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By Christopher Young
10/09/07
The Modern Compliance Officer
Christopher Young, CHC, President
Laboratory Management Support Services
In the late 1980s and early 1990s, clinical laboratories were in the news
for committing fraud and abuse against Medicare and Medicaid. Operation Labscam
and the Unbundling Project were in full swing. Laboratories were being prosecuted
for practices that had been going on for years without any one lab getting
prosecuted. As government cases against laboratories became public, the issues
of unbundling panels and profiles, medical necessity, proper orders for tests,
custom panels, and reflex testing were clarified through settlements and corporate
integrity agreements (CIA). Laboratory and other health-care newsletters reported
that the whistleblowers in the laboratory cases were being paid millions of
dollars for reporting the fraud to the government.
By 1996, all of the major independent laboratories and many hospital laboratories
had paid fines to the government and had CIAs imposed on them. The term “maximizing
reimbursement,” which had previously been a positive term used by consultants
to market their services, became a negative term, and laboratories started
writing off bills rather than take the risk of being viewed as overbilling
or committing fraud.
Compliance Program Guidance and Compliance Officers
When June
Gibbs Brown was appointed as Inspector General (IG) of Health and Human Services
in 1993, the general environment in the laboratory industry was one of paranoia
and confusion. Ms. Brown, who had developed what she called “Contractor
Risk Assessment Guides” while serving as the
IG for the Department of Defense, had a different approach to solving the
health-care fraud issues that were so prominent in the news at this time.
These guides provided defense contractors with information they could use
to self-monitor their interactions with the government and reduce the number
of government auditors overseeing their activities. Eventually, she introduced
voluntary compliance program guidance documents for various sectors of health
care, starting with clinical laboratories in March of 1997. This first attempt
was crude (compared to later guidance documents) and was revised and republished
in August of 1998 in the more familiar format and structure we see in the
industry today. Many laboratory compliance programs are based on the 1998
guidance, a fair number of which have not been modernized or updated since
then. These compliance programs were based on the Federal Sentencing Guidelines
that afforded a company certain benefits, such as reduced fines and less
onerous settlements, if they had such a program in place and the program
was deemed “effective.”
These voluntary programs included a requirement that the laboratory or other
health-care entity appoint an individual to provide oversight of the compliance
program and insure that it was effective. This individual was the Compliance
Officer and was supposed to be at a high enough management level within the
organization to be able to affect business decisions. These laboratory compliance
officers were often appointed rather than having volunteered or sought out
the job, often without any real knowledge of what it meant to be a compliance
officer and having the compliance responsibility added on to their existing
responsibilities. Furthermore, most of them had limited knowledge concerning
health-care law, and few had any idea of exactly how the laws under which laboratories
were being prosecuted fitted into the entire health-care legal structure. The
compliance profession in health care was nonexistent during these early days
and there were scant resources and no training opportunities for these newly
appointed compliance officers. They often, out of frustration or lack of authority,
used the existing paranoia and fear as the primary way to motivate their companies
to spend the resources and take the steps necessary to have an effective program,
the definition of which was not even clear in these early days. The natural
response was caution and the answer, “You can’t do that because
it would be out of compliance,” was often the safest and most effective
answer. They were often viewed negatively as a necessary evil by their own
companies.
The Modern Compliance Officer
Prosecutions in the laboratory
industry are rare these days. They are usually confined to the most egregious
or obvious cases while prosecutions in other sectors of health care continue
with record-breaking recoveries yearly. The government enforcement agencies
have more resources than ever, more sophisticated software, and greater experience
in prosecuting healthcare entities. It is not unreal to anticipate that laboratory
cases may be in the pipeline for prosecution in the future. Laboratory compliance
officers cannot drop their guard nor become complacent when it comes to compliance
issues. Nor can they let the current lull in laboratory-related cases allow
their companies to decrease their commitment to compliance. It is the compliance
officer’s
job and responsibility to see that does not happen.
Today’s laboratory compliance officers should know what their job entails
and what laws and regulations govern the laboratory industry. They have to
be able to demonstrate the effectiveness of the programs they oversee and their
own competency. They no longer have the luxury or excuse of ignorance or lack
of resources. It is time for laboratory compliance officers to take the next
step, to demonstrate that their program is integrated into the daily operation
of their laboratories and is able to detect or prevent compliance problems
and issues; in other words, is effective. How do you know if your compliance
program isn’t integrated or effective? Here are a few signs
and symptoms that it is not:
• The compliance officer does not have the autonomy or authority to affect
major decisions concerning the company business.
• The compliance officer’s decisions are constantly questioned by
other members of the management team.
• The same compliance issues come up over and over again.
• Serious problems develop without the compliance officer’s knowledge
or any reports to the compliance hotline or anonymous reporting system.
• Poor attendance at compliance committee meetings and a consistent pattern
of not completing tasks assigned to members.
• Employees do not take compliance training and education seriously.
• Audits and monitors are not being performed and reported.
• The compliance officer is not meeting regularly with the topmost management
of the company or a board member.
• New issues affecting the laboratory industry go undetected by the compliance
officer or the compliance committee.
• The compliance program and the training and education materials are not reviewed
nor updated annually.
So, what can the laboratory compliance officer do to address these problems
if one or more of them exist?
First and foremost, they must remain competent in their job and profession.
That means continuing education and constant monitoring of government activities,
laws, and regulations. Credibility and trust in the compliance officer’s
knowledge and judgment by other members of the management team are critical
elements in the fight to keep the compliance program relevant and effective.
It also means recognizing the problems in their own compliance program, which
may not be obvious to them. Here are some strategies to address these issues:
• Make sure all of the facts are gathered and properly analyzed before giving
an answer to a problem or issue.
• Always support decisions and recommendations with government documents and
regulations. If you can’t find relevant documents, say so and provide
your best guess as to which path to take.
• Work constantly to keep education and training materials up to date and relevant.
Don’t use the same educational materials repeatedly for annual training.
• Keep good records so you don’t have to solve the same problem over
and over again and so you can document your compliance efforts.
• Just as compliance officers hope that other managers will incorporate compliance
into their daily decision processes, compliance officers must incorporate business
concerns in their compliance decisions.
• Take time every day to monitor government communications, and maintain and
read a good assortment of compliance newsletters.
• Operate an audit and monitoring program that, at the least, is directed at
the highest risk areas of the laboratory or the systems that are most vulnerable
to failure. For instance, any system that is complex that is not automated
is a vulnerable system and likely prone to error.
• Make sure you are not making people do tasks in the name of compliance that
are not relevant or do not produce useful results. It is better to do fewer
relevant audits or monitors as opposed to many that have no benefit.
• Make certain the topmost managers and leaders in the company are aware of
the status of the compliance effort and any problems you are encountering in
carrying out you duties.
• Be willing to have an outside expert, carefully chosen, to review your compliance
program, including your competency.
Summary
The modern compliance officer works with other members of his/her management
team to maintain an effective compliance program without unnecessarily hindering
the laboratory’s business objectives. He or she does not invoke the laws
and regulations as a club but instead makes an effective case for recommendations
using laws and regulations to support the case so the management team can make
a good decision about a compliance problem or issue. In order to do this, compliance
offices must be confident in their abilities and knowledge, competent in carrying
out their duties, innovative in how they do their job, and diligent in ensuring
they maintain the resources, authority, and autonomy necessary to carry out
their primary responsibility: Protecting the company from getting into trouble
with the government without hindering its ability to carry out its business
and other missions.
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