1 Compliance For Mental/Behavioral Health and Alcohol/Substance Abuse Treatment Entities Lawrence M. Schoen, Ph.D. and John A. Beattie, CPA, CFE Chicago, Illinois, April 2007 Today’s Agenda 1. The Behavioral Health Environment - One Urban Area 1. The Behavioral Health Environment - One Urban Area 2. Behavioral Aspects of Compliance 2. Behavioral Aspects of Compliance 3. Essential Compliance Elements 3. Essential Compliance Elements 4. Aim for Effective Compliance 4. Aim for Effective Compliance
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Compliance For Mental/Behavioral Health and Alcohol/Substance
Abuse Treatment Entities
Lawrence M. Schoen, Ph.D.and
John A. Beattie, CPA, CFE
Chicago, Illinois, April 2007
Today’s Agenda
1. The Behavioral Health Environment - One Urban Area1. The Behavioral Health Environment - One Urban Area
2. Behavioral Aspects of Compliance2. Behavioral Aspects of Compliance
3. Essential Compliance Elements3. Essential Compliance Elements
4. Aim for Effective Compliance4. Aim for Effective Compliance
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Know Your AudienceTypical HCCA Audience Categories: – Direct Industry Segment Employees – Mental/Behavioral
Health and Alcohol/Substance Abuse Entities– Employees of Related Industry Providers – Hospitals, etc.– Independent Consultants, CPAs, Attorneys, etc.– Government, Fiscal Agents, Provider Safeguard Contractors’
Employees – Other Interested PartiesThe program is primarily tailored to the direct industry segment
but has aspects that address a wider audience. Different segments of the presentation may be very familiar to different groups of audience members.
“Your never too old to grow young.” Mae West
The Behavioral Health Environment
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Compliance Acceptance and Integration• Working with a Well-Adjusted Organization,
De-Escalation Techniques• Unique Talents Lend to New Compliance
Dimensions• Adoption Well Suited to Mental/Behavioral
Health and Alcohol/Substance Abuse Treatment Environment – Treatment is a Structured Process
• Financial and Operational Controls through Advanced Information Systems Interfacing v. Fred Flintstone
The Behavioral Health Environment One Urban Area
Wedge is Unique - A Successful For Profit Entity In a Sea of Non-Profits, Internally Funding A Research Position To Improve Their Treatment and Service Delivery
Industry Consist of Generally Devoted, Low Paid Employees serving a Disenfranchised, Poor Population
Tight Reigns on Expenses = Little Money for Traditional Compliance (DEFRA)
Significant Governmental Funding Through Medicaid Funneled by State through County onto a Non-Profit Managed Care Organization (“MCO”) underwritten by City of Philadelphia v. Suburban Counties (Bucks, Montgomery, Chester, Delaware) which funnel money to a subcontracted MCO.
Treatment levels (Outpatient, Intensive Outpatient, Partial Hospitalization, etc.) are related to intensity of services
Need: Substance Abuse and Dependence kills over 500,000 US residents annually, Billions Lost to Employee Absenteeism
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Philadelphia Office Of Behavioral Health/Mental Retardation Services – Major Funding Source
FEDERAL ENFORCEMENT APPROPRIATIONS, AND FEDERAL ENFORCEMENT APPROPRIATIONS, AND INVESTIGATIVE STATISTICSINVESTIGATIVE STATISTICS
• Health care fraud investigative appropriations for FY 2005:
• FBI $114 Million • OIG $160 Million• CMS MIP $713 Million • Investigative Statistics for FY 2005:• Judgments/Settlements: $1.47 Billion• Criminal Convictions: 523• Civil Investigations: 2,112• Criminal Investigations: 2,624Source: DHHS/DOJ Health Care Fraud and Abuse Control Program Annual Report for FY 2005 and Sept 2005
GAO Highlights GAO-06-813
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Enter the Deficit Reduction Act of 2005 (“DEFRA”)
• Condition of Payment for Certain Medicaid Providers (Receive or makes at least $5 million in annual payments.)
