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INSTITUTIONAL COMPLIANCE PROGRAMS
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  1. INSTITUTIONAL COMPLIANCE PROGRAMS One University’s Approach to a Comprehensive Compliance Program Southern Association of College and University Business Officers (SACUBO) 2001 Annual Meeting April 8-10, 2001 UTMB Compliance Program

  2. THE BIG CITY EXAMINER April 9, 2001 Monday THE UNIVERSITY OF “IT COULD BE YOURS” ACCUSED OF DEFRAUDING THE FEDERAL GOVERNMENT OF MILLIONS OF DOLLARS INVESTIGATION UNSEALED - OFFICE OF INSPECTOR GENERAL AND THE DEPARTMENT OF JUSTICE PROMISE A FULL INVESTIGATION UTMB Compliance Program

  3. INSTITUTIONAL COMPLIANCE PROGRAMS • WHAT IS AN INSTITUTIONAL COMPLIANCE PROGRAM? • WHY DEVELOP AN INSTITUTIONAL COMPLIANCE PROGRAM? • WHAT ARE THE ESSENTIAL ELEMENTS OF AN EFFECTIVE COMPLIANCE PROGRAM? • WHO SHOULD BE THE COMPLIANCE OFFICER? • HOW MUCH WILL IT COST • UTMB’S APPROACH TO AN INSTITUTIONAL COMPLIANCE PROGRAM • QUESTIONS & ANSWERS UTMB Compliance Program

  4. WHAT IS A COMPLIANCE PROGRAM? • A Formal Voluntary Program or Process to Reaffirm Your Institution’s Commitment to Uphold the Internal and External Laws Which Govern It and to Assure Compliance With Those Governing Laws. • An Ongoing Voluntary Process Designed to Prevent and Detect Violations of the Law, Particularly Fraud and Abuse Laws. UTMB Compliance Program

  5. WHAT IS A COMPLIANCE PROGRAM? UTMB Compliance Program

  6. WHAT IS A COMPLIANCE PROGRAM? • Former Attorney General Janet Reno Has Characterized Any Compliance Program That Sits on the Shelf and Is Not Put Into Action As “Reckless Intent.” • Under the Federal False Claims Act You Could Be Found to Have Acted in Reckless Disregard of Truth or Falsity of Information (Requires No Proof of Specific Intent to Defraud) UTMB Compliance Program

  7. UTMB Compliance Program

  8. WHY DEVELOP AN INSTITUTIONAL COMPLIANCE PROGRAM? • Our Confrontational/Regulatory Environment • Benefits of a Compliance Program UTMB Compliance Program

  9. WHY DEVELOP AN INSTITUTIONAL COMPLIANCE PROGRAM? Our Environment • Subject to Complex Statutory and Regulatory Requirements (OMB A-21, A-110, IRS Code, EEOC, Affirmative Action, EPA, Medicare, Etc). • Subject to Increased Government Scrutiny in Health Care and Higher Education • Large $ Settlements in Recent Investigations and Audits • Criminal Indictments Against Individuals and Corporations UTMB Compliance Program

  10. WHY DEVELOP AN INSTITUTIONAL COMPLIANCE PROGRAM? Our Environment • Government Officials Are Changing Their Interpretation of Rules That Were Considered Vague • Government Is Responding to Perceived Abuses With Regulatory Changes • Whistleblower Suits - “Qui Tams” Under the False Claims Act Are Increasing Significantly • Federal Government’s Resources for Investigations and Audits Has Increased Significantly. • Academic Medical Centers and General Academic Institutions Are Becoming Targets of the Federal Government UTMB Compliance Program

  11. GOVERNMENT RESOURCES • Significant Growth in Enforcement Manpower • 51% Growth in Manpower from FY96 to FY97 (HIPPA) • Combined Focus of Efforts • Significant Growth in Total U.S. Attorney & Agents, FBI Agents, and OIG Auditors • Unprecedented Resources • Tens of Millions of Dollars Appropriated to Execute Fraud and Abuse Programs Since 1997 • Enforcement Funding to Reach $114 Million in FY 2003 10 UTMB Compliance Program

