Board Oversight is Critical for an Effective Compliance Program
Gaining interest and support from the Board of Directors (Board) is essential for any compliance program. Boards need to be sold on the idea that they bear the ultimate responsibility for an organization’s compliance. This can present a real challenge for compliance officers who work with Boards that do not heavily focus on compliance. Without Boards accepting responsibility, the compliance program can expect limited compliance program support and empowerment for their role as a compliance officer.
Carrie Kusserow, MA, CHC, CHPC, CCEP of Strategic Management Services, has 15 years of compliance experience, both as a compliance officer in major health care organizations and as a consultant leading compliance program evaluations. Ms. Kusserow believes that compliance officers must ensure that Board members are informed of the consequences of not assuring an effective compliance program. She presents three arguments when convincing Boards to provide adequate support and oversight of an organization’s compliance program:
- The compliance program is not a cost center or a drag on the organization; rather, it is a profit center because it helps to avoid expensive liabilities. Organizations can avoid many legal, regulatory, and enforcement actions with proper compliance protocols in place.
- An effective compliance program with ongoing monitoring and auditing reduces costly errors, especially during claims submission.
- Board members can be held accountable by the Department of Health and Human Services Office of Inspector General (OIG) and the Department of Justice (DOJ) for fraud cases involving the organization, resulting from their “negligent” oversight that could have enabled wrongful acts. However, if Board members put good faith interest and effort into compliance, they will be better protected against potential individual liability.
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Tom Herrmann, JD, served over 20 years in the OIG and has served as a compliance consultant and interim compliance officer over the past 10 years. He notes that since the Yates Memorandum was published, the DOJ has heavily focused on executive and Board level accountability. The OIG is following the Responsible Corporate Officer Doctrine in employing its exclusion authority. The underlying premise is that corporate officers and Board members are responsible for the organization’s activities falling within their oversight duties, even when they were unaware of such activities. Enforcers can use this doctrine to impose personal liability against these individuals. The Board should take notice of such actions; they provide clear evidence of what happens when Board members are unable to evidence active support for an organization’s compliance program. Compliance officers should also draw attention to the OIG’s Corporate Integrity Agreement (CIA) provisions that mandate attestations and certifications by executives and Board members.
Al Bassett, JD, is one of the country’s leading compliance program effectiveness evaluation experts. He notes that the OIG has made it very clear that Boards should receive the best data and information regarding the effectiveness of a compliance program by reviewing the results of outside and independently conducted program evaluations. Compliance officers can also use this data to make substantive contributions to Board meetings. Once the organization receives the results from a compliance survey, compliance officers should carefully plan how they will present the results to the Board. The compliance officer can best present the results by providing highlights, rather than a question-by-question summary, and by using a PowerPoint presentation, including graphs and charts, to report on key evaluation findings. The compliance officer should dedicate a significant portion of the presentation towards discussing recommendations to address evaluation findings. These should include suggested actions to improve employee understanding of their compliance obligations.
Steve Forman, CPA, has thirty years of experience with the OIG, and as a compliance officer and consultant. Mr. Forman has served as a Compliance Expert for several Boards under a CIA, and frequently reviews compliance programs. He always uses the Compliance Knowledge Survey© (Survey) from the Compliance Resource Center (CRC) to develop empirical evidence on the state of a compliance program. The Survey permits employees to respond to key questions that measure workforce members’ knowledge and understanding of the organization’s compliance program. CRC has designed the Survey to be independently administered and ensure respondent anonymity. The CRC can also benchmark the Survey results against the universe of organizations employing the same Survey to review their compliance programs. This kind of objective information permits Boards to gain insight on the progress of their compliance programs. Mr. Forman also notes that Boards should consider including one or more members who have extensive compliance experience, such as having served as a compliance officer or as a compliance consultant, as a best practice. These Board members can become advocates on behalf of the compliance program and lead program oversight efforts.
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