Quality of the estimate. December, p. 47 - Health Care Compliance ...

Pay now or pay later ...continued from page 57
December 2011
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fraud. Internal audits detected
fraud in 18 months, as opposed
to 24 months for those without
an Internal Audit function. 5
Without a doubt, organizations
benefit from confidential reporting
mechanisms as well as auditing
and monitoring mechanisms
as part of an effective compliance
plan. In addition to providing a
mechanism to report fraud, waste,
and abuse, it is important to have
adequate internal controls.
Internal controls
Lack of adequate internal controls
was commonly cited as the factor
that allowed fraud to occur. 5
Internal controls are processes to
ensure the integrity of financial
and accounting information,
meet operational and profitability
targets, broadcast management
policies throughout the organization,
and comply with laws and
regulations. Lack of management
review and override of existing
controls open the doors for fraud
and abuse. A few procedures will
improve internal control.
1. Develop well-written policies
and procedures manuals which
address significant activities
and unique issues. Clearly
communicate employee responsibilities,
limits to authority,
performance standards, control
procedures, and reporting
relationships.
2. Train all employees on the policies
and procedures that pertain
to their job responsibilities.
3. Conduct mandatory compliance
and ethics training. With the
passage of the Deficit Reduction
Act of 2005, this is required for
health care providers.
4. Make sure that employees
comply with the Conflict of
Interest policy and disclose
potential conflicts of interest
(e.g., ownership interest in
companies doing business or
proposing to do business with
the organization).
5. Develop job descriptions that
clearly state responsibility for
internal control, and correctly
translate desired competence
levels into requisite knowledge,
skills, and experience. Make
sure that hiring practices result
in hiring qualified individuals.
6. Conduct employee performance
evaluations periodically.
Good performance should be
valued highly and recognized in
a positive manner.
7. Take appropriate disciplinary
action when an employee does
not comply with policies and procedures
or behavioral standards.
Compliance program
The Office of Inspector General
(OIG) contends that an effective
compliance plan helps detect and
prevent fraud, waste, and abuse
and will significantly reduce losses
to both the government and
private sectors. OIG recommends
that compliance plans include
the following seven elements that
are taken from the United States
Health Care Compliance Association • 888-580-8373 • www.hcca-info.org
Federal Sentencing Guidelines. 7
1. Establish compliance standards
and procedures that provide reasonable
assurance of reducing the
possibility of criminal conduct.
2. Assign high-level personnel
with overall responsibility to
oversee compliance.
3. Use due care not to delegate
substantial discretionary authority
to individuals whom the
organization knows, or should
have known through the exercise
of diligence, had a propensity
to engage in illegal activities
(i.e., screen employees).
4. Communicate compliance
standards and procedures
effectively to all employees
by requiring participation
in training programs and by
disseminating publications that
explain in a practical manner
what is required.
5. Achieve compliance with standards
by utilizing monitoring
and auditing systems designed
to provide reasonable assurance
of detecting misconduct
by employees and by having a
reporting system in place whereby
employees can report misconduct
without fear of retaliation.
6. Enforce standards through
appropriate disciplinary mechanisms,
including discipline
of individuals responsible for
failure to detect an offense.
7. Respond appropriately to
an offense once it has been
detected and take reasonable
steps to prevent further