Defining Effective Compliance Programs

Evidencing an Effective Compliance Program in Healthcare

The Office of Inspector General’s (OIG) compliance guidance calls for all compliance programs to undergo independent effectiveness review and auditing. While Compliance Officers are responsible for ongoing monitoring of their program, including verifying that the program is operating properly, they cannot audit the program while remaining objective. Instead, parties that are independent from the organization must perform compliance program effectiveness audits to ensure credible and non-biased results. These independent parties should also verify ongoing monitoring of the program and validate that the organization is meeting program goals and objectives.

Despite the OIG’s recommendations for independent program review and auditing, the 2018 Healthcare Compliance Benchmark Survey conducted by SAI Global and Strategic Management revealed that most organizations do not have independent evaluations of the compliance program. Only 25 percent of surveyed organizations reported using outside experts to evaluate their program, and nearly 66 percent of organizations claimed that they rely upon self-assessment tools and checklists to evidence an effective compliance program. This practice does not meet necessary standards for ongoing auditing, and does not provide an objective or credible review of the compliance program.

Additionally, many organizations develop and administer their own compliance program effectiveness surveys to help monitor the compliance program. But outside parties, such as Boards of Directors and government oversight agencies, do not place much value on internally-conducted surveys. And in many cases, employees do not trust that these surveys will ensure anonymity in their responses, and it is difficult to know what the scores truly indicate. These issues can be easily remedied if an independent party implements the compliance surveys instead, which generates more reliable, objective data that successfully indicates the compliance program’s effectiveness.

How to Measure Compliance Program Effectiveness

Given the results of the 2018 Healthcare Compliance Benchmark Survey, many Compliance Officers may not have a sound understanding of what defines an effective program or how to best determine its effectiveness. The following is a working definition of compliance program effectiveness:

Effective compliance programs are defined as those that avoid or minimize liabilities, including legal or regulatory penalties and potential civil litigation. The challenge for developing an effective program is complicated by the ever-changing legal and regulatory environment. New laws and regulations come into play on a daily basis from all levels of government. To avoid having an ineffective compliance program, healthcare organizations and providers should develop effective processes, policies, and procedures to define appropriate conduct, train the organization’s staff, and then monitor the adherence to the processes, policies, and procedures. For most organizations, the biggest challenge is finding ways to evidence an effective compliance program, especially with verifiable metrics and identifying any gaps in the program.

Independent compliance program effectiveness evaluations are growing in importance and have been reinforced repeatedly by the OIG in their practical guidance. In fact, the OIG’s regulations on Corporate Integrity Agreements (CIAs) now mandate that Boards of Directors engage compliance experts to advise them on the compliance program and certify its effectiveness. Even without a CIA, any organization with a compliance program would benefit from a review by experienced compliance experts. These expert reviews help to identify current strengths and weaknesses in the program and highlight additional ways that the program can advance. Organizations can implement positive changes based on the experts’ findings, observations, and recommendations for program improvement, resulting in a more effective compliance program.

Interested in a Compliance Program Effectiveness Evaluation?

The experts at Strategic Management Services have over 25 years of experience assessing compliance program effectiveness. If you would like to speak to one of our consultants, you can call (703) 683-9600 or click here to contact us online.