Medicare Compliance & Reimbursement

As the Enron fiasco continues to play out and the HealthSouth debacle puts the corporate fraud spotlight directly on the health care industry, health care boards of directors have more to worry about than ever when it comes to compliance concerns. And new guidance from the HHS Office of Inspector General suggests it's all about asking - and responding to - the right questions.

The guidance - a joint effort by the OIG and the American Health Lawyers Association - is designed to "help health care organization directors ask knowledgeable and appropriate questions related to health care corporate compliance." Titled "Corporate Responsibility and Corporate Compliance: A Resource Guide for Boards of Directors," the guidance warns that heightened health care fraud enforcement, combined with increased attention on corporate wrongdoing nationwide, have put health care directors in a pinch.

And the document points out that the stakes can be huge: "Personal liability for directors, including removal, civil damages, and tax liability, as well as damage to reputation, appears not so far from reality as once widely believed."

According to the OIG and AHLA, that means directors must take their oversight responsibilities with respect to compliance more seriously than ever. The guidance lists 18 questions directors should be asking to ensure that their organization is doing the right thing - and that they themselves won't be put in jeopardy. The questions include "What is the process by which the organization evaluates and responds to suspected compliance violations?" and "How are reporting systems ... monitored to verify appropriate resolution of reported matters?"

"Corporate board members are reminded that, besides their fiduciary responsibilities, they have an obligation to understand the corporate compliance challenges of their organizations," OIG chief Janet Rehnquist warns. "They are obligated to obtain from management the information necessary to satisfy their duty of care as directors."

To see the guidance, go to http://oig.hhs.gov/fraud/docs/complianceguidance/040203CorpRespRsceGuide.pdf.

Lesson Learned: The wave of recent corporate scandals has made an active, director-level engagement with health care compliance more important than ever.