Articles on Compliance Strategies

Featured Health Business Daily Story Sept. 3, 2009

Use of Interim Compliance Officers Meets Need for Internal Reviews and Buys Time in a Transition

Reprinted from REPORT ON MEDICARE COMPLIANCE, the nation's leading source of news and strategic information on false claims, overpayments, compliance programs, billing errors and other Medicare compliance issues.

By Nina Youngstrom, Managing Editor, (nyoungstrom@aispub.com)

Hospitals and physician practices are increasingly hiring interim compliance officers (COs) for periods of six to 18 months. Usually they are lawyers or consultants hired to satisfy the sometimes overlapping needs of providers.

Sometimes organizations hire an interim compliance officer when their regular compliance officer has left, and they want the compliance program evaluated from inside over a long period of time to permit a very detailed assessment of the program. “Organizations will hire someone with fresh eyes to come in and manage the compliance program and evaluate where they are and recommend where to go,” says former HHS Inspector General Richard Kusserow, CEO of Strategic Management, a consulting firm in Alexandria, Va.

The board may want someone very experienced to take the reins and keep operations going to buy time while a permanent replacement is chosen and to scrutinize the program, especially if problems are suspected, says James Cottos, a former long-time HHS regional inspector general and chief inspector, who is now senior vice president of Strategic Management and a frequent interim compliance officer.

Sometimes interim compliance officers are needed to ensure an organization complies with the terms of a corporate integrity agreement or after management turnover, adds Cornelia Dorfschmid, Ph.D., an executive vice president of Strategic Management who also works as an interim compliance officer. Or the organization may be in great compliance shape — perhaps the compliance officer has mastered the challenge well and is now ready for something new — but the organization wants to confirm this through objective eyes and make sure the replacement is top-notch.

Also, smaller physician practices may band together to hire an interim compliance officer they can share until they agree on a permanent network-type compliance officer. But Kusserow warns that an interim compliance officer should never become the permanent compliance officer. “It would bias the process,” he says, and undermine the purpose of their mission.

This development is further confirmation that the compliance officer is a permanent, recognized part of the executive world, Dorfschmid says. Organizations do this sort of thing when CEOs and CFOs leave and time is needed to conduct a search for a replacement. “It’s no different from any other interim executive position.”

Cottos, who spent three decades as a federal investigator and executive for HHS and the Department of Treasury OIGs, has been an interim compliance officer for four different hospitals (not at the same time). One gig: Cottos was interim chief compliance officer for Baylor Health Care System in Dallas while it took its time finding just the right person to replace the former compliance chief. Baylor also wanted Cottos as a pair of “fresh eyes” to evaluate the compliance program at the academic medical center, which has 17,000 employees.

He reported his findings to management in a context that was free of politics and fear of offending people or losing his job through candor. “I have no obligations to anyone. I am not there to protect or satisfy anyone. I have been called Switzerland,” a reference to his neutrality, Cottos says. “I can go to the board and tell them the truth and not be afraid it will cost me my job.” That’s how it’s supposed to work with employed compliance officers as well, but some consultants and compliance officers have said that unless compliance officers have employment contracts, there can be anxiety about bringing bad news to senior management and the board. Insisting on fixing problems (e.g., large repayments) can be painful, he says, and compliance officers don’t always get the support they should.

Interim CO Crafted Compliance Program

Before Baylor, Cottos had a very different kind of engagement at a very different kind of hospital. He spent 16 months as interim compliance officer at New York Downtown Hospital, which has 1,200 employees. “They wanted someone experienced who could put together a compliance program quickly,” he says. The lower Manhattan hospital had a coder functioning as a compliance officer, but the structure of the compliance program was not put in place “and the new CEO realized they needed a full compliance program,” Cottos says. He got busy doing things like crafting the code of conduct and establishing a compliance committee. Before New York Downtown Hospital, Cottos was compliance officer at two upstate New York hospitals.

Dorfschmid has been an interim compliance officer for one hospital, as well as for a number of smaller physician practices in a network that shared the costs of her services. “It makes sense to bundle it up and outsource it,” she says. “You have to be an outsider, and you have to be a professional who has a firewall between the practices” that are sharing the compliance officer so their respective proprietary and patient information stays private.

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