Competence and Control

So far our columns this year have analyzed some of the 21 ways in which an effective compliance program can produce ongoing benefits for your company. They fall into three general categories: those that help you follow “The Rules”; those that help improve internal communications and personnel relations; and those that help you pursue growth opportunities. Let’s complete our discussion of the seven ways an effective compliance system can help you follow The Rules with the final three:

5) An effective compliance program demonstrates to the government that your company “has its act together”: It demonstrates your ability to create internal systems that permit ongoing self-assessment and self-policing. Investigators are more likely to give you the benefit of the doubt. Everyone—including the feds—knows that no system can ensure perfect compliance, but an effective program demonstrates that errors are mistakes and not willful or reckless. It demonstrates a sincere effort to catch and fix problems, and to minimize recurrences. An effective program can also make the government more likely to infer proper motives for issues that focus on intent and motive, such as those under the anti-kickback statutes. It can mean the difference between a long investigation and a relatively short inquiry.

6) Compliance programs will soon be mandatory: Under the PPACA, effective compliance programs will become mandatory in 2014, but compliance is a mindset or a culture far more than it is a written plan or specific policies and protocols. It takes time for a company to iron out a program’s rough spots. While a well-crafted program may become minimally effective after a short period of time, an HME company will not reap its full benefits until it has had at least a year to mature and evolve. By the time these programs become mandatory, smart companies will have already nurtured their culture of compliance into systems that take the fullest advantage of the programs’ many benefits. Also, as we will discuss in a future installment, smart HME companies will “market” their compliance programs’ effectiveness to enhance their attractiveness to Accountable Care Organizations and other health-care service collaborations. A compliance program that is already mature and effective by the time they are mandatory will give its company a competitive advantage in pursuing alliance opportunities.

7) If trouble comes and you didn’t do it, the government will do it for you: An increasingly large number of government fraud settlements require the wrongdoer to establish a corporate integrity plan, paid for by the company but supervised by an outside trustee and/or by the feds. These plans invariably include a limited or comprehensive compliance program. Those crafted by or with the supervision of the government nearly always include reporting and monitoring obligations that are more public, more burdensome and more costly than otherwise would be necessary. Plus the cost of programs created voluntarily are tax deductible as business expenses, while the cost of those created as part of a government settlement are not. Also, a compliance program created by an HME home-care company on its own initiative will evolve at the company’s own pace, emphasizing its unique strengths and weaknesses. On the other hand, government-mandated programs must be crafted quickly, without much field-testing and with the substantial burden of ongoing government scrutiny. In addition, a government-mandated compliance program is usually part of a settlement package which additionally includes fines and penalties of tens of thousands of dollars, or more. Even when resolution of the government investigation does not involve a corporate integrity plan, the HME company will remain on the “hit list” of the MAC, the ZPIC, the OIG and/or the Department of Justice for some time to come. Recurring scrutiny for the company is likely, because of the implicit expectation that “where there’s smoke, there’s fire.”

Before we leave our current discussion, remember that these benefits only apply to compliance programs that are effective. A compliance system must have clear policies that address how the company actually operates, addressing billing, medical records, contracting activity, marketing and all of the other areas that implicate regulatory compliance.

Note: Materials in this article have been prepared by the Health Law Center for general informational purposes only. This information does not constitute legal advice. You should not act, or refrain from acting, based upon any information in this presentation. Neither our presentation of such information nor your receipt of it creates nor will create an attorney-client relationship.