AHLA
Corporate Compliance
and Corporate
Governance
Janine Sarti
General Counsel
Palomar Health
San Diego, CA
Fundamentals of Health Law ● November 3-5, 2013
10/25/2013
American Health Lawyers Association
Janine Sarti, Esq.
General Counsel
Palomar Health
October 29, 2012
Agenda
 Corporate Governance
 Setting the “Tone at the Top”
 How the Board affects the compliance function
 Governance of Not‐For‐Profit Corporations
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Increased Regulatory Environment of Corporate Compliance and Implications for Not‐For‐Profit Corporations
 How Boards and individuals have been affected by the Regulatory Environment
 St. Joseph Medical Center
 Cathedral Rock Nursing Homes
 Allergan Inc.
 Eli Lilly
 Quest Diagnostics
 Ciena Healthcare Management
 Tenet Healthcare
 US. v. Sulzbach
 US v. Stevens
 Lessons Learned
 Adapting
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Corporate Governance
 “Corporate governance refers to the set of systems, principles and processes by which a company is governed. They provide the guidelines as to how the company can be directed or controlled such that it can fulfill its goals and objectives in a manner that adds to the value of the company and is also beneficial for all stakeholders in the long term.”
 “Stakeholders in this case would include everyone ranging from the board of directors, management, shareholders to customers, employees and society.”
 “The management of the company hence assumes the role of a trustee for all others.”
Source: Lisa Mary Thomson, What is Corporate Governance?, THE
ECONOMIC TIMES, Jan. 18, 2009.
“Tone at the Top”
 The US Sentencing Guidelines and the Organization for Economic Co‐operation and Development (OECD) Good Practice Guidance on Internal Controls, Ethics, and Compliance emphasize that one of the key aspects for a best practices compliance program is the appropriate “Tone at the Top”
 “High‐level personnel and substantial authority personnel of the organization shall be knowledgeable about the content and operation of the compliance and ethics program…and shall promote an organizational culture that encourages ethical conduct and a commitment to compliance with the law.” – US Sentencing Guidelines
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Barriers to Establishing an Effective “Tone at the Top”
 In its 2003 report, the Commission on Public Trust and Private Enterprise cited a KPMG survey of various US industries which revealed that 37 percent of employees had, in the previous year, observed misconduct that they believed could result in a loss of public trust if it became known
 Factors which led to the misconduct:  Indifference and cynicism
 Pressure to meet schedules
 Pressure to hit unrealistic earnings goals
 A desire to succeed or advance careers
 Lack of knowledge of standards
Source: Fox, Thomas, The FCPA and Tone at the Top, July 23, 2012
Eliminating the Barriers and Establishing an Effective “Tone at the Top”
 Harvard Professor Lynn Sharp has proposed various factors which are critical to establishing an effective “Tone at the Top,” including:
 (1) The guiding values of a company must make sense and be 
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clearly communicated
(2) The company’s leader must be personally committed and willing to take action on the values
(3) A company’s system and structures must support its guiding principles
(4) A company’s values must be integrated into normal channels of management decision making and reflecting in the company’s critical decisions
(5) Managers must be empowered to make ethically sound decisions on a day‐t0‐day basis
Source: Larry Thompson, Speech to the State Bar of Texas Annual Meeting, citing work of Professor Lynn Sharp.
