OIG guidance for healthcare governing boards focuses on responsibility

Healthcare complianceYou have probably heard the saying “The buck stops here.” Popularized by President Harry S. Truman, the phrase still holds true today for many in positions of authority.

When it comes to compliance oversight in the healthcare industry, the federal government is turning its focus more than ever on boards of directors and trustees to ensure that management complies with federal and state laws. And, if they don’t, these boards and trustees are being told they will be held accountable for management’s actions.

Last month, the Office of the Inspector General of the U.S. Department of Health and Human Resources (OIG) published guidance directed at healthcare organizations’ boards of directors and trustees regarding compliance oversight. It was developed in collaboration with the American Health Lawyers Association, the Association of Healthcare Internal Auditors, and the Health Care Compliance Association.

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In years past, healthcare boards have been urged to become fully engaged in their organization’s oversight responsibility, to ask management questions about the suitability and effectiveness of the organization’s compliance program, and to ensure that all levels of management were responsible for compliance.

The latest guidance adds a new layer by providing practical suggestions for governing boards regarding oversight and review of compliance program functions. This is particularly important because board members – generally volunteers – often have varying degrees of knowledge and experience in the healthcare field.

Boards are being urged to develop a formal plan “to stay abreast of the ever-changing regulatory landscape and operating environment,” the new guidance notes.

Specifically, the new guidance addresses issues relating to a board’s oversight and review of compliance program functions, including: roles of, and relationships between, the organization’s audit, compliance, and legal departments; a mechanism and process for issue-reporting within an organization; an approach to identifying regulatory risk; and methods of encouraging enterprise-wide accountability for achievement of compliance goals and objectives.

The new guidance recommends that healthcare organizations be aware of, and evaluate, the adequacy, independence, and performance of different functions within an organization on a periodic basis.

Functions include:

Compliance: Promotes the prevention, detection, and resolution of actions that do not conform to legal, policy, or business standards.

Legal: Advises the organization on the legal and regulatory risks of its business strategies, providing advice and counsel to management and the board about relevant laws and regulations that govern, relate to, or impact the organization.

Internal audit: Provides an objective evaluation of the existing risk and internal control systems and framework within an organization.

Human resources: Manages the recruiting, screening, and hiring of employees; coordinates employee benefits; and provides employee training and development opportunities.

Quality improvement: Improves efficiency and health outcomes by measuring and reporting on quality outcomes and recommends necessary changes to clinical processes to management and the board.

The guidance suggests that a board can raise its level of substantive expertise with respect to regulatory and compliance matters by adding to the board, or periodically consulting with, an experienced regulatory, compliance, or legal professional.

The Health Law Offices of Anthony C. Vitale is experienced in regulatory and compliance matters and can assist clients and their board members with identifying areas of risk and provide insight into best practices.

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It is not intended as professional advice and should not be construed as such.