Wolters Kluwer Holiday

We will not be posting today or Monday in commemoration of Memorial Day. We will resume our regular posting schedule on Tuesday, May 30.

Kusserow on Compliance: 4 out of 5 organizations under 1,000 employees overpay for their hotline

It is estimated that over 80 percent of health care organizations with fewer than 1,000 employees overpay their hotline vendor. The reasons for this vary.  For large scale vendors, higher overhead may cause difficulty scaling down their prices; smaller vendors may just be trying to wring out every dollar they can. Another problem among vendors is that some provide both answer-operated and web-based reporting systems, while others do not.   This variance in level of service is a complicating factor.  At any rate, only vendors that provide full-range coverage that offers live-operator answering, 24 hours a day, seven days a week, along with web-based reporting, should be used. For both services, anonymous reporting must be an option.

Fair pricing rates. Today, all health care organizations are cost-sensitive and seek reductions anywhere they can, without loss of quality of service. The general rule of thumb for the price of hotline vendor services for organizations under 1,000 employees that provide both operator-answered and web-based reporting system is that the rates for services should range from around a low of $500 per year to $1,000, depending on employee population. Keep in mind set-up costs for a new service, as well as the continuing service fees. For organization with greater employee populations, the service rate should not exceed $1 per employee per year. Those paying higher rates may want to investigate alternative providers to save expenses.

Recent trends in hotline reporting. Carrie Kusserow, a hotline expert with experience gained from running hotline vendor services and managing hotlines as a compliance officer, reports a significant increase in reporting rates on hotlines. She attributes this to a variety of factors. There has been increased promotion of reporting suspected violations by government agencies and compliance officers, coupled with whistleblower protection laws and regulations. Most organizations now have developed compliance programs that mirror the compliance guidance provided by the HHS Office of Inspector General (OIG).  Over time, this has taken hold and become standard operating practice.  This guidance emphasizes the need for organizational commitment to ensuring confidentiality and to those reporting problems, in addition to offering anonymity for those desiring it.  Kusserow quoted Compliance Resource Center reports of a significant trend in the health care sector of an increase in the percentage of anonymous hotline reports, with about three out of four now being submitted that way. In addition, Kusserow explained that compliance officers have become more professional in responding to and investigating complaints and allegations they receive.  This, in turn, has encouraged employees that their reporting will be taken seriously.  Furthermore, compliance training has reinforced the employee’s duty to report problems.

Jillian Bower, of the Compliance Resource Center, has identified another factor contributing to the increase in reporting: the addition of new avenues of communication. As a new generation of technically savvy employees entered the workforce, more employees feel more comfortable using web-based reporting tools; that is becoming the preferred method in increasing numbers.  She notes there has been an increasing percentage of employees who prefer submitting their hotline report through web-based systems, when given that option.   Today, the percentages reported through a live operator and via the web have reach near parity.  As such, it is important the vendor offer the web-based option, and those that do not should not be used.  The end result of all these changes is that the OIG’s advocacy of organizations developing alternative compliance communication channels is a reality.

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: Senior executive exposure to liability for failing to embrace compliance

As the headlines continue to point to major misconduct and scandals involving senior corporate executives, compliance officers need to refocus their efforts and address a critical need. All too often, compliance officers have difficulty in requiring board members and senior executives to be briefed on the compliance program activities, undergo annual compliance training, and generally provide serious oversight and support for the compliance program. Many Board members and senior executives dismiss this as a waste of time that can be better used to carry out the mission of the organization.  The reality is just the opposite.  Over the last couple of years, the rumblings have increased significantly from regulatory and enforcement authorities concerning executives and Board members failing in their fiduciary compliance responsibilities.  Just listing the names of some of the initiatives and policy statements on the subject should be sobering, such as the following:

  • Responsible Corporate Officer Doctrine, in which the HHS Office of Inspector General (OIG) used enhanced  program exclusion authority against owners, officers, and managing employees of companies that are subject to criminal or administrative sanctions;
  • Yates Memorandum, which seeks greater accountability from executives of organizations found to engage in wrongdoing by placing higher prospective priority on executives over organizations;
  • Evaluation of Corporate Compliance Programs,” guidance issued by the Department of Justice (DOJ) Fraud Section, which is being used to assess “top-down” compliance programs, beginning at the Board and executive levels and cascading down through all levels of management; and
  • corporate integrity agreements negotiated by the OIG with entities found engaging in wrongdoing that create many stringent requirements on corporate officers and Board members, including personal certifications under penalty of law and requirements for compliance for leadership.

