Taking steps toward a compliance program

Seven key areas your plan should cover

TheFederal Sentencing Guidelineslists seven essential elements that a corporate compliance program must contain. Basing his plan on these elements,Larry Leahydirector of program integrity for Ruth Constant and Associates of Victoria, TX, identified seven steps to developing his own plan.

Although each home care agency’s program will be different, any good plan should include these elements, says Leahy, whose organization comprises three freestanding home health agencies, all in Texas — Beaumont Home Health Services, Port Arthur Home Health Services, and Wichita Falls Home Health Services. Leahy oversees compliance programs for the three agencies, founded by Ruth Constant RN, BSN, MSN, EdD, who serves as president and administrator.

Both Leahy and Constant warn that the development of a compliance program takes a firm commitment, both to ethics and time. And any compliance program, Leahy notes, begins with the support of your board of directors. "You
get a resolution from the board of directors endorsing compliance right off," says Leahy, "If they don’t understand, you educate them. Our board endorsed the concept and authorized me to move forward." (See Board of Directors Resolutions, pp. 19-20.)

The seven elements as listed in the Federal Sentencing Guidelines re as follows:

1. assigning a high level person or group to oversee the plan;

2. establishing rules and procedures that will be reasonably reduce the prospect of illegal or wrongful acts;

3. instituting policies that prevent assignment of substantial discretionary to persons that the company knew or should have known had the propensity to commit illegal acts;

4. assuring effective communication of program rules and procedures to all employees;

5. taking reasonable steps to monitor and audit operations to detect criminal conduct including establishing a system for anonymous reporting of suspected illegal conduct;

6. using disciplinary procedures, employee annual review, and employee counseling programs to instruct employees on instances creating the duty to report suspected criminal conduct;

. establishing appropriate responses to offenses and amending ineffective compliance plan procedures to prevent offenses when necessary.

Leahy began putting his plan together in 1995, and he estimates it took him about two years before it was fully implemented. It is now detailed for employees in the company’s Compliance Program Manual

"After the home office staff reviewed it in July 1997," recalls Constant, "the plan was approved in its final draft. We have since seen revisions that need to be made; in fact, we are continually revising it."

To facilitate periodic plan revisions, Ruth Constant and Associates established a Compliance Oversight Committee that meets one a year in February. "It includes the agency directors, administrative support staff from each office, and I chair it," Leahy explains. "We intentionally did not put Dr. Constant on the committee. She has unbiased oversight. She gets our recommendations, and she reports to the board of directors.

"We establish objectives," Leahy continues, "and we ask, are we meeting these objectives,’ in the compliance program. We want our agency directors to verify that we are, or say, No, you need to be more emphatic on these issues.’"

Constant believes the committee serves as a mirror of the agency’s ethics, or to use today’s buzzword, "corporate culture." "The oversight committee is the main thing. We say we are good guys. OK, do we really practice what we preach? We say we do this, but do we really?"

The first step in developing the plan begins with the appointment of the compliance officer. In the case of Ruth Constant and Associates, that meant the job fell to Leahy, who was already serving as director of program integrity. Constant notes that it is unnecessary to create a new position and hire someone as a compliance officer. "You only have to appoint someone who has direct access to senior leadership," she explains. The compliance officer, however, should be in a high-level management position.

The officer may establish a committee, as was done in this case, composed of other managers who can help oversee compliance issues.

Step 2: Internal audit

Once the board of directors had issued its formal commitment to compliance, Leahy and the committee then conducted the second step, an internal audit of operations. That meant a review of existing procedures and policies for identifying potential liabilities, focusing on all the rules for Medicare and Medicaid programs, including the conditions of participation, reimbursement and cost-reporting rules, as well as anti-kickback and self-referral restrictions.

Such a review ideally will mirror your agency’s quality assurance program but will also include reimbursement rules and operational policies.

"Sit down and look at your operations manual," advises Constant. "What’s in there that shows we comply to the conditions of participation? What are the policies that show we comply to JCAHO [Joint Commission for Accreditation of Homecare Organizations]. What are the procedures to comply with labor laws, minimum wage, overtime, exempt and non-exempt employees? What about OSHA [Occupational Safety and Health Administration] — Are you complying with their laws? Are your infection control standards current? What do you do about latex gloves and the red box used for syringes. That’s what a compliance program is all about. It’s not fancy words in some document. Do you comply with what you say you do in your everyday operations?"

Such a review will likely go a long way to helping your agency set up the compliance plan, Constant says. "You will be overwhelmed at the information you have. You have an outline of compliance issues."

The third and fourth steps focus on employees. An agency must avoid assigning discretionary duties, such as accounting or purchasing, to employees who have a propensity to commit illegal acts. Background checks can help detect employees with histories of questionable behavior, but what about more subtle dangers like conflicts of interest?

Agencies should be aware of family ties between an employee and outsiders who may benefit for the employee’s position at the agency. For instance, your compliance officer should be aware of any staff member who is related to a physician or perhaps a hospital discharge planner to avoid situations that constitute illegal kickbacks for referrals. An agency can be found guilty at the corporate level for acts of its "agents" or employees. (See Disclaimer of Outside Interests form, p. 25.)

Communicating the rules to employees is the fourth step. This involves holding inservices on the plan, of course, but also may include checking your employees basic understanding of agency compliance rules. "You also have to monitor what the employees’ knowledge base of the compliance plan is," says Leahy. "After the inservices, we have a critique sheet we give them to fill out. We also do yearly surveys asking questions about our compliance plan. This gives us feedback on what they actually do understand."

Encourage reporting of fraud

Leahy also distributed booklets to each employee that highlight the essentials of compliance, including separate codes of ethics for the agency and employees; oversight and organizational rules; standards and procedures; safety and health; training; internal investigations; and the agency’s code of ethics. "It also lists the phone number of the compliance officer," says Constant, "and the employees have to carry it with them."

The final three steps concern procedure and are closely related: organizing of the process for detecting criminal conduct; using a disciplinary process to establish a culture of compliance; and establishing responses to offenses.

As a means of detecting criminal conduct, some agencies have an 800 phone number installed as a means to encourage anonymous reports of suspected fraud and abuse. Other agencies provide suggestion boxes for this purpose, but the key is to ensure anonymity for the employee making the report. "We spent several hours of inservices going over the requirement that if an employee suspects someone of doing something illegal, they’re required to report it or face disciplinary actions," Constant says. "We want them to know they are not a squealer for turning someone in. We tell them, you’d better do it if you value your job.’ We want to get rid of people doing something dishonest."

But the confidentiality is a double-edged sword. Constant warns her employees, "If you turn in somebody, it had better be true."

And to prevent disgruntled employees from causing trouble for the agency, Constant drills into staff that "we do not tolerate fraud. Our employees are informed of our code of ethics, and they know how to report fraud. If an employee ignores that and later turns you in," she says, "you have a good case to say they were informed of our procedures."

By establishing responses to offenses, it prevents employees from using discretion or "making a judgment call" in response to an offense. These are all laid out in the plan and the employee code of ethics. However, an employee at Ruth Constant and Associates should have no doubt about responses to an offense.

A home care provider for more than 30 years, Constant requires that employees memorize two company policies which they may be asked to recite at any time. "Our employees must know two things above all else," she says. "One, we are committed to providing the best home care possible; and two, what’s the quickest way to get yourself fired? Falsifying documents." n