Effective Compliance Plans: Have they ever been more important to your organizations?

Last month, the Department of Justice (DOJ) announced that it had entered into a $25.5 million settlement with Intermountain Health Care, Inc. (Intermountain), Utah’s largest health system with 22 hospitals and more than 4,500 physicians, to resolve self-reported violations of the Stark Law and the False Claims Act. The claims at issue primarily involved compensation arrangements using impermissible payment formulas with employed physicians, alleged fair market value shortcomings in physician lease arrangements, and other physician compensation or services agreements that were oral or insufficiently memorialized in writing per regulatory requirements.

Interestingly, as reported in an article in the Salt Lake Tribune on April 3, 2013, Intermountain’s leadership initiated a year-long internal review of employment agreements and lease agreements within its system after, according to Intermountain’s chief medical officer, a group “went to a three-day conference on [2007 updates to the Stark law] and came home from that and said, ‘We need to look at our processes,’” and, thereafter, “started picking up rocks and finding things underneath.” While the vast majority of the claims included in the DOJ settlement appear to be what some may consider legal “technicalities” rather than part of a grand plan to game the health care system, Intermountain’s voluntary settlement highlights how even perceived “technicalities” continuing over a period of years can have a tremendous, negative financial impact on any health care provider, even one who tried to do the right thing once it became aware of such deficiencies.

A voluntary compliance plan should be tailored to your organization and, at a minimum, should include the following key components: designation of an active compliance officer or committee; robust and clear compliance standards and procedures; regular internal review, monitoring and auditing; compliance training, education and communication across the organization; protocols for receiving and responding to detected shortfalls and prompt correction action; consistent and regular enforcement; and procedures to review and update the organization’s compliance plan on a timely basis when necessary.


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