Are
hospital and health system boards aware of compliance within your
organization? On April 20th,
the Office of Inspector General (“OIG”) of the U.S. Department of Health and
Human Services (“HHS”), in collaboration with various healthcare and legal
compliance organizations, published a report advising health care organizations
that compliance needs to be an integral issue for health care boards. Specifically, HHS published the report
titled, Practical Guidance for Health Care Governing
Boards on Compliance Oversight (the “Report”). The Report addressed various issues relating
to a board’s oversight and review of compliance program functions.
The
Report states that one of the first areas boards should focus on relates to
understanding the actual expectations the government has with respect to board
oversight of compliance program functions.
Although the Report notes that a board must make inquiries to ensure information
and reporting systems exist, the board must also confirm that the reporting
system is adequate to ensure compliance issues are presented to the board. Further, the Report explains that boards must
develop a formal plan to keep informed of regulatory and compliance
changes.
One
method to ensure the board is able to analyze and understand compliance related
issues is to utilize the expertise of others to assist in fulfilling this
duty. Specifically, the Report advises
that an expert to the board can assist the board in identification of risk
areas, provide insight into best practices in governance, and provide
consultations on other substantive or investigative matters. While there is no one-size fits all standard
for health care organization boards, the Report indicates that boards have a
responsibility to ensure they understand compliance functions, are aware of
compliance issues within the organization, and receive expert advice to ensure
the board can act upon those issues.
The
Report also discusses various issues of which boards should be aware. This includes the roles and relationships
between the audit, compliance, and legal functions. With respect to each of these areas, HHS
believes health care boards should be able to evaluate the adequacy and
performance of such functions on a periodic basis. Further, boards are expected to set and
enforce expectations related to receiving compliance information from various
functions within an organization. One
issue that is stressed within the Report is the need for regular reports from
an independent perspective. Finally, the
Report addresses the need for boards to understand active monitoring of risk
areas as well as encouraging accountability and compliance as an
enterprise-wide responsibility.
Krieg DeVault has significant experience in this
area as Partner and Health Care Practice Group Leader Bob Wade is currently the Compliance Expert to the Board of Halifax Health,
a 678-bed hospital system based in Daytona Beach, Florida. In March 2014,
Halifax Health signed a Corporate Integrity Agreement (“CIA”) with the OIG as
part of an $85 million settlement with the U.S. Department of Justice over
alleged illegal contracts with physicians, that violated the Stark Law as well
submitting false Medicare claims to the federal government. This settlement is
the largest Stark Law settlement involving a hospital system to date. Under their CIA, the OIG mandated a
Compliance Expert to the Board. This
Report, and Bob Wade’s recent appointment, highlight that the OIG and HHS are
insisting on enterprise-wide compliance from the board level.
If
you have any questions or concerns related to the health care organization
board compliance, or the Report, please feel free
to contact Robert A. Wade
at (574) 485-2002 or Alex T. Krouse
at (574) 485-2003.