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Amid increased federal enforcement, compliance guidelines offer foundation for fraud prevention

Healthcare boards play a crucial role in managing risk

Governing boards of both health providers and insurers play a crucial role in mitigating compliance risks within their organization, particularly when it comes to identifying and preventing fraud, waste and abuse, Michael Peregrine, a partner with McDermott Will & Emory, told Compliance Weekly in a recent podcast.

Citing guidelines released in April by the Office of the Inspector General (OIG), the American Health Lawyers Association, the Health Care Compliance Association and the Association of Healthcare Internal Auditors in April, Peregrine emphasized the role that boards play in managing the wide range of players involved in the internal review process, including internal auditors, general counsel, compliance officers, and for larger companies, the chief risk manager or chief information officer.

"That is a more difficult job than may meet the eye," he said in the podcast.

Alluding to the arrest of 243 individuals involved in fraud scheme totaling $712 million last month, Peregrine added that escalating fraud enforcement by the federal government has made board involvement in compliance even more important. The OIG guidelines are aimed at a "new generation of board members" who are required to support appropriate oversight of compliance activities and outline detailed job descriptions for those who serve on the compliance committee. 

"It's a subtle, yet important reminder that boards need to put their A team on the compliance committee," he said.

Peregrine applauded the OIG's recommendation that boards make compliance-based goals a part of executive compensation. However, he added that while the guidance document provides a solid foundation for compliance, the government will expect to see larger health companies go above and beyond what is recommended by the OIG. Complex or challenging compliance issues may require more involvement from board members.

Earlier this year, FierceHealthPayer: Antifraud reported that fraud enforcement actions have made risk reduction and corporate compliance more important than ever. Last year, a survey showed that compliance departments frequently report to the board of directors or the CEO.

For more:
- listen to the Compliance Weekly podcast

Related Articles:
OIG to hospitals: Involve boards to strengthen compliance
Compliance board reporting: Relationships and trends worth tracking
As fraud crackdown grows, so does need for corporate compliance
Historic Medicare fraud takedown: Feds charge 243 people with $712M in false billing