Tactics to Maximize Your Board's Role in Compliance

Transcription

1 Tactics to Maximize Your Board's Role in Compliance

2 Presented by CJ Wolf MD, CHC, CPC, CCEP Healthicity Senior Compliance Executive Larry Plutko L.A. Plutko and Associates, LLC Disclaimer: Nothing in this presentation should be construed as legal advice nor relied upon as legal expertise.

3 Agenda 1 Board s Compliance Responsibilities 2 Board s Assessment of Compliance Program 3 Communicating with Your Board

4 1Board s Compliance Responsibilities

5 Caremark Decision re Caremark International Inc. Derivative Litigation, 698 A.2d 959 (Del. Ch. 1996) Fiduciary duty of board members includes duty of care Directors on board have duty to assure a corporate reporting system exists regarding compliance with laws and will be brought to attention of the board as a matter of ordinary operations

6 OIG Publication of Resources for Boards April 2003 SUGGESTED QUESTIONS FOR DIRECTORS Periodic consideration of the following questions and commentary may be helpful to a health care organization s Board of Directors.

7 OIG Publication of Resources for Boards July 2004 Emphasis on separation of General Counsel and Compliance Function Apparently, neither Tenet nor (its General Counsel) saw any conflict in her wearing two hats as Tenet s General Counsel and Chief Compliance Officer.... It doesn t take a pig farmer from Iowa to smell the stench of conflict in that arrangement. --U.S. Senator Charles Grassley (Iowa)

8 OIG Publication of Resources for Boards Published Dec Included government, compliance officers and board members The Board members advocated the importance of promoting a culture of compliance for employees, i.e., a culture that is open and where employees can feel comfortable to report potential violations and not fear retaliation or retribution for their actions.

9 OIG Publication of Resources for Boards Sept Focus of Board s role in oversight of quality of care and how it relates to compliance fraud theory also is applied in cases involving violations of regulatory requirements related to quality of care.

10 OIG Publication of Resources for Boards Published Jan Government-Industry Roundtable Focus on Long-Term Care Boards and Quality of Care A fundamental indicator of an organization s commitment to quality is whether quality issues are regularly reported to the board of directors.

11 OIG Publication of Resources for Boards Published March 2009 Government-Industry Roundtable Focus on Quality of Care for Boards of Acute Care Hospitals quality and compliance leaders can help the board understand large amounts of data and encourage board members to ask questions about the data.

12 OIG Publication of Resources for Boards August 2011 Particularly given the current corporate responsibility environment, health care organization directors should be concerned with the manner in which they carry out their duty to oversee corporate compliance programs.

13 OIG Publication of Resources for Boards Feb Learn how quality, patient safety and compliance information flows to the board. Educate the board on the structure of the compliance program, and the organization s fraud and abuse risk areas.

14 OIG Publication of Resources for Boards April 2015 Expectations for Board Oversight of Compliance Program Functions Roles and Relationships Reporting to the Board Identifying and Auditing Potential Risk Areas Encouraging Accountability and Compliance

15 2 Board Assessment of Compliance Program

16 Oversight Questions Board Compliance Program Oversight Structural Operational

17 Structural Questions 1. How is the compliance program structured and who are the key employees responsible for its implementation and operation? 2. How is the Board structured to oversee compliance issues? 3. How does the organization s compliance reporting system work? 4. How frequently does the Board receive reports about compliance issues?

18 Structural Questions 5. What are the goals of the organization s compliance program? 6. What are the inherent limitations in the compliance program? 7. How does the organization address these limitations? 8. Does the compliance program address the significant risks of the organization? 9. How were those risks determined and how are new compliance risks identified and incorporated into the program?

19 Structural Questions 10.What will be the level of resources necessary to implement the compliance program as envisioned by the Board? 11.How has management determined the adequacy of the resources dedicated to implementing and sustaining the compliance program?

20 Operational Questions Code of Conduct 1. How has the Code of Conduct or its equivalent been incorporated into corporate policies across the organization? 2. How do we know that the Code is understood and accepted across the organization? 3. Has management taken affirmative steps to publicize the importance of the Code to all of its employees?

