JO - Health Care Compliance Association

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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 12 Health Care Compliance Association • 888-580-8373 • www.hcca-info.org
A-110, or applicable regulation. n Debarred or Suspended Persons or Entities. Screen employees and applicants to avoid knowingly employing an individual or entity who is listed by a federal agency as debarred, suspended, or otherwise ineligible for federal programs. The Board, the Audit Committee, the President, and the Chief Compliance Officer: “A shotgun wedding of necessity” Board and Audit Committee Oversight. Boards and board members have been increasingly reviewing their responsibilities since the publication of the Sarbanes-Oxley Act of July 30, 2002. While mandated for publicly traded corporations, many nonprofit organizations have taken a “Best Practices” approach to comply with the spirit of the law. Subsequently, audit/compliance committees have taken an increasing interest and leadership role in regulatory oversight and external audit engagements. The CIA will undoubtedly be brought to the attention of an organization’s board and committee structure to provide understanding and future oversight of the CIA mandates. Most certainly, the chief compliance officer (CCO) or chief audit executive (CAE) will be directly interacting and providing mandated reporting to the board and the respective audit/compliance committee. The President’s (CEO) Role. Many CIAs require the president or chief executive officer (CEO) to certify to the lead federal agency that the organization has an adequate and appropriate comprehensive compliance program to prevent and detect fraud, abuse, and false billing for Medicare, Medicaid, federal grants, etc. The president will rely on the CCO for establishing the compliance program, reporting to the board, and providing the annual report to the federal agency with oversight responsibility. Visible leadership and resource support are key considerations. Ultimately, the president is responsible for all his or her organization does or fails to do. Chief Compliance Officer. The CCO is responsible for overall compliance operations, including billing processes, review of grants and contracts, development of training programs, and the submission of comprehensive reports at least annually to the board of trustees and the lead federal agency. He or she will chair an organizational compliance committee and coordinate enterprise-wide compliance operations. The CCO will be required to provide the comprehensive annual and institutional attestation report for the mandated period (usually five years). A team effort and a supporting institutional structure are requirements for success. Summary: Leadership obstacle or opportunity? The bottom line is that most organizations generally do not operate in reckless disregard of the law. As a former Inspector General and currently as a COO working with a university and academic medical center, I find the very opposite is true. Board members, particularly in nonprofit organizations, volunteer significant time without pay or benefits. Their intentions are focused on preserving the reputation, assets, and oversight of the administration to ensure appropriate stewardship of the organization. Additionally, presidents and CEOs, as a rule, do not intentionally guide their organizations down the unrighteous path of regulatory disregard. Senior leadership impacts the culture and the organizational culture influences attitudes relative to regulatory compliance. Inertia, lethargy, or the long-standing culture of an organization may be leadership challenges. Historical practices, coupled with a failure to stay abreast of change, is analogous to putting one’s head in the sand and waiting for the danger to go away. The reality is that regulations change daily, with new ones being published while older ones are thrown out or worse yet, retained to help preserve the arcane nature of the regulatory environment. Compliance programs and enhanced auditing activities are proactive tools that help organizations face regulatory obligations and decipher the secret code that enables progress without the fear of punishment. CIAs, although costly, can act as a change agent and are, figuratively, the sweet and sour fruit of the regulatory tree. n Errata We’d like to thank Gynelle Baccus, RN, PhD, Compliance Analyst Corporate Compliance, Southern Illinois HealthCare, and acknowledge her as the author of “First Year in Compliance- --A Survival Guide” published in the July 2006 Compliance Today, page 19. Thank you Gynelle Baccus, for your time and your talent. Health Care Compliance Association • 888-580-8373 • www.hcca-info.org September 2006 13
Page 1 and 2: Volume Eight Number Nine September
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