On March 26, 2012, the U.S. Department of Health & Human Services Office of Inspector General (the “OIG”) published a report summarizing a February 23, 2012roundtable meeting between the OIG and compliance professionals from twenty-three pharmaceutical manufacturers.  The compliance officers and other professionals attending the meeting all represented companies currently operating under Corporate Integrity Agreements (or “CIAs”).  CIAs are generally negotiated between a company and the government in connection with settling various types of federal healthcare program fraud allegations.   Although the roundtable meeting was focused on pharmaceutical manufacturers’ experiences, many of the lessons learned from operating under CIAs are not unique to the pharmaceutical industry and could apply to all companies operating compliance programs.

As many in the health care industry are already aware, implementing an effective compliance program is one way to possibly reduce the risk of fraud and abuse activities occurring within an organization, as well as a way to identify and remedy questionable activities.  Among other things, an effective compliance program may also provide a communication system to permit and encourage potential “whistleblowers” to vent their frustrations through internal means, thus enabling a company to more promptly address suspected inappropriate activities.  As previous enforcement in the pharmaceutical industry has indicated, many whistleblowers that ultimately bring actions under the federal civil False Claims Act begin as disgruntled employees that did not believe their concerns were taken seriously by their organizations.  An effective compliance program may also be advantageous in reducing possible penalties in connection with enforcement activities.

The OIG’s March 26 report highlights discussions regarding the following topics:

  1. Challenges in Implementing CIAs,
  2. Compliance Program Structure and Oversight,
  3. Risk Identification and Monitoring Activities,
  4. Policies, Procedures and Training Activities, and
  5. Compliance Post-CIA.

Among other things, the OIG report details several suggestions by the pharmaceutical manufacturer compliance professionals relating to effective compliance practices, including the following:

  • While companies often implement computer-based modules to train their employees and to document such training, “in person” training is generally more effective.
  • In general, involving and updating the board of directors regarding compliance activities (something mandated by many CIAs) has been a positive experience. 
  • Boards of directors and company management should communicate a compliance message, including communicating that compliance may be “a competitive business advantage”.  Additionally, it was suggested that “compliance messages be delivered by senior, district, and regional managers; during in-person meetings with sales representatives; during various auditing and training interactions; at business unit meetings; and through bulletins from the human resources department.”
  • Having the compliance officer be a member of senior management and not subordinate to the general counsel or the chief financial officer has been a beneficial structure.
  • Integration of compliance into a company’s broader business operations “greatly enhances the effectiveness of compliance programs”.  The report highlights several examples of such compliance/business integration, and further suggests that, “to the extent possible, business units ‘own’ compliance.”  However, the report also notes that turnover in personnel may create challenges to compliance and business integration.   
  • Ensuring that “compliance personnel have ‘a seat at the table’ when sales and marketing activities are planned or discussed, … can help ensure that risks are preemptively identified and addressed.”
  • Field “ride-along” activities may not be highly beneficial in identifying specific compliance violations, but are beneficial in establishing open lines of communication between compliance and field personnel.
  • Compliance personnel should collaborate with business unit personnel and other affected stakeholders in the policy development and revision process.
  • Future areas of compliance challenges include state and federal “sunshine” reporting issues, social media and technology, and changing business models in the pharmaceutical industry.

Even if a healthcare employer already has a compliance program in place, updating and periodically revising that program will help to maintain its relevance and effectiveness.   The OIG has previously encouraged pharmaceutical manufacturers to pursue such periodic revisions of their compliance programs.  Accordingly, appropriate benchmarking of other companies’ compliance practices may be helpful as employers review their own programs (whether or not they are under a CIA).   The March 26 OIG report may be one source of benchmarking “industry standard” compliance program activities as pharmaceutical manufacturers and others structure their own compliance program.


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