16 Tips In Compliance Co-Sourcing
Compliance Offices must contend with a host of competing external regulatory requirements and internal demands. In order to meet these growing compliance obligations, Compliance Officers often employ one of the following operational structures: (1) In-Sourcing, where the Compliance Office meets obligations by using internal staff only; or (2) Co-sourcing, where the Compliance Officer uses on-call experts to supplement their efforts.
Co-sourced Compliance Benefits & Functions
Opting to employ a co-sourcing operational structure can lead to various benefits. For example, through the help of a co-sourced partner, Compliance Officers can readily fill any lack of expertise, gain access to specialized resources not available internally, easily address staffing issues and better meet the many requirements of an effective compliance program. Co-source functions include:
- Consultant serving the Compliance Officer as Deputy or Assistant Compliance Officer;
- Role of HIPAA Privacy and/or Security Officer;
- Ongoing Monitoring/Auditing Manager;
- Compliance Liaison (outlying facilities);
- Enterprise Risk Management/Analysis;
- Statistical Data Claims Analyst Expert;
- Hotline Management Operations Management;
- Compliance Investigations/Training;
- Arrangements Reviewer;
- Compliance Trainer/Programs; and
- Sanction Screening Operations
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Due to its many benefits and great flexibility, co-sourcing has evolved as the preferred method used by Compliance Officers to meet the growing compliance obligations required by the current legal and regulatory environment. However, when making the decision to use outside experts, it is crucial that organizations give careful consideration in contracting co-sourcing services to ensure maximum benefit and minimum detriment. The following considerations can help ensure that your organization makes the right decision about Co-sourcing:
16 Tips in Co-Sourcing
- Clearly define the duties, tasks, responsibilities, and methodology for the provider.
- Develop an agreement that defines what services the Co-source partner will provide.
- Integrate third-party staff with existing staff, so they work as part of the Compliance Office.
- Create a comprehensive Service Level Agreement (SLA).
- Set specific goals and objectives to be accomplished under the agreement.
- Establish clear communication channels with the co-source partner.
- The agreement should be flexible enough to expand or reduce levels of service as needed.
- Look for expert firms with industry specific expertise.
- Choose a co-sourcing partner with the appropriate skill set and resources to defined needs.
- Check experience and references of the firm.
- Ensure the individuals providing the co-source services are identified in the agreement.
- Seek references to ensure that potential partners have a record of delivering high quality service.
- Background check individuals to ensure they have needed skills, experience, and expertise.
- Require the co-source firm to adhere to GAGAS independence and objectivity standards.
- Have Co-sourced experts make periodic updates and regular meetings to review progress.
- Bigger is not always better. Smaller niche firms are more likely to provide more tailored yet less expensive services.