Steven Baruch - Health Care Compliance Association

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December 2010 24 The evolving role of the chief compliance and ethics officer A Survey by the HCCA and SCCE For more than 15 years, the role of the compliance and ethics officer has been growing. What was once an area of responsibility for a few individuals has grown to a full-fledged profession. 80% 70% 60% 50% 40% 30% 20% 10% 0% 75% 70% None 46% Recent changes to the Federal Sentencing Guidelines are elevating the importance of the compliance officer even higher. Under provisions that went into effect on November 1, 2010, organizations may now receive a reduction in fines and other penalties, even if senior executives are involved in the wrongdoing. However, to obtain that reduction, “individuals with operational responsibility for the compliance and ethics program [must] have direct reporting obligations to the organization’s governing authority or appropriate subgroup thereof.” By Adam Turteltaub CHC, CCEP 12% 7% 8% 9% This latest change provides governmental encouragement for the compliance officer to have a direct line to the board, elevating the importance of the compliance professional. Yet, this also raises the risks for compliance Figure 1 Severance package by type of organization Less than three months salary 20% 13% 12% 8% 8% 6% 3% 3% 3 – 6 months salary Severance Package by type Non -profit For profit, privately held For profit, publicly traded 7 months to a year’s salary More than one year’s salary officers. To senior leadership, a compliance officer may appear to be a potential challenge to their control of what the board sees. At the same time, there has been a growing movement, led in many ways by the US government, to move compliance out of the General Counsel’s office and make it a separate function. Such has been the case with several high profile settlements. To assess the impact that these forces have had on the Compliance office, and the protection being afforded to the compliance Health Care Compliance Association • 888-580-8373 • www.hcca-info.org officer, the HCCA and SCCE jointly fielded a survey of compliance and ethics professionals. The research focused on the protection accorded through severance agreements. It also examined where in the organizational chart the compliance officer is located. Findings Despite the increased emphasis on compliance and the growing understanding of the risks associated with the roles, compliance officers enjoy scant protection when it comes to severance. Of the more than 800 chief ethics and compliance officers (CECO) who responded to the survey, 71% have no severance package. Of those who did have a package, roughly one third had just three months or less. The story was very different, though for those working at publicly traded companies. More than half (54%) of respondents from publicly traded companies reported having a severance package, compared with 25% at non-profits and 30% at privately-held organizations (figure 1). For about a quarter of companies, the compliance program is housed in the General Counsel’s office, but here, too, the company type and industry played an important role. Figure 2 Compliance is housed in the General Counsel's office 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 21% Non-profit For profit, privately held For profit, publicly traded 27% 51%
100% Why is Compliance not a part of the General Counsel's office 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 86% 85% 50% Never has been in GC’s office 8% 7% 21% Moved some time ago Figure 3 7% 1% 1% Non-profit Moved because of FSG requirements For profit, privately held For profit, publicly traded Moved because of Pfizer CIA 8% 5% Other 21% Conclusions and Implications To act in a truly independent manner, more compliance and ethics professionals will need severance packages. Serving as a CECO requires a great deal of integrity and the willingness to ferret out wrongdoing wherever it may occur. That can, at times, include taking on senior executives and challenging well-established business practices. This puts the CECO at risk for termination, or calls for him or her to resign. The lack of adequate severance packages leaves compliance and ethics professionals at great risk, if their integrity and the company’s plans collide. Overall, 26% of respondents reported that compliance was housed in the GC’s office, but for non-healthcare companies, the figure was 42%, compared to just 20% for healthcare. Likewise, publicly traded companies were much more likely to make compliance a part of the GC’s office, with 51% reporting this as the structure. (figure 2). Just because the compliance function was located in the GC’s office did not necessarily mean the CECO was also the GC. Only about one quarter (26%) of those who reported that compliance was located in the GC’s office also reported that the CECO was the GC as well. Despite a growing consensus that Compliance should be independent from the GC’s office —and despite several settlements requiring it—companies that run Compliance out of the GC’s office generally plan on continuing to do so. Most of them (93%) report that they have no plan to move Compliance. For non-profits where Compliance is not a part of the GC’s office, the separation is not a recent phenomenon. A large majority (86%) of those surveyed reported that Compliance had never been a part of the GCs office, and another 8% reported that it had moved out of it that office some time ago (figure 3). For publicly traded companies, only one half reported that compliance had never been a part of the GC’s office. This is a much lower percentage than either non-profit or privately held organizations. And, for publicly traded companies in which Compliance had moved out of the GCs office, several reported it had done so because of a corporate integrity agreement. EOE/AA. Women, minorities, veterans and persons with disabilities are encouraged to apply. © 2010 NAS Health Care Compliance Association • 888-580-8373 • www.hcca-info.org (Media: delete copyright notice) Compliance Today Despite several indications that the US government is not pleased with compliance officers reporting to the General Counsel, there seems to be little movement to change the organizational chart. Companies that have Compliance reporting to the General Counsel appear content to let things remain as they are. n To view the complete survey results, visit www. www.hcca-info.org/EvolvingRole WE’VE BUILT OUR REPUTATION AS AN EXCELLENT EMPLOYER, ONE PERSON AT A TIME. The benefi ts of working at VCU Health System, one of the nation’s top teaching hospitals, are clear. We’re a Magnet ® hospital and one of Working Mother’s 100 Best Companies. A great place for work/life balance, we provide outstanding benefi ts that include child and elder care, fl exible work options, extensive medical benefi ts, competitive pay and prepaid tuition. HOSPITAL COMPLIANCE AUDITOR This position will lead the initiative in designing, implementing and performing audits for hospital billing within VCUHS Compliance Service’s Auditing and Monitoring Program. This position will report to the Director of Compliance Services, and be responsible for annual work plan proposals based on his/her analysis of information from the OIG, external enforcement and ongoing risk assessment. To qualify, you must have: • Bachelor’s degree in a related fi eld, preferably with a clinical background • Coding certifi cation • 3-5 years' experience in a medical center environment To apply and learn more, please visit our website www.VCUHS.jobs or contact Tricia Spencer at tspencer@mcvh-vcu.edu. December 2010 25
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Page 5 and 6: for the nurse with the bad back, th
Page 7 and 8: Mobility disabilities: A technical
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Page 49 and 50: New HCCA Members n Coquette O’Rou
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Steven Baruch - Health Care Compliance Association

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