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Palomar Health: Example of a Corporate Governance System
Palomar Health Organizational Diagram – “Tone at the Top”
= Indirect Report
= Direct Report
Board of Directors
Chief Executive Officer
General Counsel Director Audit Services
Compliance
Officer
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Reasons for Dual Reporting
 Increased regulatory environment and the need to have a system of checks and balances
 Importance of having a system in place that supports and facilitates ethically sound decision making
Intersection of Governance and Compliance
The Governance Function and the Compliance Function
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Board of Directors
Committees of the Board (Meeting Frequency)
Audit & Compliance
(Monthly)
Community Relations (Bi‐Monthly)
Governance
(Monthly)
Human Resources (Monthly)
Facilities & Grounds (Monthly)
Quality (Monthly)
Finance
(Monthly)
Strategic Planning
(Monthly)
Audit and Compliance Committee
 Members:
 Chief Executive Officer
 Compliance Officer
 General Counsel
 Representatives from Medical Staff
 Internal Audit Officer
 Three Board members
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Audit and Compliance Committee Charter
 Purpose:
 The Audit and Compliance Committee (“Committee”) will assist the Board in the following items:
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Provide oversight for:
 The integrity of the organization’s financial statements
 The organization’s compliance with legal and regulatory requirements
 The selection, performance, qualifications, and independence of external auditors
 The performance of the organization’s internal audit and compliance functions
 The Committee will strive to improve and promote the organization’s internal audit and compliance policies. The Committee will foster open communication among external and internal auditors, compliance, finance, senior Administration, and the Board.
 The Committee Chair shall regularly report to, and review with the Board, any issues that arise with respect to the quality, operations, and integrity of the organization’s internal audit and compliance functions.
Compliance and Ethics Committee
 Purpose:
 The purpose of the Compliance and Ethics Committee is to ensure that issues related to ethical behavior and compliance at Palomar Health are subject to review by and have the support of a diverse group of individuals throughout the District. Members will be appointed annually by the Chief Executive Officer.
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Compliance and Ethics Committee
Members:
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Chief Financial Officer
Director Rehab Services
Internal Audit Officer
Director Clinical Resource Management
Medical Director Clinical Outreach Services
Director Home Health
Physician Advisor
Chief Senior Care Support Services Officer
Chief Quality Officer
General Counsel
Director Health Information Services (HIPAA Privacy Officer)
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Physician Advisor
Director Behavioral Health
Executive Director of a subsidiary
Director of Patient Financial Services
Compliance Officer
Corporate Controller
Chief Information Officer
Chief Human Resources Officer
Lab and Radiologic Services Administrator
Director of Perioperative and Women’s Services
Compliance Function Board of Directors
Internal Audit and Compliance Committee
Compliance and Ethics Committee
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Board Governance Committee
 Members:
 Chief Executive Officer
 General Counsel  Compliance Officer
 Chief Marketing and Communication Officer
 Three Board members
Board Governance Committee Charter
 Purpose:
 The Governance Committee of the Board of Directors of the District will: 
(i) Make recommendations regarding pending and existing federal, state, and local legislation which, in the committee’s opinion, may impact the District; 
(ii) Make an annual, comprehensive review of the District’s bylaws, policies and procedures, and receive reports regarding the same, and elicit recommendations on such issues from management;
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(iii) Review any initiation of legislation by the District;
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(iv) Review such other issues associated with the District and/or Board Governance and its effectiveness, including but not limited to Board member orientation and continuing education;
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(v) Make recommendations regarding the annual self‐assessment of the Board;
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(vi) Perform such other duties as may be assigned by the Board
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How the Board Affects Compliance Function
 Board Responsibilities:
 Define mission and purpose
 Hire, support, and assess president
 Long‐range planning for organization as a whole
 Resource oversight
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Budget, audit
 Ethical and legal accountability
 Self‐assessment
 Speak with one voice
How the Board Affects Compliance Function
 Board Duties:
 Duty of Care
 Duty of Loyalty
 Duty of Obedience
 Business Judgment Rule
 Best Practices
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Duty of Care
 Concepts
 Good faith
 No self‐interest
 Informed decision
 Business Judgment Rule
 Practices
 Attend all meetings
