Home Health & Hospice Week

If your home care organization fails to implement and maintain a compliance plan, it's your Board of Directors who may end up paying the price in this post-Enron era. The HHS Office of Inspector General and the American Health Lawyers Association stress the potential for personal liability for directors who fail to follow a reasonable compliance oversight process for health care providers in a document the two entities collaborated on, "Corporate Responsibility and Corporate Compliance: A Resource for Health Care Boards of Directors."

The document references a court decision, In re Caremark International Inc. Derivative Litigation, which "clearly stated that Boards of Directors of health care organizations have responsibilities for fraud and abuse compliance and, if they fail to fulfill their duties in this regard, may have liability," notes Burtonsville, MD-based health care attorney Elizabeth Hogue. "But we never knew what these responsibilities were exactly and how they should be carried out by Boards."

Now the OIG and AHLA have spelled out Boards' responsibilities under one of the principal fiduciary duties owed by directors to their corporations - duty of care. The nine-page guidance also addresses health care organization directors' "unique challenges," namely overseeing corporate compliance programs, and the development of those compliance programs. Finally, it gives Boards 18 structural and operational questions about compliance they should be able to answer, ranging from how the organization's compliance reporting system works to what measures govern the reporting to government authorities of probable law violations.

"It is a very good document to help educate members of the Boards of Directors of health care providers concerning their obligations as directors," praises attorney John Gilliland II with Indianapolis-based Gilliland & Caudill. "It is a very helpful overview for a director."

The structural and operational questions "give Boards a clear road map about how to fulfill their responsibilities," Hogue concurs. In fact, home care providers would be wise to use this document even if they don't have an official Board of Directors, Gilliland suggests. Any management body would benefit from reviewing the compliance responsibilities, he judges. Boards should address the 18 questions annually, Hogue recommends. To stave off possible liability, they also should carefully document their oversight in each of the question areas. Additionally, home care providers should make certain they have directors' and officers' insurance in place that covers liability for noncompliance in this area, Hogue counsels. Editor's Note: The guidance is at www.oig.hhs.gov/fraud/docs/complianceguidance/040203CorpRespRsceGuide.pdf.