  12. GOVERNMENT RESOURCES DHHS OIG RESULTS 4 YEARS UNDER HIPAA (FY 1997- FY 2000) • OVERALL SAVINGS OF MORE THAN $47.3 BILLION • EXLUDED MORE THAN 12,066 ABUSIVE OR FRAUDULENT INDIVIDUALS AND ENTITIES • 1,290 CRIMINAL PROSECUTIONS • 3,080 CIVIL ACTIONS 10 UTMB Compliance Program

  13. Commercial Settlements(Dollars in Millions) UTMB Compliance Program

  14. PATH Settlements( Dollars in Millions) 13 UTMB Compliance Program

  15. Grant-related Settlements (Dollars in Millions) UTMB Compliance Program

  16. FEDERAL CIVIL FALSE CLAIMS ACT • Prohibits persons from “knowingly present[ing] or caus[ing] to be presented…..a false or fraudulent claim for payment or approval…..” • Civil Penalties • Qui Tam / Whistleblower Actions • Criminal Penalties UTMB Compliance Program

  17. CIVIL MONEY PENALITIES • Civil penalty of not less than $5,000 and not more than $10,000 for EACH claim + • 3 times the amount of damages which the government sustains UTMB Compliance Program

  18. QUI TAM ACTIONS • Results Are Basically the Same As the False Claims Act Penalties • Less or No Information During the Investigation • Under Seal • 60 Day Government Review • Limited Unsealing Order • Qui Tam Relator Can Receive up to 30% of the Settlement /Judgment UTMB Compliance Program

  19. CRIMINAL PENALITIES • False claims, false statements, etc. can result in: . . . shall be guilty of a felony and upon conviction, shall be fined not more than $25,000 per violation or imprisoned for not more than five years per violation, or both. UTMB Compliance Program

  20. WHY DEVELOP AN INSTITUTIONAL COMPLIANCE PROGRAM? Our Environment DOJ/OIG IDENTIFIED RESEARCH AS A TARGET • Many Institutions Nationally Have Been or Are Being Investigated. • A Number of Institutions Have Been Designated “Exceptional” • OHRP Has Reviewed Over 15 Universities for Violations of 45 CFR Part 46, Protection of Human Subjects • Research Has Been Added to DOJ “Hit List” As One of the Top Areas of Concern. • OIG's Workplan Includes Research Audit Initiatives UTMB Compliance Program

  21. WHY DEVELOP AN INSTITUTIONAL COMPLIANCE PROGRAM? Benefits • Helps to Create a Positive Law Abiding Culture That Discourages Wrongdoing. • Improves Institutional Integrity Internally and Externally. • Helps Management Fulfill Its Duty to Protect Corporate Assets. • Reduces the Likelihood of a Violation of Governing Laws. • Decreases the Likelihood of Whistle-blowers and Qui Tam Lawsuits. UTMB Compliance Program

  22. WHY DEVELOP AN INSTITUTIONAL COMPLIANCE PROGRAM? Benefits • Creates a response system if there is an investigation. • Acts as a mitigating factor regarding sentencing or punishment • Protects Institutional entity from liability • Limits exposure liability of trustees, executive management UTMB Compliance Program

  23. WHY DEVELOP AN INSTITUTIONAL COMPLIANCE PROGRAM? ...BECAUSE THE GOVERNMENT SAYS SO!! • Government Is Seeking to Change Institutional Conduct and Force Our Industry to a Model of Self Compliance • As Academic Institutions We Don’t Ourselves As Corporations, but We Will Be Held to the Standard of a Corporation by the Government. UTMB Compliance Program

