made it clear, however that the items may not be cash or cash equivalents.

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 Google+ or LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

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