NEW COMPLIANCE PROGRAM GUIDANCE

New compliance program guidance has been issued by the Fraud Section of the Department of Justice (DOJ), according to an article published in the AHLA Weekly. Although the “Evaluation of Corporate Compliance Programs” (Guidance) is not specific to the healthcare industry, it does provide a practical set of benchmarks against which the audit & compliance committee, in consultation with the general counsel and the chief compliance officer, can evaluate the effectiveness of the health system’s compliance program.

New compliance program guidance has been issued by the Fraud Section of the Department of Justice (DOJ), according to an article published in the AHLA Weekly. Although the “Evaluation of Corporate Compliance Programs” (Guidance) is not specific to the healthcare industry, it does provide a practical set of benchmarks against which the audit & compliance committee, in consultation with the general counsel and the chief compliance officer, can evaluate the effectiveness of the health system’s compliance program.

Compliance Guidance based Questions

The Guidance is presented in the form of a series of substantive compliance-focused questions that the Fraud Division frequently considers when evaluating a corporate compliance program, for example:

  • Analysis and Remediation of Underlying Misconduct
  • [Role and Involvement of] Senior and Middle Management
  • Autonomy and Resources
  • Policies and Procedures
  • Risk Assessment
  • Training and Communication
  • Confidential Reporting and Investigation
  • Incentives and Disciplinary Measures
  • Continuous Improvement, Periodic Testing and Review
  • Third Party Management
  • Mergers and Acquisitions

These questions are drawn from multiple sources (e.g., the Federal Sentencing Guidelines and the United States Attorneys Manual, the joint DOJ/SEC Foreign Corrupt Practices Act guide and compliance guidance from the Organization for Economic Cooperation and Development).

Questions particularly relevant to healthcare organizations include those that focus on the conduct of senior and middle management; the internal stature of the compliance function; the autonomy of the compliance function; program funding and resources; corporate response to expressed compliance concerns; the process for responding to investigative findings; consistency of disciplinary measures; and periodic updating of procedures and practices.

Important questions focus on the board’s exercise of its compliance oversight duties—including whether relevant expertise is available on the board and how compliance related information provided to the board.

Lack of Formalized Compliance Programs

As an aside, this guidance underscores the lack of need for formalized compliance programs in small practices consistent with the OIG guidance. Small practices do not have mid or senior level managers or a board in most cases. Small physician practices can, however, take note of some of the key points in their attempts at operating in a compliant fashion. Specifically, how you respond to expressed compliance concerns, investigative findings, and how often you review documentation, coding and billing policies.

One theme that appears to run through the questions is a focus on how the corporation deals with misconduct after it has been identified. This focus goes beyond the traditional emphasis on proper incentives and appropriate discipline to an awareness of the root cause of the misconduct and changes the company made to reduce the potential that similar problems will reappear.

The release of this Guidance is a significant development in terms of assuring the most effective possible corporate compliance plan. It is directly relevant to any organization attempting to demonstrate a commitment to compliance and implementation of an “effective” compliance program. Compliance officers should review and share relevant portions and resulting recommendations with management.

HHS ANNOUNCES FRAUD RECOVERY STATISTICS

The American Health Lawyers association reported the following in its weekly Fraud and Abuse update:

The government won or negotiated more than $2.5 billion in healthcare fraud judgments and settlements in fiscal year (FY) 2016, the Departments of Health and Human Services (HHS) and Justice (DOJ) said in their Health Care Fraud and Abuse Control Program Annual Report for Fiscal Year 2016 released January 19.

The American Health Lawyers association reported the following in its weekly Fraud and Abuse update:

The government won or negotiated more than $2.5 billion in healthcare fraud judgments and settlements in fiscal year (FY) 2016, the Departments of Health and Human Services (HHS) and Justice (DOJ) said in their Health Care Fraud and Abuse Control Program Annual Report for Fiscal Year 2016 released January 19.

“In its twentieth year of operation, the Program’s continued success confirms the soundness of a collaborative approach to identify and prosecute the most egregious instances of health care fraud, to prevent future fraud and abuse, and to protect program beneficiaries,” the agencies said.

According to the report, as a result of 2016 and prior years’ efforts, over $3.3 billion was returned to the federal government or paid to private persons. The Medicare Trust Funds received transfers of approximately $1.7 billion, and $235.2 million in federal Medicaid funds was transferred to the Treasury in FY 2016, the report said.

  • The return on investment from 2014 to 2016 for the Health Care Fraud and Abuse Control Program (HCFAC)—which was established by the Health Insurance Portability and Accountability Act of 1996—is $5 returned for every $1 expended, the agencies said.
  • In FY 2016, DOJ opened 975 new criminal healthcare fraud investigations and filed criminal charges in 480 cases involving 802 defendants. A total of 658 defendants were convicted of healthcare fraud-related crimes during the year, the report said.
  • DOJ opened 930 new civil healthcare fraud investigations in FY 2016, with 1,422 civil health care fraud matters pending at the end of the fiscal year.
  • HHS Office of Inspector General (OIG) investigations resulted in 765 criminal actions in FY 2016 against individuals or entities.

OIG investigations also led to 690 civil actions, which include false claims and unjust-enrichment lawsuits filed in federal district court, civil monetary penalties settlements, and administrative recoveries related to provider self-disclosure matters, according to the report. OIG also excluded 3,635 individuals and entities in FY 2016.