JO - Health Care Compliance Association

Corporate Integrity Agreement ...continued from page 10
gov/guidelin.htm). The seven well-recognized
elements (paraphrased) include:
n Developing and distributing written standards
(e.g., Code of Conduct)
n Governing by a knowledgeable authority,
appointing a high level official(s) (e.g.,
compliance officer)
n Exercising care in delegating authority
(e.g., screened and restricted hiring of
ineligible persons or entities)
n Developing and implementing an education
and training program
n Using auditing and monitoring systems
and a disclosure mechanism to detect
criminal conduct
n Establishing and maintain consistent
enforcement and disciplinary procedures
n Ensuring the institutional response is reasonable
and appropriate to the offense
CIAs come in two flavors: sweet and sour
The sweet side first: If an organization has
entered into a CIA agreement, it means the
investigation stage, which could last several
years, is finally over. Federal investigations are
long and tiresome for both the investigator
and those being investigated. The investigation/pre-investigation
phase, often initiated
by a subpoena for documents, is routinely followed
by an interview process and culminates
with findings and negotiation of the settlement
agreement. During the course of the
investigation and subsequent negotiations,
tensions may be high, particularly if there
are possible criminal violations (potential jail
time) and significant fines at stake. Significant
effort by senior administrators is required
to facilitate the investigation, and this effort
acts as a major distraction in terms of time,
effort, etc. However, given the high stakes,
particularly the potential loss of federal revenue,
organizations should devote their best
talented and most experienced staff members
to represent them during this process. This is
the time to have your “A” team on the field.
Staff assigned to this process should possess
strong negotiation skills, tact, and an indepth
knowledge of the subject area.
The DOJ, OIG, and other federal investigations
are serious business. Criminal convictions,
possible debarment, and multi-million
dollar fines are not uncommon. From the
mid-1990s to the present, fines have ranged
from thousands to hundreds of millions of
dollars. Common mistakes made by organizations
during these investigations include
not cooperating fully with the investigation
(sometimes obstructing justice) and the
destruction of documents. When this occurs,
the organization’s culpability may rise and
settlement fines may include double or treble
damages. Damage calculations and culpability
“scoring” are described in Chapter 8 of the
Federal Sentencing Guidelines. The sweet side
is the investigation is over and the organization
can re-focus its efforts on its primary
mission (e.g., patient care, research, education,
etc.).
Another upside is that a CIA can provide
leverage for the board, senior administration,
and the compliance officer to increase
oversight, initiate a culture change, or implement
new policy. The status quo must be
abandoned: key members of senior management,
the faculty, and staff must embrace the
mandate for change. Often additional assets
will be required to comply with the compliance
agreement. In particular, there will likely
be costs associated with establishing a disclosure
process (commonly called a hotline):
hiring appropriate staff for the conduct of
education/training, space for new hires, costs
associated with an external audit requirement,
etc. The conclusion and final settlement
also mark the beginning of rebuilding the
organization’s external credibility and internal
self-esteem. Recriminations on who was
at fault should be cast aside. The survivors
should focus as a team to set a new course of
improvement and achievement. The signing
of the compliance agreement marks the end
of one process and opens the door for the
beginning of another, which can ultimately
improve the organization as a whole.
The sour side of a CIA: Change, individual
and institutional stress, costs, and diversion
of scarce resources, are examples of the sour
side of a CIA. In addition to the general
requirements outlined in the seven step process
for establishing a compliance program,
the CIA may include specific mandates
unique to the organization receiving the CIA.
For example:
n Budget and Accounting Records.
Enhance records maintenance to demonstrate
compliance with the applicable
regulations.
n Internal Audits. Conduct an annual
comprehensive audit of the organization’s
compliance with applicable federal regulations.
n External Audits. Retain an independent
auditing firm to perform a comprehensive
audit of internal controls.
n Implement and Report Remedial
Actions. Identify and report any material
violations and remediation efforts within a
specified time period.
n Training/Education. Initiate or expand
on-going training for each officer, faculty
member, physician, or relevant employee.
n Confidential Disclosure Program.
Establish or expand a confidential disclosure
mechanism.
n Annual Reporting. Submit an annual
report to the lead federal agency providing
a comprehensive description of the status
of organizational compliance.
n Record Retention. Retain documents in
accordance with FAR, OMB Circular
September 2006
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