 Attend entire meeting
 Exercise independent judgment
 Act in the best interest of the corporation
 Have adequate information
 Ask questions
Duty of Loyalty
 Concepts:
 Self interest is subordinate
 Corporate opportunities
 Confidentiality
 Practices
 Conflicts Policy and Annual Disclosure Statement  Fully disclose individual transactions and abstain from vote
 Support board decisions
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Duty of Obedience
 Act with fidelity
 To the law
 To ethical principles
 To the mission and purpose of the corporation
 Practices
 Know the mission of the corporation
 Develop, approve, and oversee implementation of strategic plan
Business Judgment Rule
 Courts have been hesitant to allow litigants to second‐
guess corporate directors’ decisions when the corporate director undertook an action in good faith, exercised independent judgment, and took steps to be reasonably informed
 Protects directors of for‐profit corporations from having to second‐guess their actions
 Many courts have applied this rule to the not‐for‐profit context
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Fiduciary Responsibilities
 Concepts
 Practices
 As trustees of the  Staying objective, organization’s assets, unselfish, responsible, Board members must honest, trustworthy, and exercise due diligence to efficient
oversee that the  Acting for the good of the organization is well‐
organization
managed and that its  Exercise of reasonable care financial situation remains in all decision making, sound
without placing the  As stewards of public organization under trust, board members unnecessary risk
must always act for the  Ensuring adequate control good of the organization
mechanisms to prevent fraud
Source: Fiduciary Responsibilities of Board Members, BoardSource, 2010
Governance of Not‐For‐Profit Corporations
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Not‐For‐Profit Corporations
 Regulated at three levels
 State law
 Federal regulations pertaining to governance
 Oversight and enforcement by individual state attorneys general
Government’s Regulatory Tools
 False Claims Act
 Qui Tam Suits
 Corporate Integrity Agreements
 Deferred Prosecution Agreements/Non‐Prosecution Agreements
 Sarbanes‐Oxley
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False Claims Act
 Historically:
 Congress enacted the FCA during the Civil War to encourage and empower citizens to pursue fraud claims
 Modernly:
 Government uses the False Claims Act in its vigorous pursuit of companies that defraud the Medicaid program
Qui Tam
 Pursuant to the False Claims Act’s whistleblower provision, private parties can file an action on behalf of the United States and receive a portion of the proceeds of a settlement or judgment awarded against a defendant
 The prospect of a large financial reward creates an incentive for people to file such actions
 Case Example:
 Reston‐based Maximum, Inc. – a former division manager at Maximus filed a suit under the qui tam or whistleblower provisions of the FCA, which resulted in an investigation and revealed that the company had submitted claims to the Medicaid program for patients, whether or not they had actually received the relevant services. The whistleblower received $4.93 million as his share of the settlement 
*Note: The outcome of the government’s investigation was a: (1) deferred prosecution agreement; (2) civil settlement ($30.5 million); and (3) corporate integrity agreement
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Corporate Integrity Agreements
 The OIG often negotiates compliance obligations through Corporate Integrity Agreements as part of the settlement of federal health care program investigations arising under a variety of civil false claims statutes
 Usually proposed when incidents of fraud or abuse are discovered through audits or self‐disclosures
 Enable organizations to avoid exclusion from Medicare or Medicaid programs by establishing and demonstrating a more robust compliance framework
Deferred Prosecution Agreements and Non‐Prosecution Agreements
 Deferred Prosecution Agreements and Non‐Prosecution Agreements:
 These “settlement agreements” occupy a middle ground between a guilty plea that results in a company’s criminal conviction, and a declination that leaves the matter to a civil or regulatory resolution. – Gibson Dunn, 2011 Year‐End Update on Corporate Deferred Prosecution and Non‐
Prosecution Agreements, January 4, 2012
 In exchange for the Department of Justice’s agreement to forego indictment and prosecution, the company agrees to prevent further violations of the law and often to undertake specific compliance and cooperation obligations. – Gibson Dunn, 2011 Year‐End Update on Corporate Deferred Prosecution and Non‐Prosecution Agreements, January 4, 2012
 Deferred Prosecution Agreements (DPAs)
 Typically predicated upon the government’s formal filing of a charging document  Non‐Prosecution Agreements (NPAs)
 Formal charges are not filed and the agreement is maintained by the parties rather than being filed with a court
 Advantages of DPAs and NPAs:
 Enable prosecutors to obtain substantial fines and impose meaningful remediation and compliance conditions on companies that engage in wrongdoing
 Allow the companies under such agreements to continue operating without the possible consequences associated with prosecution
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Deferred Prosecution Agreements and Non‐Prosecution Agreements (cont.)
