What Compliance Officers Can Learn From OIG Compliance Guidance for Boards
For years, the HHS OIG has called for a “top-down” compliance program beginning at the Board level. If not done already, compliance officers should review OIG guidance for board members and begin educating and warning their senior management and Board oversight committees of their fiduciary obligations and the personal consequences for failing to perform them.
OIG ‘White Papers’ and CIAs are Must-Reads for Compliance Officers
White papers issued by the OIG and American Health Lawyers Association (AHLA) emphasize holding Boards more accountable for proper oversight of compliance within their organizations. Among them are: “An Integrated Approach to Corporate Compliance: A Resource for Health Care Organization Boards of Directors”; “Corporate Responsibility and Corporate Compliance: A Resource for Health Care Boards of Directors”; and the most recent, “Practical Guidance for Health Care Governing Boards on Compliance Oversight.” These white papers reveal how the OIG continues to evolve in its thinking, expectations, and focus regarding board accountability for providing proper oversight of an organization’s compliance program.
Tom Herrmann, JD, a former OIG executive and experienced compliance consultant, suggests that the “Practical Guidance” white paper was particularly significant. A close reading of this document is a must for compliance officers. It calls for Boards to engage Compliance Experts to assist them in meeting their obligations. Notably, it also provides language almost identical to that included in CIAs about Boards use of Compliance Experts. The weaker the Board oversight, the more stringent the requirements placed on the Board in the settlement agreement will be. In cases where the OIG finds that the Board has not been providing the proper oversight of the compliance program, CIAs will include mandates that require personal certifications by Board members. Compliance officers should review recent CIAs to learn what the OIG considers as best practices for Boards.
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CIA Board Member Certification Mandates are a Game Changer
Carrie Kusserow has twenty years experience as a compliance officer and consultant who has brought organizations through CIA mandates. She notes that the OIG has made clear that it intends to hold executives, program managers, compliance officers, and Board members personally responsible for compliance. The OIG CIAs commonly mandate certifications by individual Board members on the effectiveness of the compliance program. The CIAs often include a stipulated penalty for non-compliance with deadlines, as well as $50,000 in penalties for each false certification, which may also implicate the False Claims Act. This should be a wake-up call to ensure that an organization’s compliance program is functioning properly; and that it is receiving the appropriate oversight by both the executive leadership and the Board.
Boards Need “Compliance Literate” Members
Steve Forman, is a CPA with more than twenty years experience as a compliance officer, and compliance consultant. Forman has been engaged on many occasions as a Board Compliance Expert. He notes that CIAs now mandate Boards engage a Compliance Expert to assist them in meeting their obligations of oversight, and the Expert’s report is made part of each Annual Report filing. This is because most Board compliance oversight is from the Audit and Compliance Committee. As a result, audit issues affecting the bottom line of the organization often drive out compliance issues, which are typically not financial in nature. Those Board members with an accounting and legal background are focused in this direction, with little understanding of compliance. The result is that relatively few Boards have anyone with compliance expertise to assist in proper oversight and support for the compliance program. Forman’s best advice for Boards is to include someone who is “compliance literate” that knows what questions to ask, and how to assess program effectiveness. A compliance literate person is someone with experience and expertise as a compliance officer, or as a consultant to compliance programs.
Compliance Officers Shouldn’t Wait for Board Engagement of Experts
Suzanne Castaldo, JD, has been a compliance officer and advisor for many organizations. She sees the alternative of having Board members that are compliance literate is to follow the OIG’s advice and engage a Compliance Expert to fill that gap. She suggests that a preemptive move that compliance officers may wish to consider is to be the one to engage a Compliance Expert to assess the program, rather than waiting for the Board to do so. This way, the credit for evidencing an active program and identifying opportunities for improvement goes to the compliance officer; whereas, if engaged by the Board, the findings may appear to be negative for the compliance program.
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