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The Chief Compliance Officer (CCO) is responsible for ongoing monitoring of their organization’s compliance program. However, the CCO cannot independently evaluate the organization’s operation, and any evaluation should provide convincing evidence to support the results. CCOs must decide which type of compliance program evaluation is most suitable to meet this need. One option is to conduct an independent and comprehensive expert compliance program Effectiveness Evaluation. A Gap Analysis review is another alternative that costs half as much as a full compliance program Effectiveness Evaluation. However, a lower cost review often comes with diminished value in terms of the results. In some instances, firms will offer to perform a compliance program Effectiveness Evaluation, but instead provide a compliance Gap Analysis review. Knowing the difference is critical to avoid this “bait and switch” problem.
Compliance Program Gap Analysis vs. Effectiveness Evaluations
Steve Forman, CPA, has over 30 years of healthcare compliance experience, including serving as an executive with the Department of Health and Human Services (HHS) Office of Inspector General (OIG), and as a compliance officer and compliance program advisor. He explains that compliance program Gap Analyses are primarily checklist style reviews of process documents, rather than effectiveness reviews that examine how well the program is actually functioning. With a compliance program Gap Analysis, the focus is on output metrics, rather than outcome metrics, related to program effectiveness. As a result, Gap Analyses are best suited for organizations with new or incomplete programs that desire assistance to complete the development of their program. A Gap Analysis can provide a road map for inexperienced CCOs to build their compliance program. However, these reviews lack the necessary breadth of a complete and effective evaluation. Further, individuals with limited experience and expertise may be the ones conducting these reviews; this may lead to results that provide less value to the organization. If an organization decides to use the Gap Analysis option, they should be careful when selecting their independent reviewers. Many larger firms use Gap Analyses as a way to gain footing in an organization, in order to provide more costly services in the future. If the scope of work is limited, the need for expertise is more significant.
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Kashish Parikh-Chopra, JD, MBA, CHC, CHPC, works with organizations that are considering whether to initiate a compliance program Gap Analysis or Effectiveness Evaluation. She notes that regulatory and enforcement authorities, including the OIG, Department of Justice (DOJ), and the U.S. Sentencing Commission, stress the importance of evidencing compliance program effectiveness. To do so, the reviews must be credible and focus on outcome metrics to verify how well the program is operating.
Need Help Choosing Between a Compliance Gap Analysis or a Program Effectiveness Evaluation?
If your organization is trying to determine whether a Gap Analysis or Effectiveness Evaluation is the right choice, our compliance experts can discuss the advantages and disadvantages of both options, along with their relative costs. Contact our compliance experts online or give us a call at (703) 683-9600 to speak with a consultant.