 During the last ten years, the U.S. Department of Justice has increasingly relied on Deferred Prosecution Agreements (DPAs) and Non‐Prosecution Agreements (NPAs) to resolve allegations of corporate criminal misconduct
 The United State Attorneys Office has created Health Care Fraud Unit, and has been aggressive in pursuing health care enforcement actions coupled with False Claims Act actions
 Example: Skanska USA Civil Northeast, Inc. – US Attorney of Southern District of New York brought a claim under the False Claims Act, which resulted in a Non‐
Prosecution Agreement and a penalty of $19,600,000
 “Hospitals colluding with marketers to fatten profits through illegal referrals for costly and sometimes needless medical services are pocketing millions of taxpayer dollars […] Our agents are monitoring such schemes, and those entering into similar sham contracts should expect investigation and prosecution.” – Glenn R. Ferry, Special Agent in Charge for the Los Angeles Region of the Office of Inspector General of the U.S. Department of Health and Human Services
Sarbanes‐Oxley
 Passed in 2002, SOX extended boards’ financial oversight responsibilities and imposed new financial disclosure requirements
 Purpose – enacted to deter fraud in publicly traded companies
 *Note: Some states have Sarbanes‐Oxley‐type requirements for Not‐For‐
Profits (e.g., New York, Connecticut, New Jersey, Massachusetts, California, Kansas, Maine, New Hampshire, Ohio, and Texas)
 Requirements:
 Independent and competent audit committee
 Rotate auditors
 Certified financial statements
 Insider transactions and conflicts of interest – SOX generally prohibits loans to any directors or executives of the company
 Disclosure (e.g., information on internal control mechanisms)
 Whistle‐Blower protection
 Intentional document destruction must be monitored, justified, and carefully administered
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How Boards Have Been Affected by the Regulatory Environment
 GlaxoSmithKline – 2012 (Violations of the Federal Food, Drug & Cosmetic Act (FDCA); False Claims Act)
 Criminal Charges
Pled guilty to 3 misdemeanor criminal violations of the FDCA
$1 billion criminal fine
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 False Claims Act
Settlement:
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$2 billion
Corporate Integrity Agreement
 St. Joseph Medical Center – Maryland, 2010 (False Claims Act)
 Settlement:
$22 Million
Corporate Integrity Agreement
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How Boards Have Been Affected by the Regulatory Environment
 Cathedral Rock Nursing Homes, 2010 (False Claims Act)
 Settlement:
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Whistleblowers will receive a share of the civil settlement in the amount of $94,200.00
Corporate Integrity Agreement
 Allergan Inc., 2010 (False Claims Act)
 Settlement:
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$225 Million
Corporate Integrity Agreement
 Eli Lilly, 2009 (False Claims Act)
 Settlement:
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$1.4 Billion
Corporate Integrity Agreement
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How Boards Have Been Affected by the Regulatory Environment
 Quest Diagnostics, 2009 (False Claims Act)
 Settlement:
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$302 Million
Corporate Integrity Agreement
 Ciena Healthcare Management, Inc., 2007 (False Claims Act)
 Settlement:
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$1.25 Million
Corporate Integrity Agreement
 Tenet Healthcare corporation, 2006 (False Claims Act)
 Settlement:
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$920 Million Corporate Integrity Agreement
US v. Sulzbach
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US v. Sulzbach – Overview
 US v. Sulzbach, 2007 (False Claims Act)
 Charge:
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In 2007, the government filed a False Claims Act complaint against Christi Sulzbach, alleging that she violated the False Claims Act by certifying her company’s compliance with healthcare laws, despite knowledge of Stark violations relating to agreements with primary care physicians at a Tenet hospital in Florida. This allegedly resulted in the submission of 70,000 false claims for $18 million in reimbursement.  Christi Sulzbach – former Associate General Counsel of Tenet Healthcare and Corporate Integrity Program Director
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Ms. Sulzbach’s total exposure under the complaint had been estimated at up to $31.5 million
 Resolution
 While the court eventually granted Sulzbach’s motion for summary judgment on the grounds that the case was barred by the Statute of Limitations, the case has significant implications
 It is important to separate the compliance function from the key management positions of General Counsel
 The OIG will hold individuals participating in oversight committees personally liable for failure to follow corporate integrity standards.
