Effective compliance programs provide reassurance to important third parties
by Neil B. Caesar
June 16, 2014

Too few home care companies embrace the range of benefits that compliance programs offer. These benefits focus on relationships with business colleagues, financiers and customers in order to obtain better funding, contracts, growth opportunities and more successful consumer and patient relationships. An effective compliance program provides reassurance to important third parties. Your compliance program can demonstrate that your company is committed to effective policing of its internal and external activities. More generally, your compliance program can demonstrate your company’s ability to create and operate an effective system for ongoing problem-solving. A program can assure many different outside parties that your company is unlikely to have substantial fraud or reimbursement problems. In addition, if your company’s compliance program satisfies the requirement of the federal guidelines, this gives further assurance to third parties that your company has minimized the potential sanctions for inadvertent violations of fraud or reimbursement rules. Which type of third party might have an interest in your compliance program? Primarily, your board of directors and owners—compliance programs suggest that they can delegate significant discretion to the management team. This is particularly important for outside directors and passive owners. It is essential for those companies that must comply with the Sarbanes-Oxley Act. Your company may participate in contracting networks, accountable care organizations and other provider alliances to offer services to health plans, outside businesses and other purchasers and users of health care. A home care company with an effective compliance program will be a more desirable partner in any such alliance. The presence of a compliance program should suggest to the alliance partners that your company will probably not contribute to reimbursement or other fraud problems which could lead to heightened scrutiny for the alliance. Conversely, if another alliance partner’s fraud problems result in heightened scrutiny for the alliance, your company’s compliance program will minimize the scrutiny likely to befall your company. Be sure to point this out if they don’t realize it. One key to success in any contracting network or other provider alliance is to choose partners who have their acts together and who can demonstrate superior value to the users and purchasers of health care. Ongoing compliance programs can be marketed by the provider alliance to purchasers and patients, as evidence of the organization’s—and by implication, the alliance’s—progressive, forward-thinking attitude and its commitment to the highest standards when providing patient care. Your company should also market its compliance program to private third-
party payers. Although many of the federal and state laws which expose health care organizations to sanctions for noncompliance relate only to Medicare, Medicaid and other federally reimbursed programs, health care fraud is a substantial problem for third-party payers and managed care organizations in general. Also, most states have laws which affect reimbursement and health care relationships. These laws generally affect all patients, regardless of coverage. An effective compliance program will address these rules as well. If these payers learn that your company has implemented a comprehensive compliance program, this suggests your company’s willingness and ability to comply with the payers’ reimbursement rules. This may lead to relaxed scrutiny by the payers, creating a presumption of legitimacy with ongoing billing activities. At a minimum, it demonstrates your willingness to improve constantly, which makes your company an attractive candidate for contracts, risk arrangements, etc. The presence of an effective compliance program may also be of value to the investment community. Banking institutions, venture capital funds and the like all seek assurance that your company is not in trouble with the government and is unlikely to invite trouble in the future. Your company’s ability to create and implement a successful compliance 
program demonstrates both a commitment to ethical performance and a demonstrated ability to set up internal 
systems for self-assessment. This ability is of value to many potential business allies, even parties with minimal interest in compliance issues.