Board Level Mandates in Corporate Integrity Agreements
Over the years, the OIG has used Corporate Integrity Agreements (CIAs) to advance policies requiring organizations to maintain compliance with applicable laws and regulations. CIAs go further than the OIG’s compliance guidance documents. Unlike guidance documents, CIAs are mandates rather than suggestions. In recent years, the OIG has been focusing more on Board accountability. The OIG, along with the American Health Lawyers Association (AHLA), issued white papers on individual and Board member fiduciary obligations. These white papers include guidance to help Board members demonstrate that they have followed a reasonable compliance oversight process. The most recent white paper addresses Board oversight and review of Compliance Program functions, including the relationships between the Board and management and the Board’s duty to act in good faith.
The OIG is now using CIAs to drive home the idea of compliance as a top-down effort beginning at the Board level. Therefore, it is not surprising to find CIAs mandating that Board members sign annual resolutions specifying the activities that the Board has undertaken to assess compliance with Federal health care program and CIA requirements. The Tenet Healthcare Corporation CIA pioneered this approach over a decade ago. It contained a requirement that the Board adhere to specific obligations including review and oversight of the compliance staff’s performance, and submission of a resolution describing the Board’s review to the OIG. However, this requirement no longer appears only in isolated cases. The OIG has been incorporating it more frequently and mandating that Board members attest to meeting their obligations. CIAs now often require Board members to provide the following statement to the OIG:
“The Board of Directors has made a reasonable inquiry into the operations of [organization]’s Compliance Program including the performance of the Compliance Officer and the Compliance Committee. Based on its inquiry and review, the Board has concluded that, to the best of its knowledge, [organization] has implemented an effective Compliance Program to meet Federal health care program requirements and the obligations of the CIA.”
CIAs also frequently include a provision requiring appointment of a Board Compliance Expert to assist the Board in fulfilling its obligations under the CIA. The Board Compliance Expert must attend each Board meeting that contains a presentation by the Compliance Officer, offer recommendations for improving Compliance Program effectiveness, and include its recommendations in a Compliance Review Report. This provision also prohibits hiring a Board Compliance Expert who has previously represented or been engaged by the organization or has had a relationship with the organization that would cause a reasonable person to question the Expert’s impartiality. The OIG is authorized to determine whether the Board Compliance Expert is acceptable, which could affect an organization’s ability to retain the Expert. The CIA from the recent landmark Stark case of Tuomey Healthcare System contains a good example of the application of these requirements.
According to Inspector General Daniel R. Levinson, moving forward, the OIG will ensure that organizations demonstrate commitment to compliance by agreeing to make significant changes to their Boards. The OIG has also stressed the importance of having a Board comprised mostly of new and independent members. Under the new CIAs, the OIG will be able to better monitor organizations’ compliance efforts.
TIPS FOR COMPLIANCE OFFICERS
- Ensure that the Board is aware of the growing trend of focusing its fiduciary obligations on Compliance Program oversight.
- Educate the Board on how to meet its Compliance Program obligations.
- Have all Board members sign an annual resolution recounting how they have met their Compliance Program obligations during the past year.
- Consider hiring established experts to conduct independent Compliance Program evaluations and provide the results to Board members to assist them in evidencing compliance oversight. However, ensure that the evaluation is not merely a checklist review with little substance or value in evidencing effectiveness.
- Periodically use independently developed, validated, tested, and administered compliance knowledge surveys. The OIG’s compliance guidance documents identify knowledge surveys as a means to evidence Compliance Program effectiveness.