US v. Sulzbach – Background
 1994:
 Ms. Sulzbach was Associate General Counsel of National Medical Enterprises, Inc. (NME), a large hospital chain.
 1995:
 NME merged with American Medical Holdings, Inc. (AMI), and changed its name to Tenet Healthcare Corporation (Tenet).
 Ms. Sulzbach was elevated to the general counsel position at Tenet. She also took on the role as corporate integrity officer.
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US v. Sulzbach – The Timeline
1993 – 1994
June 1994
February 1997
• North Ridge Hospital, a Tenet hospital in Florida (acquired during NME’s acquisition of AMI), enters into employment agreements with 12 physicians.
• In 1994, National Medical Enterprises, Inc., Tenet’s predecessor, enters into: (1) a settlement agreement ($379 million) based on alleged kickbacks; and (2) a Corporate Integrity Agreement (CIA). *
• A Tenet executive familiar with the Northridge contracts sends a memo to his superior. In the memo, the executive raised questions about potential Stark Law issues under certain physician contracts, apparently including the North Ridge contracts.
• According to the complaint, all of these contracts were well above fair market value.
• Ms. Sulzbach, then NME’s General Counsel, is named Corporate Integrity Program Officer under the CIA.
• Memo is allegedly forwarded to Ms. Sulzbach, who then meets with the executive and an outside lawyer.
* NME’s CIA was one of the first executed. US v. Sulzbach – The Timeline (cont.)
May 1997
• Allegedly at the direction of Ms. Sulzbach, outside counsel produces a report concluding that the physician contracts identified in the Complaint raised serious potential Stark Law violations.
June 1997
July 31, 1997
• Outside counsel prepares a revised version of the May 1997 report, reaching the same conclusions.
• Ms. Sulzbach sends a memorandum to a corporate officer, directing the officer to implement the corrective action outside counsel identified and to provide Ms. Sulzbach with a written report on the status of the corrective action within 30 days.
• Sal Barbera, a former Tenet employee, files a sealed qui tam
complaint alleging Stark violations arising out of the North Ridge physician contracts.
= On or about June 27, 1997, after the outside counsel reports, but before the July 31 memo, Ms. Sulzbach signs Tenet’s annual compliance report under the CIA, which did not make any reference to the North Ridge physician contracts, and certified that Tenet was in material compliance with the CIA.
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US v. Sulzbach – The Timeline (cont.)
2001
2006
September 2007
• The government intervenes in the Barbera case, which commenced in 1997. • Tenet enters into a wide‐ranging $920 million settlement with the government relating to various claims of Medicare fraud and overpayments.
• Based on the information gleaned from the outside counsel documents, the government obtains sufficient information to hold Ms. Sulzbach personally liable.
*
• Case continues in litigation until 2004, during which period Tenet stated in its litigation filings that it would demonstrate that the contracts did not violate the Stark Law. Or, in the alternative, even if the contracts did violate Stark, Tenet’s employees lacked reason to believe that a violation existed and thus lacked the necessary scienter for False Claims Act liability.
