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January 17, 2024
An Ounce of Prevention: The Increasing Priority of Compliance Programs

An Ounce of Prevention: The Increasing Priority of Compliance Programs

Among the maxims we Americans have heard and repeated over the decades is one that lauds a common-sense approach to preparedness and self-preservation: “An ounce of prevention is worth a pound of cure.” The old chestnut is actually profound for those who opt to ponder its ultimate meaning. “If only I had let the faucet drip during last night’s hard freeze, I wouldn’t have woken up to a busted water pipe.” That’s the kind of rue and regret that gets expressed when the adage above is not observed. It’s always cheaper to prevent a disaster than the cost of the disaster itself.

An Ounce of Prevention: The Increasing Priority of Compliance Programs

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Fending Off Disaster

Are there disasters waiting to happen for those in hospital administration? You bet there are. But these can be significantly limited in size and scope where those facilities have a comprehensive and well-functioning corporate compliance program. Just like the compliance plan guidance that the Office of Inspector General (OIG) for the U.S. Department of Health and Human Services (HHS) has issued for medical groups, there are certain elements that should be a part of a hospital’s or health system’s compliance program. Indeed, the OIG has published at least two sets of compliance plan guidelines related to hospitals—one in 1998 and a supplemental document in 2005.

Part of a sound compliance program is identifying risk areas—especially those areas that could lead to fraud, waste and abuse in connection with a federal healthcare program, such as Medicare or Medicaid. Each facility should have a compliance officer who is tasked with identifying issues at their location that have a real potential for violating various federal regulations, such as coding, documentation of services, documentation retention, billing, etc. These risk areas should be identified, documented and disseminated in the form of training for appropriate personnel. Policies should be put in place to minimize these identified risks.

Ratcheting up the Pressure

In the fall of 2022, the U.S. Department of Justice (DOJ) promulgated new crime guidelines applicable to U.S. corporations. Known as the Monaco guidelines (named for Deputy Attorney General Lisa Monaco who formulated the guidelines), the DOJ document is primarily seen as an attempt by the federal government to put more teeth into prosecuting non-compliant behavior by American companies, including individuals within such companies. In fact, this may be the big takeaway from the Monaco guidelines.

Specifically, the guidelines provide for “individual accountability” as the primary emphasis of its new enforcement policy. In other words, it won’t be just the corporation’s board held responsible for improper acts, but the individuals who directly perpetrated them, whether that be the CEO, CFO or lower-level staffer. The guidelines provide for expedited powers to go after such individuals once identified.

Timeliness of cooperation in the DOJ’s investigations will also be taken into account when assigning penalties. It therefore will behoove the institution to move quickly to fully provide whatever information the government requests during its investigation into potential wrongdoing within the facility. Monaco stated that corporate leadership will be “on the clock,” indicating an expectation that there should be no stonewalling the investigative activity.

History of misconduct will also be a component in the assessment of penalties by the DOJ. Prior wrongdoing by the same individuals will be deemed of special concern. The agency will also take into consideration the corporation’s track record of response to inappropriate behavior among its personnel. Thus, it will be important for the hospital to ensure that its compliance plan contains real teeth when it comes to responding to bad behavior. That is, there should be documented consequences meted out to employees who engage in non-compliant behavior—up to and including termination.

So much unpleasantness can be avoided by simply having a compliance plan that actually works. It must target real areas of risk; it must have sufficient consequences for non-compliance; and it must be effectively communicated to staff members. After all, an ounce of prevention . . . well, you know.