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Developing an Effective Compliance Program

According to the Office of Inspector General (OIG) guidance, every health care entity must have an effective compliance program. Failure to have a compliance program can increase potential culpability if health care fraud is identified within the health care entity and can lead to allegations of deliberate ignorance. If your health care entity does not have a compliance program in place, contact our experienced healthcare compliance attorneys today.

An effective compliance program is a proactive measure that can reduce fines and penalties resulting from health care fraud investigations and prosecutions by reducing the organization’s culpability score. The United States Sentencing Guidelines provide for reduced criminal fines and penalties for organizations, including healthcare organizations, that have implemented an effective compliance program prior to the offense. The OIG, for example, will consider the existence of an effective compliance program that pre-dated any governmental investigation when addressing the appropriateness of administrative penalties. Further, the False Claims Act provides that a person who has violated the FCA, but who voluntarily discloses the violation to the government, in certain circumstances, will be subject to double, as opposed to treble, damages.[i]

Moreover, an effective compliance program can actually prevent investigations and qui tam cases in the first place. By identifying and correcting improper payments, responding to a hotline and other complaints, and monitoring and self-auditing compliance with program requirements, an organization may prevent an investigation from ever happening. The government also takes into account whether or not the organization has an effective compliance program in place when making the decision whether or not to prosecute or impose penalties.[ii] Monitoring and auditing under a compliance program are essential to complying with federal overpayment or “reverse false claims” requirements, and to identify and self-report any violations of law or CMPs before an investigation begins. By returning overpayments on a timely basis and self-reporting violations, an organization can significantly reduce CMPs and other penalties.

An Effective Compliance Program Must Include All Seven Elements Found In The Sentencing Guidelines:

      • Written policies and standards of conduct.
      • Compliance officer, compliance committee.
      • Effective training and education.
      • Effective lines of communication, hotlines.
      • Enforcement through disciplinary actions.
      • Monitoring and auditing.
      • Prompt response and corrective action.

An effective compliance program demonstrates to employees and the community that the organization is committed to honesty, ethical behavior, and acting responsibly; it encourages employees to report problems, and it creates a process by which the organization can identify and prevent criminal and unethical conduct. It can also help to identify and correct compliance problems before they are discovered by the government or reported by a whistleblower.

The HHS-OIG has published Compliance Program Guidance[iii] for a number of healthcare industries, including hospitals, physicians, nursing facilities, hospices, home health agencies, clinical laboratories, durable medical equipment suppliers, and Medicare Advantage organizations. The HHS-OIG guidance for the client’s industry type should be carefully reviewed and used in developing a compliance program. If no guidance exists for the client, consult the guidelines for similar provider types.

[i] See 31 USC 3729(a).

[ii] USAM 9-28.800.

[iii] Department of Health and Human Services, Office of the Inspector General, Compliance Guidance, available at https://oig.hhs.gov/compliance/compliance-guidance/index.asp (last visited June 4, 2018).

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