*
= Litigation Note – Implications for Attorney‐Client Privilege: When the US intervened in the qui tam suit, it sought to compel production of the outside attorney’s report and argued that the crime‐fraud exception applied, referring at times directly to Sulzbach’s role. • United States brings a civil False Claims Act suit in the Southern District of Florida against Ms. Sulzbach.
While the US failed to obtain the outside counsel documents during the qui tam
litigation, Tenet agreed to turn the documents over in this 2006 settlement agreement. Litigation – Ms. Sulzbach’s Motion for Summary Judgment
Government’s Arguments
Ms. Sulzbach’s Arguments
 The statutory tolling provision  Government’s case against of 31 U.S.C. § 3731(b)(2) applies.
 Even though the government filed the case against Ms. Sulzbach a decade after the events at issue, it is not barred by the statute of limitations because it lacked essential evidence of Sulzbach’s scienter, until it received the outside counsel report from Tenet in 2006.
her under the False Claims Act is barred by the applicable statute of limitations
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Outcome  04/16/2012:
 United States District Court Judge Marra GRANTS Ms. Sulzbach’s Motion for Summary Judgment on the grounds that the government’s case was barred by the statute of limitations
 Rationale:
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Independent of the outside counsel report, Sulzbach had ample evidence that false claims were continuing to be submitted; the government, in turn, knew of this “ample evidence” years before it received a copy of the outside counsel report
What Went Wrong?
 By 2002, Ms. Sulzbach was wearing 3 different hats
General Counsel
Compliance Officer
Vice President
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What Went Wrong?
 As a result of the withheld information, the government claimed it was entitled to recover damages from Ms. Sulzbach.
 The government’s basis for such liability against Ms. Sulzbach:
 Ms. Sulzbach’s submission of false certifications
 Ms. Sulzbach’s failure to stop Tenet from violating the Stark Law
 Ms. Sulzbach’s failure to report Tenet’s violations
 Implications of Sulzbach’s actions:
 Permitted Tenet to receive payments to which it was not entitled
 Obstructed the Government’s efforts to discover and recover past improper payments
Sulzbach – Lessons Learned
 Government can and will use the federal False Claims Act against a lawyer who had no involvement in underlying services that violated laws
 If corporations try to hide the ball, the government will be more like to employ novel applications of laws to pursue a claim
 Government will hold people in positions of authority to a higher standard, especially attorneys who are expected to understand the important legal and ethical issues in the healthcare field
 The risk of legal exposure exists
 Signing declarations, signing certifications, making attestations
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United States v. Stevens
 Background:
 Lauren Stevens was the Vice President and Associate General Counsel of GSK, a company that manufactured and promoted Wellbutrin.  In 2002, the FDA opened an investigation to determine whether GSK had promoted its Wellbutrin drug for weight loss, a use not approved by the FDA. The FDA specifically asked GSK to provide it with materials related to Wellbutrin promotional programs sponsored by GSK.
 Ms. Stevens consulted with in house colleagues and outside counsel about responding to the FDA’s inquiry.
 Ms. Stevens relied on outside counsel’s advice and responded to the FDA’s inquiry accordingly. 
In reliance on outside counsel’s advice, Ms. Stevens did not produce physical copies of off‐label promotional and presentation materials, with which the doctors in question provided her during her internal investigation.  Indictment against Ms. Stevens:  One count of obstruction of a proceeding
 One count of falsification and concealment of documents
 Four counts of making a false statement
 Outcome:
 United States District Judge Roger Titus dismissed the government’s indictment
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“While Ms. Stevens' responses ‘may not have been perfect’ they were provided to the FDA ‘in the course of her bona fide legal representation of a client and in good faith reliance of both external and internal lawyers for GlaxoSmithKline.’” – Hess, Michael & Thomas Parker (Baker Donelson), Court Acquits Former GlaxoSmithKline Attorney, May 17, 2011.
“Even though some of the statements by Ms. Stevens were not true, the court held that ‘it is clear that they were made in good faith which would negate the requisite element required for all six of the crimes charged in this case.’” ‐ Hess, Michael & Thomas Parker (Baker Donelson), Court Acquits Former GlaxoSmithKline Attorney, May 17, 2011.