All of this movement by the DOJ and OIG make it clear that regulators and enforcement agencies consider failure of executives and Board members in supporting, empowering and overseeing compliance as the most significant compliance risks for any organization. This places a great deal of pressure on compliance officers, who must find ways to engage senior executives and the Board to understand their personal exposure to liability for failing to meet their fiduciary obligations towards the compliance program.  This in turn needs to move toward comprehensive training and education on compliance and executives’ and Board members’ roles in ensuring its effectiveness.   Compliance officers should consider reviewing all the material, including that in the hyperlinks provided in this blog to gain a fuller understanding about executive and Board member liability for not paying sufficient attention to and support for 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.

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 and DOJ raising stakes on board compliance obligations

From the days of the first compliance guidance documents from the HHS Office of Inspector General (OIG), it has called for a “top-down” compliance program, beginning at the Board level. For example, it issued a joint White Paper, titled Practical Guidance for Health Care Governing Boards on Compliance Oversight,” which emphasized holding boards more accountable for proper oversight of compliance within their organizations. Language from these pronouncements about Board obligations and use of compliance experts is now included in corporate integrity agreements (CIAs). During the 2017 Health Care Compliance Association (HCCA) Compliance Institute, speakers from the OIG discussed a number of changes in CIAs, including new mandates for Board members. The OIG believes a key factor in determining effectiveness of the compliance program is how well the Board has been meeting its fiduciary duties and responsibilities for overseeing compliance. If it finds the organization has an effective program with proper oversight by the Board, the OIG may decide that a CIA is unnecessary or mitigate terms and conditions.   However, if it finds the program is inadequate, there will be a CIA and it will include stringent requirements for the Board. Among the best practices for Boards is to include one or more members who are “compliance literate” to ask the right questions and assess program effectiveness.  A compliance-literate person is someone with experience and expertise from having been a compliance officer or a consultant to compliance programs.  Alternatively, Boards should engage compliance experts to provide advice on asking compliance officers the right questions, evaluating the answers, and determining what metrics to rely upon in determining compliance program effectiveness.  By following one or both of these steps, Boards can go a long way to ensure they are meeting their fiduciary duties and responsibilities.

The Department of Justice (DOJ) has also been ramping up to better focus on Boards meeting their fiduciary obligations in guarding against corporate wrongdoing. Its Fraud Section published “Evaluation of Corporate Compliance Programs” as guidance for compliance officers on how the adequacy of their companies’ compliance programs is evaluated by prosecutors.   They laid out a series of questions prosecutors are likely to ask in evaluating the effectiveness of compliance programs. The following highlights questions that relate to Board involvement in compliance oversight.

  • What compliance expertise does the Board have or not have to meet its fiduciary obligations?
  • How frequently does the Board meet with the compliance officer and outside experts (auditors and consultants) outside the presence of management?
  • What information does the Board receive to assist it in its compliance oversight?
  • How does the Board evaluate the compliance program effectiveness?
  • How does the Board determine resources necessary for the operation and management of the compliance program?
  • How have management and the Board followed up on identified potential problems?

Tips and suggestions for compliance officers

Compliance officers should:

  • educate the Board on its fiduciary obligations and personal consequences for not meeting them;
  • meet with the Board regularly, including in executive session without management presence;
  • ensure that the Board receives all types of relevant audit findings and remediation progress reports on a regular basis;
  • urge the Board to include one or more members who are “compliance literate” to assist in evaluating compliance program effectiveness and be able to ask the right questions; and
  • engage compliance experts to assess the program before encountering the DOJ and OIG and use results to brief the Board evidencing they are providing active compliance oversight.

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.