Featured Health Business Daily Story, March 28, 2014

Many Top Managers Must Take Compliance Oath in Halifax Integrity Agreement

REPORT ON MEDICARE COMPLIANCE is the nation's leading source of news and strategic information on Medicare compliance, Stark and other big-dollar issues of concern to health care compliance officers.

By Nina Youngstrom, Managing Editor
March 24, 2014Volume 23Issue 11

The HHS Office of Inspector General is trying to drive compliance deep into the culture of Halifax Hospital Medical Center by requiring all of its top managers — including the chief medical officer, chief revenue officer and service line administrator — to certify in writing that their departments comply with federal health care regulations.

The annual certifications are one of the requirements in the five-year corporate integrity agreement (CIA) that’s part of Halifax Hospital’s $85 million False Claims Act settlement with the Department of Justice for alleged Stark violations (RMC 3/10/14, p. 1), which was formalized on March 12.

“If you have to certify something, you take it very seriously,” says Brian Kozik, chief compliance officer at Lawrence General Hospital in Lawrence, Mass. “This will hold them accountable.” The CIA should empower compliance officers everywhere because it shows the weight the federal government is giving compliance programs — specifically the importance of face time with the board and reporting, he says.

Kozik says the Halifax CIA is one of the toughest he has seen. Like other CIAs, it requires the hospital to hire and retain a compliance officer who is not subordinate to the CEO or general counsel and reports directly to the board. “Noncompliance responsibilities of the compliance officer should be limited,” the CIA notes. In another familiar move, board members are required to routinely review the compliance program and sign a resolution every time attesting that Halifax has implemented an effective compliance program that adheres to all federal health program requirements. If they can’t make that promise, board members must sign a statement that they can’t guarantee compliance and lay out their corrective action plan.

But Halifax’s CIA goes a step farther. Under the section on “management accountability and certifications,” the CIA says vice presidents and other senior leaders must monitor activities in their departments and annually certify their compliance with federal health program requirements. “Certifying employees” include the CEO, chief quality officer, CFO, CMO, CNO, chief revenue officer, chief surgical services officer, VP of operations and service line administrator. The chief compliance officer is not mentioned, which Kozik says should help preserve his or her independence.

The executives’ certification states: “I have been trained on and understand the compliance requirements and responsibilities as they relate to [department or functional area], an area under my supervision. My job responsibilities include ensuring that the [department or functional area] remains compliant with all applicable Federal health care program requirements, obligations of the Corporate Integrity Agreement, and Halifax Policies and Procedures, and I have taken steps to promote such compliance. To the best of my knowledge, except as otherwise described herein, the [department or functional area] of Halifax is in compliance with all applicable Federal health care program requirements and the obligations of the CIA. I understand that this certification is being provided to and relied upon by the United States.” If they can’t certify, employees have to explain why and how they are fixing problems.

The CIA “is a big message to the industry and to boards,” he says. “All those people who sign certifications will be more accountable. It’s spread across the organization.” Kozik, who meets with his board’s audit, compliance and risk committee for two hours five times a year, also expects boards to pay more attention to compliance as CIAs and false claims cases pile up.

Signing a certification and then sweeping a violation under the rug is dangerous. “This type of action paves the way for individual sanctions in the future if Halifax breaches a material part of the agreement and the certifications are false,” says Atlanta attorney Marlan Wilbanks, who represents the whistleblower in the case.

Halifax Hospital of Daytona Beach, Fla., and subsidiary Halifax Staffing are still slated for a July 8 trial on allegations of medically unnecessary admissions. The Stark and medical necessity allegations were leveled by a whistleblower, Elin Baklid-Kunz, who worked in the hospital’s compliance department before becoming director of physician services at Halifax Staffing, but DOJ intervened only in the Stark case (RMC 10/21/13, p. 1).

For practical help in reducing potentially enormous liabilities under complex, ever-changing physician self-referral regs, check out the comprehensive Guide to Complying With Stark Physician Self-Referral Rules at the AIS Marketplace.

© 2014 by Atlantic Information Services, Inc. All Rights Reserved.

It's quick and easy to sign up for FREE access to AISHealth.com!

Why do I need to register?