Moving the HME Industry Forward

General Healthcare

Corporate Compliance Manual – Recommended Contents – Part 2 of 4

August 18, 2014

AMARILLO, TX – Federal law requires DME suppliers enrolled in Medicare to establish and implement a compliance program. Because the Department of Health and Human Services has not yet published regulations on such compliance programs, a Corporate Compliance Manual should be designed to follow guidance from the Office of Inspector General (OIG) and the Federal Sentencing Guidelines.

The Federal Sentencing Guidelines, published by the United States Sentencing Commission, while designed to help judges determine the degree of fault in sentencing decisions, set forth the elements that a compliance program should meet. Similarly, the OIG has published guidance for compliance programs implemented by DME suppliers.

This four part series discusses many of the important contents that should be included in Corporate Compliance Manuals. Part 1 discussed “Code of Conduct.” Part 2 discusses “Enforcement and Discipline” and “Compliance Program Operations.” Parts 3 and 4 will discuss the multiple “Policies” that should be included in the manual.

The “Enforcement and Discipline” section of the Corporate Compliance Manual should include the following provisions:

• Persons Subject to Action
Disciplinary action, including suspension and termination, may be taken against any person who: authorizes or participates, directly or indirectly, in any action that constitutes a violation of applicable laws, regulations, or company policies; fails to promptly report any violation of company policy or applicable laws and any situations where conduct may constitute such a violation (collectively, a “Compliance Incident”), or withholds information concerning a Compliance Incident of which the employee or agent becomes aware; supervises a person involved in a Compliance Incident to the extent that the circumstances reflect inadequate supervision or lack of appropriate diligence by the supervisor; attempts to retaliate or participates in retaliation, directly or indirectly, against a person who in good faith reports a Compliance Incident or a person who encourages others to report a Compliance Incident; makes a report of a Compliance Incident which he or she knows (or should know) is false or misleading; or fails to cooperate fully with company efforts to investigate or otherwise address a Compliance Incident.

• Consideration
Imposition of disciplinary action is at the sole discretion of the company and will be made based on consideration of all of the relevant facts and circumstances of a particular situation, including whether a person involved in a Compliance Incident promptly reported the matter, the degree of the person’s cooperation and the nature of the person’s conduct. However, employees and agents are required to promptly report Compliance Incidents and to cooperate with the company in addressing such matters, and the fact that a person fulfills these obligations will not insulate the person from disciplinary action.

• Criminal Activity
If criminal activity or possible criminal activity is undertaken by any employee or agent, the Compliance Officer will undertake the following steps: (i) immediately stop the conduct forming the basis of the problem until such time as the offending practices are corrected; (ii) initiate appropriate disciplinary action against the person or persons whose conduct appears to have been intentional, willfully indifferent or with reckless disregard for legal requirements; appropriate disciplinary action includes, at a minimum, the removal of the person from any position with the oversight for or impact upon the claims submission or billing process and may include suspension, demotion, and termination; (iii) in consultation with legal counsel, the company will make appropriate notifications to the proper government officials; and (iv) promptly undertake a program of education at the appropriate department level, division level or facility to prevent similar problems.

The “Compliance Program Operations” section of the Corporate Compliance Manual should include the following provisions:

• Corporate Compliance Officer: The Compliance Officer is a member of the Corporate Compliance Department. He/she reports to both the CEO and to the Chairman of the Board of Directors.

• Corporate Compliance Department: The Corporate Compliance Department consists of the Compliance Officer, Director of Corporate Compliance and the Chief Operating Officer. The duties of the Corporate Compliance Department include: updating this manual; developing and modifying policies and procedures; ensuring that the company personnel receive appropriate training regarding the compliance plan and other policies and procedures; monitoring the regulatory environment within which the company operates; evaluating practices, policies and procedures of current risk areas and identification of new risk areas and appropriate new policies and procedures; recommending and monitoring internal systems of controls; monitoring internal and external investigations and overseeing corrective and preventive actions; evaluating appropriate activities that are designed to promote awareness of the corporate compliance program with particular emphasis on detecting and reporting potential problems and violations; receiving evaluation and responding to complaints and problems with the Corporate Compliance Program; and other duties as delegated by the Compliance Officer.

• Officer Reports: The Compliance Officer will report to the Board of Directors as appropriate, but not less than quarterly, on the activity and effectiveness of the Corporate Compliance Program. The Compliance Officer will also submit a written annual report on the status of compliance within the company that addresses any recommendations resulting from the prior year’s audit work and any other information requested by the Board of Directors.

Jeffrey S. Baird, JD, is chairman of the Health Care Group at Brown & Fortunato PC, a law firm based in Amarillo, Tex. He represents pharmacies, HME companies, and other health care providers throughout the United States. Baird is Board Certified in Health Law by the Texas Board of Legal Specialization. He can be reached at (806) 345-6320 or