Making the Business Case for Compliance Resources

By Bret S. Bissey, MBA FACHE, CHC, CMPE
From Compliance Today, a publication for HCCA members

The healthcare compliance landscape has evolved rapidly over the past decade, especially within the past few years. From the Office of the Inspector General’s fraud alert for physician compensation arrangements in June 2015,[1] to the Department of Justice’s announcement in September 2015 that they intend to prosecute and potentially hold individuals liable for their involvement in fraud,[2] the need for a robust, state-of-the-art compliance program is at an all-time high. However, compliance professionals often find themselves fighting an uphill battle when speaking to C-suite executives and board members for the resources that are necessary to do the job properly. Many of us in the Compliance space struggle to understand, even with the financial pressures healthcare is facing, why anyone would cut or lessen the capabilities of an effective compliance program.

Headlines about million dollar settlement(s) resulting from some element of fraud or abuse are reported almost daily. Many of these are focused on inaccurate hospital or physician contracting practices which have led to accusations of Anti-Kickback Statue (AKS) or Stark Law violations. Historically, these million dollar settlements have included issues related to evaluation and management (E/M) billing, PATH guidelines, same-day stays, medically unnecessary care, sub-quality care, Stark and anti-kickback violations, inducements, bribes, excluded providers, and laboratory billing, among others. Regardless of the reasons, there has and continues to be tremendous compliance risk in today’s healthcare market.

Addressing any organizational resistance to allocating appropriate resources to the compliance program requires an immediate assessment of what is causing the C-suite and healthcare executives to consider downsizing compliance programs, and then being prepared to address each of the objections individually.

Understand what is driving these cuts

Many of our peers in the chief compliance officer role or chief legal officer role (being responsible for compliance) have to deal with the routine mandate from senior management to cut or trim their compliance resources. Several reasons for this approach might include:

• The organization does not understand the risk of non-compliance.
• The organization does not believe it will ever be investigated for non-compliant actions.
• The organization believes it can defend claims of non-compliance.
• The organization makes the management decision that it must cut compliance resources to protect its financial health.
• Leadership exhibits some unethical behaviors or qualities.

Know how to address these concerns

How does a compliance officer deal with each of these viewpoints?

The organization does not understand the risk of non-compliance

If you have C-suite executives or board members who don’t understand or appreciate the risk, this means you have not been effective in your compliance education. Begin by instituting a refined compliance education program targeted for those applicable individuals. Focus on the current high-risk compliance space in healthcare. If you cannot effectively convey this message internally, consider engaging an external expert for a presentation with your leadership and board to talk about what is going on in the healthcare industry related to compliance risk. We strongly advise against bringing in attorneys who do not have a specialized focus on healthcare compliance to do the presentation. Resist involving friends of the board, who are not compliance experts, to do the education. After completing compliance education, have each attendee certify that they understand the elements of your compliance program and have been educated about the importance of compliance within your organization.

The organization does not believe it will ever be investigated for non-compliant actions

Try to understand where this argument is originating from and confront it. There are numerous case studies to cite regarding hospitals and healthcare organizations that thought they would never be investigated. Present these case studies in a manner that is factual so that the audience can understand the risk. Reinforce the prevalence of whistleblowers and how an effective compliance program mitigates the risk. Historical observation has shown that, at times, those who push the “never happen here” rhetoric may have a direct benefit if an investigation breaks out. This could include work being generated for outside consultants or outside counsel. Determine if there are any potential conflicts of interests associated with your decision makers that could taint their support of your compliance program. This can be accomplished via a robust conflict-of-interest disclosure process.

The organization believes it can defend claims of noncompliance

Outlining the cost of legal expenses and consultants associated with an investigation, combined with the bad public perception health systems may endure related to non-compliance, is an excellent way to showcase the costly nature of this reactive compliance approach. For most healthcare providers, defense fees rarely make it into a hospital operating budget, but instead are viewed as a cost of doing business. Avoiding the potential large price tag associated with an investigation means more money that can be reinvested into the core functions of the healthcare system.

The organization makes the management decision that it must cut compliance resources to protect its financial health

This is a short-sighted strategy. Cutting aspects of the compliance program (e.g., staff, technology, consultants) tells a future investigator or whistleblower that the organization knew the risk, as demonstrated by previous expenditures for the compliance program, but were not committed to the same level of compliance in the future.

Leadership exhibits some unethical behaviors or qualities

If it becomes apparent that leadership does not care about the ethical obligations or does not want anyone looking into some of their business practices, then it is time to go directly to the board with your concerns. If the board members don’t support your need to have appropriate resources to perform the Compliance function, this is a red flag and likely means it’s time to look for other employment opportunities.

Compliance is an investment, not an expense

Healthcare organizations today have one of the most complicated business models ever created. Hospitals are difficult to organize and manage in the best of situations, but even more so under the stringent financial pressures they currently face. However, a critical component of the long-term viability of these organizations is a proactive compliance program that is appropriately supported with the proper resources. Demonstrate and “sell” to the C-suite and executive team that compliance is an investment and not an expense. When you invest in a strong compliance program, you are helping protect the long-term health of our organizations and communities.

Bret S. Bissey (bbissey@meditract.com) is Senior Vice President, Compliance Services at MediTract, Inc., Cedar Run, NJ

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[1] Health and Human Services, Office of the Inspector General: Fraud Alert: Physician Compensation Arrangements May Result in Significant Liability. June 9, 2015. Available at https://www.acponline.org/system/files/documents/running_practice/payment_coding/medicare/fraud-alert-2015.pdf

[2] Department of Justice, Sally Quillian Yates: Individual Accountability for Corporate Wrongdoing. September 9, 2015. Available at https://www.acponline.org/system/files/documents/running_practice/payment_coding/medicare/fraud-alert-2015.pdf