1. Health Care Compliance Association Region VII Compliance Conference August 1, 2003

2. Evaluating Your Compliance Program’s Effectiveness Lawrence A. Fogel, Partner Joseph M. Watt, Partner BKD, LLP Kansas City, MO

3. Criminal Fraud Convictions o Enforcement agencies continue to actively investigate and prosecute health care fraud cases o Criminal fraud convictions increased from 250 to 320 for the six month period ended March 31, 2003

4. What Role Do Boards Have? o Boards have fiduciary responsibilities for overseeing the corporate affairs of their organization o Boards need to have verbal & written communications with management to satisfy their oversight responsibilities o The OIG & AHLA co-authored the “Corporate Responsibility & Corporate Compliance Guidance” in April 2003

5. What Role Do Boards Have? o This guidance is designed to help boards better understand their oversight duties & responsibilities o Boards should be educated on this guidance & their fiduciary responsibilities o An effective compliance program is the centerpiece for boards to oversee the compliance activities of their organizations

6. Questions a CCO Should Be Prepared to Answer o How would you, as the CCO, answer the following question: o The Chairman of the Board asks you to evaluate your compliance program

7. Questions a CCO Should Be Prepared to Answer o How would you, as the CCO, answer the following question: o The CEO asks you if the compliance program is being followed

8. Questions a CCO Should Be Prepared to Answer o How would you, as the CCO, answer the following question: o A CCC member asks you if the compliance committee has achieved its goals

9. Questions a CCO Should Be Prepared to Answer o How would you, as the CCO, answer the following question: o A Federal Agent asks you to present documentation to show that your compliance program is effective

10. What You Will Learn Today o What areas of the compliance program should be evaluated? o How should the evaluation be conducted? o How can the evaluation be quantified? o How can the compliance program be improved?

11. Questions a CCP Should Address o What are the elements that distinguish an effective compliance program from an ineffective one? o How should the CCO & CCC identify & document the strengths & weaknesses in the compliance program?

12. Questions a CCP Should Address o What method or process has been established to evaluate the effectiveness of the compliance program? o What are the symptoms of an ailing compliance program? o What are the remedies to cure an ailing compliance program?

13. Symptoms of an Ailing Compliance Program o Compliance officer & committee o Compliance plan & code of conduct o Audits o Complaints o Policies o Education & training o Background checks

14. Questions a CCP Should Address o What method or process has been established to evaluate the effectiveness of the compliance program? o What are the symptoms of an ailing compliance program? o What are the remedies to cure an ailing compliance program?

15. Caution o Don’t make the mistake of thinking you already know what the problems are o You may not know what all the problems are or they may be bigger than you thought o Thinking about the problems does not solve them o Taking no action on addressing problems may indicate a lack of concern

16. Why Should Compliance Programs Be Reviewed Each Year? o The OIG recommends o An independent & objective review be conducted annually o Reviewer should be independent from line management o Annual reviews of the compliance plan & program are healthy & productive & show the organization is striving to improve its performance

17. What is a Compliance Program Assessment (CPA)? o The CPA is a management tool to measure the effectiveness of a compliance program o The CPA consists of 3 major phases o Phase 1-Compliance Retreat o Phase 2-Private Interviews o Phase 3-Documentation Review o A grade card is completed at the end of Phase 3

18. First Things First: The GAP Analysis o Before the three phases of the CPA are started, the compliance plan should be reviewed in detail o A GAP analysis of the plan & actual practices should be performed

19. First Things First: The GAP Analysis o GAPs can occur because of conflicting policies & differences between the plan’s requirements & actual practices o The compliance plan should be revised as necessary to eliminate all GAPs & to incorporate all significant legal & regulatory developments

20. Phase 1 Compliance Retreat o Each CCC member completes a scorecard evaluating the key elements of the CCP o The CCC members evaluate 20 elements

21. Phase 1 Compliance Retreat o These elements include, in part, the following o Were the CCC meetings productive? o Did the CCC meet as required? o Did the CCC meet its goals? o Were the plan & the code of conduct followed? o Was the compliance training effective? o Are policies & procedures clear & current? o Were audits conducted of risk areas? Were exceptions from audits properly resolved?

22. Phase 1 Compliance Retreat o Were disciplinary actions taken when necessary? o Were complaints processed according to the plan? o Were investigations of complaints conducted & resolved? o Were background checks conducted according to the plan? o Did the compliance program meet its objectives?

23. How Is the Scoring Done? o Each element is graded using a point scale of 1 to 10 o The scores are tabulated for each element & a composite score is calculated

24. How Is the Scoring Done? o Scores for each element may be compared to prior years o Composite scores may be compared to prior years

25. Other Benefits of the Retreat o A risk assessment can be performed by evaluating internal & external risks o A work plan can be developed to target exposure areas in the risk assessment o A brainstorming session can beneficial to identify opportunities to improve the compliance program

26. Phase II Private Interviews o Private interviews are usually conducted after the retreat o Interviews are scheduled in advance o CCC members & key players in the organization are interviewed

27. Phase II Private Interviews o Questions for the CCC members are different than the ones for the key players o Interviewees are asked a series of yes or no questions

28. Questions for CCC Members o Is the Board supportive of the compliance program? o Is senior management supportive of the compliance program?

