The Tone at the Top Sets the Standard for an Effective Compliance Program

A recent news article headline reads, “London Cardiologist Sentenced for Health Care Fraud,” reporting that a Kentucky cardiologist was found guilty of implanting medically unnecessary pacemakers and will serve four years in prison. Purportedly, a number of patients testified at his trial that the cardiologist not only pressured patients into getting the pacemaker procedures but misled them about their health conditions. When we hear of such incidents, we ask, “How could that have occurred?” So we try to make ourselves feel better by saying, “That would never happen in our organization!” It’s our human nature to deny that this type of event could happen to us. Nevertheless, with the frequent publication of alerts and settlements on a variety of compliance issues, we should realize that adverse acts and events can and do happen, even in the [seemingly] best of organizations.

“Compliance Effectiveness” is the new buzz, particularly since the Department of Justice issued its Evaluation of Corporate Compliance Programs in 2015, followed soon after by the Office of Inspector General and Health Care Compliance Association’s joint guidance on evaluating the effectiveness of compliance programs. The concept of effectiveness in a compliance program has been around since the Federal Sentencing Guidelines were first issued, providing, “The organization’s governing authority shall be knowledgeable about the content and operation of the compliance and ethics program and shall exercise reasonable oversight with respect to the implementation and effectiveness of the compliance and ethics program” (emphasis added).

So what does it mean if something is effective? Simply, it means it works. In the world of compliance, the program “works” if it fulfills its duty of preventing, identifying, and correcting errors and potential fraud and abuse. However, creating an effective compliance program can be complicated because it relies on many factors, some of which are out of the compliance officer’s control. Arguably, the most important of these factors is the “tone at the top,” or how an organization’s Board and executive leaders position a compliance program and its compliance officer. Despite the Office of Inspector General’s hospital guidance on the need for the compliance officer to be in senior leadership, “reporting directly to the CEO and the governing body,” many compliance officers are lower level leaders, are not involved in strategic planning and decision-making, and/or have limited visibility and interaction with the executive team. A compliance-minded tone at the top ensures the compliance officer is a valued and significant member of the leadership team and that the compliance program itself is embedded into the values of the organization.

Compliance programs should be at least equivalent in importance to patient safety and quality improvement programs. Why? Because compliance is foundational. As the Kentucky case illustrates, without an effective compliance program, patient safety and quality of care issues will arise. Subjecting patients to medically unnecessary pacemaker procedures that carry the risk of potentially significant complications is both a quality-of-care and patient safety problem. An effective compliance program identifies such an activity as a potential risk issue and establishes a proactive audit program to ensure the performance of medically necessary procedures. When one hears of a case such as this one, questions arise. Did other staff overhear misleading information given to the patients? Did the cardiac catheterization lab staff question the necessity of the procedures? Was an anonymous reporting system available to report concerns? Did staff receive adequate training and understand they had an affirmative obligation to report? Were staff afraid of retaliation if they were to report? All of these questions reiterate why the fundamental compliance program elements need to be in place from a structural standpoint, and they need to be operationalized into the daily practices within an organization.

In addition to the quality of care/patient safety concerns and the physician’s liability, the situation described created problems for the hospital, too. Throughout the four-year period where unnecessary pacemakers were purportedly implanted, the hospital was billing for these procedures, creating a potential False Claims Act allegation against the hospital. An effective compliance program identifies risks, identifies errors, and takes corrective action when concerns are recognized and validated. Evaluating the effectiveness of a compliance program can be difficult from the inside for all of the reasons stated. Thus, many organizations and physician practices opt to have a third-party objective review of the effectiveness of their program.

In summary, the necessity of an effective compliance program cannot be overstated and begins with a “tone at the top” that sets the standards and expectations of all employees, contractors, physicians, and other providers. It is a tone that instills ethical and compliant values within the organization and creates a culture where compliance is spoken, recognized, and practiced on a daily basis, throughout the organization.

Resources Accessed November 29, 2018. Accessed November 29, 2018. Accessed November 29, 2018. Supplemental Compliance Program Guidance for Hospitals (70 Fed. Reg. 4858; January 31, 2005). Accessed November 29, 2018.

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