  24. WHAT ARE THE ESSENTIAL ELEMENTS OF A COMPLIANCE PROGRAM? • An Institutional Commitment • Federal Sentencing Guidelines • Model Compliance Plans • Hospital • Physician/Faculty Practice Plans • Home Health Agency • Clinical Laboratories UTMB Compliance Program

  25. An Institutional Commitment • Need To Demonstrate Your Institution’s Commitment To “Do The Right Thing” • Proactive Strategy - Commitment At The Top To The Highest Business, Educational, & Ethical Standards. UTMB Compliance Program

  26. UNITED STATE FEDERAL SENTENCING GUIDELINES • The Institution May and Can Be Held Criminally Liable for the Acts of Employees As Long As the Employees Are Acting Within the Scope of Their Employment and to the Benefit of the Institution • The Criminal Standard Sets Forth Specific Penalties UTMB Compliance Program

  27. FEDERAL SENTENCING GUIDELINESDefinition of an Effective Compliance Program • Chapter 8 Sentencing of Organizations3 (K) 1-7. • An Effective Program to Prevent and Detect Violations of Law Means a Program That Has Been Reasonably Designed, Implemented, and Enforced So That It Generally Will Be Effective in Preventing and Detecting Criminal Conduct. UTMB Compliance Program

  28. Definition of an Effective Program (continued) • Failure to Prevent or Detect the Instant Offense, by Itself, Does Not Mean That the Program Was Not Effective. • The Hallmark of an Effective Program to Prevent and Detect Violations of Law Is That the Organization Exercised Due Diligence in Seeking to Prevent and Detect Criminal Conduct by Its Employees and Other Agents UTMB Compliance Program

  29. Written Standards and Procedures Reasonably Capable of Reducing Criminal Conduct Code of Conduct Policies & Procedures Guideline No. 1 UTMB Compliance Program

  30. Overall Responsibility for Compliance Must be Someone of a High Level of Responsibility in the Organization Guideline No. 2 UTMB Compliance Program

  31. Due Care Not To Delegate Substantial Discretionary Authority to Individuals Who Have Propensity to Commit Crime Appropriate Delegation of Authority Background checks Credentials Verification Security Clearance Guideline No. 3 UTMB Compliance Program

  32. Effective Communication of Standards and Procedures to All Employees and Agents Mandatory Training Programs Clear Publications Guideline No. 4 UTMB Compliance Program

  33. Monitoring and Auditing Systems Designed to Detect Criminal Conduct A Method of Reporting Criminal Conduct Without Fear of Retribution Hotline Guideline No. 5 UTMB Compliance Program

  34. Consistent Enforcement Policies that Provide Specific, Appropriate, and Progressive Disciplinary Action for All Employees Records of Discipline BE SURE THAT YOUR ARE CONSISTENT IN ENFORCEMENT Guideline No. 6 UTMB Compliance Program

  35. Modify Program Once an Offense Has Occurred or Been Detected Take Swift and Reasonable Steps to Prevent Further Similar Offenses Guideline No. 7 UTMB Compliance Program

  36. ATTRIBUTES OF A COMPLIANCE PROGRAM • COMPLIANCE INFRASTRUCTURE • BE REALISTIC, BUT AIM HIGH • CULTURE THAT EMBRACES SELF-ASSESSMENT AND ENCOURAGES REPORTING OF PROTENTIAL WRONGDOING • INFORMATION PROVIDED AT A LEVEL THAT ALL EMPLOYEES CAN UNDERSTAND • ACCESS TO INFORMATION • SYSTEM TO ASK QUESTIONS AND GET ANSWERS UTMB Compliance Program

  37. Who should be the compliance officer? • Attorney? • Internal Auditor? • Former FBI/OIG Agent? • Manager with Knowledge of Institution? • Former Manager/Employee? UTMB Compliance Program

  38. Compliance Officer Skills • Excellent People Skills • Knowledge of Laws, Regulations & Business Operations • Excellent Negotiator • Requires Wisdom and Judgment • Reputation of Honesty and Integrity • Ability to See the Big Picture UTMB Compliance Program