29. Questions for CCC Members o Are the compliance meetings productive? o Has the organization followed its compliance program? o Was a risk assessment performed? o Were the risk areas audited? o Were compliance complaints received & resolved?

30. Questions for CCC Members o Was your compliance training satisfactory? o Were employees & other parties disciplined when necessary? o Are the policies & procedures clear & current? o Has your compliance program improved over the past 12 months?

31. Questions for Key Players o Do you know who the compliance officer is? o Does your organization have a compliance program? o Do you understand the purpose of the compliance program? o Have you read the plan & code of conduct? o Do you know how to report complaints?

32. Questions for Key Players o Is the process to report complaints effective? o Is your organization serious about compliance? o Has your compliance program improved over the past 12 months?

33. How is the Scoring Done? o Each positive response receives 1 point o Each negative response receives no points o The score is calculated by dividing the points earned by the total maximum points

34. Phase III Documentation Review & Grade Card o The final phase of the CPA is the review of key documentation & the completion of the grade card o The grade card is comprised of numeric & percentage scores for each of the seven major elements

35. The Seven Elements o General o Auditing & monitoring o Process to report complaints o Policies & procedures o Education & training o Background checks o Disciplinary actions

36. How is the Scoring Done? o The organization receives 1 point for each item on the grade card o The points that are earned are totaled & divided by the maximum points o A percentage grade is calculated for each element o A composite score is calculated as an overall grade for the compliance program

37. General o Included in this review: o Compliance committee minutes o Job descriptions o Committee composition o Compliance plan o Code of conduct o Other relevant documentation o A score is calculated on a maximum of 15 points

38. Auditing & Monitoring o Included in this review: o Was a risk assessment conducted? o Was a work plan prepared? o Was the work plan followed? o Was the OIG’s guidance along with other government agency’s guidance considered in the work plan? o Were internal & external audits conducted?

39. Auditing & Monitoring o The audits are reviewed along with the supporting documentation o A score is calculated on a maximum of 15 points

40. Process to Report Complaints o Included in this review: o Complaints received through the hotline & other reporting processes are reviewed

41. Process to Report Complaints o Documentation supporting the complaints is reviewed to determine if they were o Timely processed o Handled according to policy o Resolved in a proper manner o A maximum of 14 points can be earned

42. Policies & Procedures o Included in this review: o Are all policies & procedures in writing? o Are they current? o Do policies contain the model OIG language when appropriate?

43. Policies & Procedures o Are policies periodically reviewed? o Does a conflict of interest policy exist? o Does a gift & gratuity policy exist? o Does a record retention policy exist? o Does a business confidentiality policy exist? o Does a discount & waiver of coinsurance policy exist?

44. Policies & Procedures o Does a policy exist to provide free services? o Are the policies consistent if they appear in more than one document? o Are the policies followed? o A maximum score of 20 points can be earned

45. Education & Training o Included in this review: o Was the training documented? o Was the training coordinated & monitored? o Were new employees oriented on the compliance plan? o Was the orientation documented?

46. Education & Training o Did employees read the plan & the code, if required to do so? o Were employees given annual compliance training? o Were designated individuals given specialized training? o Was the training documented? o Was the training monitored?

47. Education & Training o Were employees given pre & post-tests? o Were employees surveyed on their educational needs? o Was the Board trained on compliance issues? o Was the medical staff trained on compliance issues? o A maximum of 15 points can be earned

48. Background Checks o Included in this review: o Focus on these issues to determine if background checks were properly conducted o Were background checks conducted in accordance with the compliance plan? o Were background checks conducted on all employees? o Was the OIG list of excluded providers & individuals checked?

49. Background Checks o Were felony background checks made? o Were background checks conducted on physicians? o Were they conducted on independent contractors & agency personnel? o Were reference checks conducted? o Was prior employment checked? o The score is based upon 10 total points

50. Disciplinary Actions o Policies & documentation relating to disciplinary actions are reviewed in this section o Sometimes it is difficult to distinguish between a compliance & non- compliance issue

51. Disciplinary Actions o Included in this review: o Does a disciplinary policy exist? o Has it been communicated to all employees? o Were employees disciplined when required by the policy? o Were compliance offenses defined? o Were employees evaluated on their compliance performance?

52. Disciplinary Actions o Were physicians subject to a disciplinary policy? o Has HR reported the disciplinary actions to the CCO? o A maximum of 10 points can be earned

53. Summary o There are many areas of a compliance program that should be evaluated o Documentation, communication & education are essential o When improvement is needed & corrective actions are taken, a clear message is sent that the organization is serious about compliance

54. Summary o Since the CPA is an annual process, an organization can compare results to measure improvement from year to year o The CPA can help an organization to objectively evaluate its compliance program to determine if it is effective

55. CPA o The CPA is an effective communication tool for the Board of Directors & management

56. Questions & Comments Thank you Lawrence A. Fogel, Partner 816 201-0218 Joseph M. Watt, Partner 816 201-0246