An Organization’s Corporate Compliance Program’s Five Imperative Components

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Table of Contents

Background
Components of a corporate compliance program
Case Study
Conclusion
Reference list

Background

A corporate compliance program entails an officially instituted program, which enables an organization to comply with all applicable laws and regulations at the local, state, and federal levels. As a result, the corporate compliance program reflects the local, state, and federal obligations that inform various activities in an organization. Additionally, the program establishes policies and standards which govern the ethical conduct of critical stakeholders in an organization. On the other hand, the corporate compliance program ensures that guidelines are in place to detect, prevent, and resolve non-compliance issues affecting the organization (Rozovsky, 1998, p. 251).

In the recent past, many corporate responsibility and compliance issues, especially in health care organizations, have brought to the forefront the paramount need for corporate directors and administrators to design corporate compliance programs which capture the uniqueness of their respective industries. Here, it is notable that the expansion of the corporate compliance responsibilities and regulatory enforcement activities in health care organizations call for enhanced management of corporate compliance programs by corporate directors and administrators to achieve the goals and objectives of delivering care services (Showalter, 2004). In this research paper, we will look at the five imperative components of an organization’s corporate compliance program, which aims at protecting the organization from fraud or abuse cases and putting the organization in a position to handle qui tam lawsuits. Furthermore, the paper reviews a case study regarding the legal issues associated with corporate compliance programs and the role played by whistleblowers and the federal governments in terms of addressing the legal issues highlighted in the case.

Components of a corporate compliance program

Given the foregoing discussions, it is obvious that most health care corporate administrators face unique challenges regarding the oversight of corporate compliance programs because health care organizations exist in a heavily scrutinized environment characterized by various risk areas. Here, health care organizations run the risk of compromising or violating the stringent rules governing patient care and the coverage of various medical services such as Medicare and Medicaid (Showalter, 2004). Furthermore, since most healthcare programs are sponsored by the governments, non-compliance to the stipulated rules and regulations present considerable risks to those healthcare organizations which lack a formal corporate compliance program. Perhaps the most adverse risk that may befall a health care organization is exclusion from government-sponsored programs such as Medicare and Medicaid. Here, an organization can be excluded from government-sponsored programs on the grounds that the subject organization participates in fraud or abuse and fails to maintain the quality of service as provided by the law (Rozovsky, 1998).

Given the current health care environment, there is the need for corporate administrators to develop formal corporate compliance programs, which capture the immediate needs and nature of the corporation and its customers (Showalter, 2004). Therefore, different organizations develop formal corporate compliance programs with different components, which serve the organization’s unique circumstances. Here, the development of corporate compliance programs depends on the experience of individual corporate administrators. As a result, an active corporate compliance program involves various components such as a code of conduct, policies and procedures, compliance infrastructure, measures to prevent non-compliance, and measures to address non-compliance (Rozovsky, 1998).

Under the code of conduct, a corporate compliance program expresses the organization’s responsibility and commitment towards carrying out the duty of care relative to applicable ethical standards. Here, the corporate administrator ensures that the code of conduct agreed upon by all critical stakeholders is incorporated into the policies and procedures, which inform the conduct of organizational staff and customers. Furthermore, the administrator ensures that the code is clearly understood and implemented by all members of the organization. Lastly, the administrator must ensure that the code of conduct is publicized and communicated across the whole organization (Rozovsky, 1998; Showalter, 2004).

Moreover, the corporate administrator should ensure that the organization has active policies and procedures which address and inform the risk areas regarding compliance by establishing and maintaining internal controls that respond to various vulnerabilities. Therefore, since the code of conduct represents an organization’s philosophy relative to ethical standards, the policies and procedures associated with the code reflect the organization’s commitment towards responding to various vulnerabilities such as erroneous claims and fraudulent schemes.

Conversely, the compliance infrastructure entails giving compliance officers the necessary authority, resources, and powers to administer the compliance program and respond appropriately to various non-compliance cases within and outside the organization. In so doing, the organization allows the compliance officers to gain access to various information sources associated with compliance activities, such as corporate reports and the activities of individual employees. Furthermore, the compliance infrastructure should be evenly distributed across the whole organization (Rozovsky, 1998).

Furthermore, the measures to prevent non-compliance entail educating and training organizational employees and customers on issues dealing with compliance. Here, corporate administrators should ensure that the critical stakeholders are provided with the necessary educational resources to identify various risk areas in their respective lines of duty. Additionally, the administrators should understand the educational programs in place to be better positioned when it comes to assessing the effectiveness of the program. Overall, an organization-wide training program will ensure that the critical stakeholders are well prepared to prevent non-compliance cases (Rozovsky, 1998).

Additionally, measures to respond to non-compliance entail the process of evaluating the effectiveness of the whole corporate compliance program and initiating appropriate measures to address the detected non-compliance cases. Here, the administrator and the board of directors institute measures to investigate the depth of allegations and criminal violations to explore the likelihood of reversing the damages. In addition, the board and the administrator ensure that all whistleblowers are adequately protected relative to the prevailing laws (Rozovsky, 1998).

Case Study

Case Summary

The ‘Eastern Idaho Health Care Fraud Lawsuit Settled’ is a case highlighted in the LocalNews8 news source and written by the news team. The case involves two speech therapists, Mathew Stevens, and Michelle Dahlberg, in a fraud lawsuit whereby it is claimed that the two individuals and their affiliate businesses were involved in using improper services to deliver speech therapy to outpatients in Eastern Idaho while billing the expenses to the Medicaid services, which are meant to cater for licensed and qualified speech therapy services (LocalNews8, 2010). Under the False Claims Act, the accused were found guilty of fraud and asked to pay $2.425 million to the government and $364,425 to the whistleblower, Jennifer Putnam.

Case Analysis

The outcomes of the case mentioned above show that the fight against health care fraud entails a close collaboration and cooperation between prosecutors, auditors, and other government regulatory agencies such as the Medicaid Program Integrity Unit and the United States Department of Health and Welfare (LocalNews8, 2010). On the other hand, the role played by the whistleblower in uncovering the fraudulent scheme cannot be ignored in this case. Furthermore, there is sufficient evidence to suggest that Stevens and Dahlberg’s businesses lack an active corporate compliance program, which would have helped the organization’s administrators and the board of directors to detect the risk area which generated the current case.

Conclusion

This research paper reviews the five most important components of a corporate compliance program, which entails an officially instituted program that enables different organizations to detect, prevent, and respond to various non-compliance issues such as false claims and fraudulent activities. In addition, the paper reviews a case, which demonstrates how different health care organizations, which lack a clear corporate compliance program, are at the risk of attracting substantial lawsuits from different stakeholders, including the government. Therefore, there is the need for all corporate administrators and managers to ensure that their organizations have in place a formal corporate compliance program that responds and addresses various compliance issues before they generate tough lawsuits.

Reference list

LocalNews8. (2010). Eastern Idaho health care fraud lawsuit settled. LocalNews8.com, Idaho State University. Web.

Rozovsky, F.A. (1998). Corporate compliance in home health: Establishing a plan, managing the risks. Maryland, U.S.: Aspen Publishers, Inc.

Showalter, J.S. (2004). The law of health care administration/ J. Stuart Showalter. New York: Health Administration Press.

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