Health Care Compliance Investigations Involving Senior Leaders or Board Members

Health care compliance officers are charged with implementing an effective compliance program but the board of directors is ultimately responsible for compliance oversight. Serious compliance investigations are routinely reported to senior leadership and the board compliance committee as part of their oversight responsibilities. But what happens when the subject of the investigation is a member of the CEO, a senior leader, or a board member?

One simply has to read the latest healthcare enforcement news to know that bad actors can be anywhere in an organization. Compliance officers need a solid roadmap for navigating when an investigation leads to those at the top of the organization.

First and foremost, compliance officers need a direct line of communication to the CEO and the board. Issues involving senior leaders must be brought to the immediate attention of the CEO, and if the CEO is subject of the investigation, the board compliance committee needs to guide the investigation. The Compliance Officer should have access to the CEO’s employment contract. In many cases, these contracts layout compliance expectations for the CEO and the Compliance Officer cannot enforce those if s/he is not aware of them.

The Compliance Officer must have independent access to outside counsel without having to go through the General Counsel’s office. This is critical if the Compliance Officer and General Counsel do not agree on a particular matter or in the event the General Counsel is the subject of the investigation. Even if the Compliance Officer and General Counsel are on the same page, it is a good idea to involve outside counsel in any investigation involving a senior leader. It is not unheard of for a board member to be the subject of a compliance investigation. Independent outside counsel will be imperative in such a situation.

Last, but not least, the Compliance Officer should insist on certain protections for their position. These protections can be incorporated in an employment contract or enforced by the corporate bylaws and should prohibit any employment actions from being taken against the Compliance Officer without board approval. This will protect the independence of the position and is especially critical if the CEO is the bad actor or attempts to subvert the compliance officer’s efforts.

Even the most effective compliance program cannot stop bad actors. The U.S. Federal Sentencing Guidelines for Organizations list seven (7) fundamental elements of an effective compliance program:

1) Implementing written policies, procedures, and standards of conduct

2) Designating a compliance officer and a compliance committee

3) Conductive effective education and training

4) Developing effective lines of communication

5) Conducting internal monitoring and auditing

6) Enforcing standards through well-publicized disciplinary guidelines

7) Responding promptly to detected offenses and undertaking corrective action.

Many factors contribute to the success and effectiveness of a healthcare compliance program, but few are as important and impactful as tone at the top. Tone at the top generally refers to the level of commitment by senior leaders and the board to an ethical, compliant, and transparent organization. Although tone at the top is not specifically stated as one of the fundamental elements, without it, the elements are much less effective. Leaders must endeavor to ensure that all those who report to them have sufficient information to comply with the law, regulations, and policies as well as the resources to resolve ethical dilemmas. They must help create a culture that promotes the highest standards of ethics and compliance and encourage everyone to raise concerns when they arise. Ethical and compliant behavior must never be compromised in the pursuit of business objectives and no one, regardless of their position within the organization should be “above the law”.