Stevens – Lessons Learned
 Know when to engage outside counsel
 When government officials initiate an investigation, make it clear to the officials that you will be relying, in good faith, on outside counsel’s advice
 Engage counsel early on
 Take advantage of the attorney‐client privilege and advice of counsel defense from the outset
 Review engagement letter with outside counsel carefully
 Explicitly state the extent to which in house counsel will rely on the advice of outside counsel
 Create a paper trail
 A paper trail can bolster your advice of counsel defense
 Educate your in house counsel
 Education can help protect you against criminal allegations
Source: Ober Kaler, Five Lessons Learned (The Hard Way?) For In House Counsel, Health Law Alert Newsletter (2011)
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Stevens – Lessons Learned (cont.)
 Crime Fraud Exception to the Attorney Client Privilege
 During the proceedings, Judge Titus noted that the government’s use of the crime fraud exception to force disclosure of clearly privileged documents was an “illustration of how aggressively the government prosecuted the case.”
Source: Department of Justice, DOJ Failed Case against GSK Staff Lawyer Lauren Stevens: Lessons Learned, Jan. 25, 2012
Adapting
 Office of the Inspector General’s seven minimum requirements of an effective compliance program
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The Seven Minimum Requirements of an Effective Compliance Program
 Seven elements of a comprehensive compliance program:
 (1) Written policies and procedures
 (2) Designation of a Compliance Officer and a Compliance Committee
 (3) Conducting effective training and education
 (4) Developing effective lines of communication
 (5) Enforcing standards through well‐publicized disciplinary guidelines
 (6) Auditing and monitoring
 (7) Responding to detected offenses and developing corrective action initiatives
Source: Federal Register / Vol. 63, No. 152 / Friday, August 7, 1998 / Notices
Development and Distribution of Written Policies and Procedures
 A comprehensive compliance program should include:
 The development and distribution of written standards of conduct, as well as written policies and procedures that: (1) promote the entity’s commitment to compliance (e.g., by including adherence to the compliance program as an element in evaluating managers and employees); and (2) address specific areas of potential fraud, such as claims development and submission processes, cost reporting, and financial relationships with physicians and other health care professionals and entities. 27
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Designation of a Compliance Officer and a Compliance Committee
 A comprehensive compliance program should include:
 The designation of a compliance officer and other appropriate bodies (e.g., a corporate compliance committee, charged with the responsibility for operating and monitoring the compliance program, and who reports directly to the CEO and the governing body).
Conducting Effective Training and Education
 A comprehensive compliance program should include:
 The development and implementation of regular, effective education and training programs for all affected employees.
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Developing Effective Lines of Communication  A comprehensive compliance program should include:
 The creation and maintenance of a process, such as a hotline or other reporting system, to receive complaints, and the adoption of procedures to protect the anonymity of complainants and to protect whistleblowers from retaliation.
Enforcing Standards
 A comprehensive compliance program should include:
 The development of a system to respond to allegations of improper/illegal activities and the enforcement of appropriate disciplinary action against employees who have violated internal compliance policies, applicable statutes, regulations, or Federal health care program requirements.
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Auditing and Monitoring
 A comprehensive compliance program should include:
 The use of audits and/or other evaluation techniques to monitor compliance and assist in the reduction of identified problem areas.
Responding Promptly to Detected Offenses and Developing Corrective Action  A comprehensive compliance program should include:
 The investigation and remediation of identified systemic problems and the development of policies addressing the non‐employment or retention of sanctioned individuals. 30
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Goal
 By establishing new internal compliance mechanisms—using the OIG’s seven minimum requirements as a benchmark—organizations can create an environment that facilitates and promotes a good “tone at the top”
 With a good “tone at the top,” the ethical consciousness of those in positions of authority will filter down to the company’s employees and create a culture of ethical integrity
Questions?
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