21 Operational Questions Policies and Procedures 1. Has the organization implemented policies and procedures that address compliance risk areas and established internal controls to counter those vulnerabilities?

22 Operational Questions Compliance Infrastructure 1. Does the Compliance Officer have sufficient authority to implement the compliance program? 2. Has management provided the Compliance Officer with the autonomy and sufficient resources necessary to perform assessments and respond appropriately to misconduct?

23 Operational Questions 3. Have compliance-related responsibilities been assigned across the appropriate levels of the organization? 4. Are employees held accountable for meeting these compliance-related objectives during performance reviews?

24 Operational Questions Measures to Prevent Violations 1. What is the scope of compliance-related education and training across the organization? 2. Has the effectiveness of such training been assessed? 3. What policies/measures have been developed to enforce training requirements and to provide remedial training as warranted?

25 Operational Questions 4. How is the Board kept apprised of significant regulatory and industry developments affecting the organization s risk? 5. How is the compliance program structured to address such risks? 6. How are at risk operations assessed from a compliance perspective? 7. Is conformance with the organization s compliance program periodically evaluated? 8. Does the organization periodically evaluate the effectiveness of the compliance program?

26 Operational Questions Measures to Respond to Violations 1. What is the process by which the organization evaluates and responds to suspected compliance violations? 2. How are reporting systems, such as the compliance hotline, monitored to verify appropriate resolution of reported matters? 3. Does the organization have policies that address the appropriate protection of whistleblowers and those accused of misconduct?

27 Operational Questions 4. What is the process by which the organization evaluates and responds to suspected compliance violations? 5. What policies address the protection of employees and the preservation of relevant documents and information? 6. What guidelines have been established for reporting compliance violations to the Board? 7. What policies govern the reporting to government authorities of probable violations of law?

28 3 Communicating with Board

29 "What gets measured is what gets done" Use dashboards and benchmarks to measure the success of your organization as it improves outcomes. Track how your organization compares to its peers. Although a high level dashboard is best for the full board, it would be wise to use topic-specific scorecards to drill down at a board committee level (finance, strategy, planning, quality, and safety). To be most effective, the dashboards should be reviewed at every board meeting.

30 Educate the Board Learn how quality, patient safety and compliance information flows to the board. Educate the board on the structure of the compliance program, and the organization s fraud and abuse risk areas. Publicize training so employees know the board considers compliance a priority. Boards may want management to create a formal education calendar that ensures that Board members are periodically educated on the organizations highest risks.

31 Executive Sessions As part of its oversight responsibilities, the Board may want to consider conducting regular executive sessions (i.e., excluding senior management) with leadership from the compliance, legal, internal audit, and quality functions to encourage more open communication. Scheduling regular executive sessions creates a continuous expectation of open dialogue, rather than calling such a session only when a problem arises, and is helpful to avoid suspicion among management about why a special executive session is being called. OIG Industry Roundtable

32 Compliance Expertise on Board Tuomey Hospital CIA required: the Board retain an expert in corporate governance and compliance to assist the Board

33 Compliance Expertise on Board At a minimum, the Compliance Expert shall: attend each Board meeting at which the Compliance Officer is scheduled to present be kept apprised of any direct reports that the Compliance Officer otherwise makes to the Board assist the Board in reviewing and assessing Tuomey s Compliance Program offer recommendations periodically, as appropriate, to improve the effectiveness of Tuomey s Compliance Program conduct a comprehensive review of the effectiveness of Tuomey s Compliance Program

34 Compliance Expertise on Board a Board can raise its level of substantive expertise with respect to regulatory and compliance matters by adding to the Board, or periodically consulting with, an experienced regulatory, compliance, or legal professional. The presence of a professional with health care compliance expertise on the Board sends a strong message about the organization s commitment to compliance, provides a valuable resource to other Board members, and helps the Board better fulfill its oversight obligations.

35 Questions?