Blog Post

Differences Between Interim and Designated Compliance Officers

Richard P. Kusserow | November 2022

Prioritizing the integrity of a compliance program is essential for any healthcare organization, and selecting the right compliance officer is a critical decision. Whether an organization needs a designated compliance officer (DCO) for long-term program management or an interim compliance officer (ICO) to fill a temporary leadership gap, understanding the distinctions between these roles is crucial. 

Many organizations face situations where their compliance officer position becomes vacant, whether due to turnover, restructuring, or other unforeseen circumstances. The question then arises: Should they hire an interim compliance officer to maintain continuity or outsource the role entirely with a designated compliance officer? This article explores the differences between these roles and helps organizations determine the best option for their compliance needs. 

Interim and Designated Compliance Officers: Different Roles & Rules

It is common for organizations to ask about filling a compliance officer gap using an expert contractor. The need may arise as result of a temporary gap while seeking a permanent replacement or a decision to permanently outsource the function to a contractor. The use of a contractor as an Interim Compliance Officer (ICO) is quite different from a Designated Compliance Officer (DCO), and the rules governing when each is appropriate make it important to understand the difference.

What Is an Interim Compliance Officer (ICO)?ย 

Interim Compliance Officers are defined as contractor experts temporarily engaged to assume the duties of theย Compliance Officerย for a limited period to avoid the risk of permitting gaps in the operation of the compliance program for months on end.

The use of an ICO has become common, particularly as result of the labor disruption that arose from the COVID Pandemic. Compliance programs with gaps in staffing may rapidly degenerate. Engaging contractors to temporarily assume duties is preferable for most organizations than taking the risk of turning to internal, unqualified staff. Properly experienced and knowledgeable professionals can quickly assume duties and provide high-value services for day-to-day compliance program management, often on a part-time basis, while seeking a permanent replacement.ย ย 

What Is a Designated Compliance Officer (DCO)?ย 

Designated Compliance Officers are defined as individuals to whom an organization outsources the responsibilities of Compliance Officer to develop and manage the day-to-day operation of an organizationโ€™s Compliance Program. The HHS OIG sees this as a suitable solution ONLY for smaller health care organizations when hiring a full-time Compliance Officer is not financially justifiable. As such, DCOs normally are part-time contractors. However, the OIG does see larger organizations using this as an option, but they wonโ€™t permit using a DCO for organizations under a Corporate Integrity Agreement.

Benefits of Engaging with a Designated Compliance Officer ย 

Advantages of engaging a qualified DCO include being able to provide the benefits of wide experiences that include awareness of the regulatory environment and what it takes to have an effective program and being able to move quickly to efficiently address any issues that could result in liability.

Conclusion: Choosing Between An Interim Compliance Officer and Designated Compliance Officer 

When selecting either an ICO or DCO contractor, it is advisable to check references, experience in performing similar services in the past, require hefty tort liability insurance, and decide whether to engage a free-standing consultant or one anchored in an established firm. Taking these steps ensures that your organization partners with a qualified professional who can effectively manage compliance risks and maintain program integrity. Whether you need a temporary interim compliance officer to bridge a leadership gap or a designated compliance officer for long-term oversight, making the right choice is essential for regulatory success. 

For more answers to compliance FAQs, see www.compliance.com/faqs/ For expert guidance on selecting the right compliance officer solution, contact Strategic Management Services today. Additionally, keep up-to-date with Strategic Management Services by following us on LinkedIn. 

When selecting either an ICO or DCO contractor, it is advisable to check references, experience in performing similar services in the past, require hefty tort liability insurance, and decide whether to engage a free-standing consultant or one anchored in an established firm.

About the Author

Richard P. Kusserow established Strategic Management Services, LLC, after retiring from being the DHHS Inspector General, and has assisted over 3,000 health care organizations and entities in developing, implementing and assessing compliance programs.

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