• Health Care: Timing For Compliance Fine-Tuning Is Ripe
  • November 1, 2004 | Author: William Reece Hirsch
  • Law Firm: SNR Denton - San Francisco Office
  • Health care organizations face unique challenges in maintaining effective, state-of-the-art compliance programs. Recent developments suggest that the timing is perfect to review approaches to corporate compliance.

    Guidance issued on July 1 by the American Health Lawyers Association (AHLA) and the Department of Health and Human Services Office of Inspector General (OIG) seeks to reconcile conflicting views on the roles of the general counsel and corporate compliance officer. The OIG considers it a best practice for the corporate compliance officer to be separate from the general counsel's office. In contrast, the American Bar Association task force on corporate responsibility stated that general counsel "should have primary responsibility for assuring the implementation of an effective legal compliance system under the oversight of the board of directors."

    The AHLA/OIG guidance document provides a framework for boards to resolve this tension, stressing that, regardless of the roles of the general counsel and compliance officer, boards must receive "appropriate and timely information on organizational compliance with applicable laws."

    Recent changes to the Federal Sentencing Guidelines, scheduled to take effect on November 1, also emphasize that an organization's board must be knowledgeable about the content and operations of the compliance program and exercise reasonable oversight. Finally, Sarbanes-Oxley has brought renewed focus on corporate governance concerns, even among nonprofit health care organizations that are not subject to most of its provisions.

    Health care organizations often make the mistake of adopting a reactive approach. Recent developments make clear that implementing effective corporate governance and compliance processes may be more important to long-term success than any single legal compliance initiative.