Conflicts of Interest Remain a Major Risk Problem for Compliance Officers

• Most providers have inadequate processes
• Often too much of the burden falls on Compliance Officers
• Tips and advice from an expert to address this risk area

Steve Forman, CPA, is an expert on the Conflicts of Interest (COI) process for hospitals and other providers and has assisted many clients with this compliance risk area.  Mr. Forman finds that this specific high-risk area for hospitals and other healthcare entities is not receiving as much attention as it should.  He explains that COI is a cross cutting risk area that impacts: (1) supply chain and purchasing; (2) medical staff and workforce; (3) pharmacy and formularies; (4) contract management; and (5) research (if applicable). To properly address COI, stakeholders across various departments and service lines, such as the Compliance Office, Business Services, Supply Chain, Chief Medical Officer, Pharmacy, Finance, among others, must be committed to strengthening current, often ad hoc and informal, COI processes. He has found that most organizations have an array of formally adopted COI policies and procedures, as well as informal processes for how potential and actual COI documentation is collected, reviewed, and addressed. Also, the COI process is often decentralized throughout the system, resulting in a fragmented system that lacks transparency and communication. Organizations often lack a clear understanding of who has true ownership over the COI process.  However, gaining adequate commitment from the various stakeholders often proves to be very difficult for Compliance Officers, which has led many to seek Mr. Forman’s help in overcoming institutional resistance.  Also, the Compliance Office should not assume the entire burden for COI compliance.

Tips for Compliance Officers

1. Ensure that the COI process captures not only consulting relationships, but any relationships between physicians and drug manufacturers, suppliers, medical office space, etc.
2. Establish a standardized method regarding: (i) what constitutes a potential or actual COI; (ii) how COI will be documented; (iii) who needs access to COI disclosures and systems; (iv) who makes final decisions in resolving COI issues and disclosures; and (v) what follow-up is necessary to verify that recommended actions are taken and issues are resolved.
3. Establish clear COI procedures and also ensure that key stakeholder/departments and the workforce are educated on these standards.
4. Review existing policies, procedures, and systems to gain a full understanding of how the current COI process works, as well as other documentation related to current processes, and interview key leaders to gain insight on COI.
5. Identify recommendations to improve the COI process by analyzing data and perspectives gathered during the initial review on: (a) how a COI process can be improved; (b) the components needed in the process; and (c) how the organization can effectively operationalize the COI process in practice.
6. Update the COI process to include a clear method for determining: (a) who must submit COI information; (b) how the information is to be collected and controlled; (c) the COI review process; (d) the COI follow-up process, including informing people of the changes and what is expected of them; (e) that recommendations/decisions are being followed; and (f) that tracking/reporting violations of COI policies and process, and updating forms for such reporting, is currently ongoing.

For COI risk management assistance, contact our experts. You may reach  Suzanne Castaldo, JD at  [email protected].

About the Author

Richard P. Kusserow established Strategic Management Services, LLC, after retiring from being the DHHS Inspector General, and has assisted over 2,000 health care organizations and entities in developing, implementing and assessing compliance programs.