  39. WHAT WILL IT COST? IT IS NOT CHEAP UTMB Compliance Program

  40. The University of Texas Medical Branch at Galveston One University’s Approach to a Comprehensive Compliance Program UTMB Compliance Program

  41. UTMB’s Plan for ComplianceMANDATES • U.T. SYSTEM BOARD OF REGENTS MANDATED THAT EVERY U.T. COMPONENT DEVELOP A COMPLIANCE PROGRAM UTMB Compliance Program

  42. PROMOTE COMPLIANCE WITH ALL APPLICABLE LAWS & REGULATIONS FOSTER & HELP ENSURE ETHICAL CONDUCT PROVIDE EDUCATION, TRAINING & GUIDANCE TO ALL EMPLOYEES & FACULTY PREVENT ACCIDENTAL OR INTENTIONAL NONCOMPLIANCE WITH APPLICABLE LAWS & REGULATIONS DETECT SUCH NONCOMPLIANCE, IF IT OCCURS PREVENT FUTURE NONCOMPLIANCE UTMB’s Plan for CompliancePURPOSE UTMB Compliance Program

  43. UTMB’s Plan for ComplianceOUR MESSAGE • DO WHAT’S RIGHT. • ETHICAL BEHAVIOR AND COMPLIANCE IS EVERY UTMB EMPLOYEE’S PERSONAL RESPONSIBILITY. • EVERY EMPLOYEE WILL BE HELD ACCOUNTABLE FOR HIS OR HERCONDUCT. UTMB Compliance Program

  44. UTMB’s Plan for ComplianceSTRUCTURE • Institutional Compliance Officer • Executive Directors of Compliance • Institutional Compliance Program – 9 Employees • Director of Research Compliance & Facilitation • Institutional Compliance Committee • President • Executive Vice President • Vice Presidents • Audit Director • Faculty Physicians • Other Executive Management UTMB Compliance Program

  45. UTMB’s Plan for Compliance Compliance Program Plan • Institutional Compliance Plan • Mission Statement • Standards of Conduct Guidelines • Organization and Oversight • Information, Education, and Training • Adherence to Compliance Program • Faculty Promotion • Evaluation of All Employees UTMB Compliance Program

  46. UTMB’s Plan for Compliance Compliance Program Plan • Institutional Compliance Plan Includes: • Departmental Compliance Policies and Procedures • Compliance Monitoring • Reporting Potential Violations or Questionable Conduct, i.e.Hotline • Response to Allegations, Identified Problems, and Audit Outcomes UTMB Compliance Program

  47. UTMB’s Plan for Compliance Compliance Program Plan • Institutional Compliance Plan Includes: • Disciplinary Action and Appeal • Non-Employment of Sanctioned Employees • Specific Compliance Plans • Standards of Conduct Guide • Portrait of Integrity UTMB Compliance Program

  48. UTMB’s Plan for Compliance Policies and Procedures • Compliance Policies and Procedures • Employee Background Checks • Fraud and Abuse Hotline • Non-Retaliation Policy • Gifts Policy • Investigative Protocol • Cooperating with Investigators UTMB Compliance Program

  49. UTMB’s Plan for Compliance Risk Assessment • Complete an Annual Assessment of Compliance Risks. • Identify High Risk Areas of Focus for Each Fiscal Year. • Responsibility for Each Risk Area Is Assigned to One Individual. • Plans for Each High Risk Area Are Developed and Implemented to Help Ensure Compliance. UTMB Compliance Program

  50. UTMB’s Plan for Compliance Communication • UTMB Compliance Program Articles • Town Hall Meeting • UTMB Fraud and Abuse Hotline • Hotline Posters • Mailing to all UTMB Employees about the Hotline • Compliance Check List • Portrait of Integrity (UTMB Standards of Conduct Guide) • Guide Provided to Every Employee UTMB Compliance Program