• Establishes a new Medicaid Integrity Program• Incentives to States for enacting laws Similar
to FCA• Written Policies needed for all employees,
including management, contractors and agents.
Behavioral Aspects of Compliance
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Compliance Committee Members
Who is Missing? • Chief Compliance Officer (Chairperson)• Vice President of Operations• Chief Financial Officer• Chief Operating Officer• Director of Human Resources• Administrative Director• Executive Director
Psychological Concerns Affecting the Compliance Committee
• Social Conformity– Solomon Asche:– When a participant (as part of a group) is
faced with a simple question (Of three lines, labeled A, B, and C, which is tallest?) and obvious answer, they can succumb to conformity.
– When the group agrees on the wrong answer, the participant will go along with the group in three of four times.
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Psychological Concerns Affecting the Compliance Committee
• People conform for two main reasons: – because they want to be liked by the group
and– because they believe the group is better
informed than they are.
Group Think
• Sacrifice individual creativity and independent thinking for group cohesiveness.
• Seen when an intimidating or powerful leader (CEO or president) is present within the group.
• Precipitates a false sense of invulnerability, collective rationalization, and self censorship
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Group Think
• Avoid Group Think– Make group aware of the phenomenon– Have leader speak last– Give priority to airing objections and
opposing view points– Use of subgroups to provide independent
ideas
Social Loafing
• Combined performance equals or exceeds individual work.– People make less effort to achieve a goal
when working as part of a group.– Laziness concealed by the work of others
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Social Loafing
• Three C’s to avoid social loafing– Collaboration: Assign each member a
meaningful task.– Content: Identify the importance of each
member’s specific tasks.– Choice: Whenever possible, give group
members the opportunity to choose what tasks they will take on.
Stanley Milgram
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Milgram Experiment
• Series of social psychological experiments which measured the willingness of participants to obey an authority figure who instructed them to perform acts in conflict with their conscience.
• Participant ordered by scientist to inflict pain on another person.
Milgram Experiment
• Hypothesis:– Very few individuals would be prepared to
inflict the maximum voltage.– 26 of 40 participants inflicted the full 450
volt shock. (Participants did not know the victim was an actor.)
– Everyone paused at some point and questioned the experiment; however, no one steadfastly refused to give further shocks below 300 volts.
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Milgram Experiment
• Relatively few people have the resources needed to resist authority.
• None of the participants who refused to inflict the final shocks insisted that the experiment be terminated nor left the room to check on the victim without asking for permission.
Stanley Milgram"With numbing regularity good people were seen to
knuckle under the demands of authority and perform actions that were callous and severe. Men who are in everyday life responsible and decent were seduced by the trappings of authority, by the control of their perceptions, and by the uncritical acceptance of the experimenter's definition of the situation, into performing harsh acts. A substantial proportion of people do what they are told to do, irrespective of the content of the act and without limitations of conscience, so long as they perceive that the command comes from a legitimate authority." (S. Milgram,1965)
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Milgram Experiment
• Theory of Conformism– A subject who has no ability or expertise to
make a decision will leave it to the group and its hierarchy.
• Agentic State Theory– A person comes to view himself as an
instrument for carrying out another person’s wishes and transfers responsibility for their actions to the authority figure.
Essential Compliance Elements
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Top Ten Effective Practices To Foster Values
CEO Support
Performance Appraisals
Codified Corporate Statements
Training
Internal Communications
Incentive Compensation
Non-monetary Rewards
Internal Monitoring/Audit
Recruitment and Hiring
External Review of ManagementSource: strategy + business, Summer 2005, The Value of Corporate Values, Reggie Van Lee, Lisa Fabish and NancyMcGaw
Compliance Elements
2Oversight
Responsibility
3Lines
ofCommunication
Text
1Standards and
Procedures
5Auditing
and Monitoring
7Response
andPrevention
4Education
6 Enforcement
AndDiscipline
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Best Compliance Model – Research
LinesOf
Communication
Text
Auditingand
Monitoring
Responseand
Prevention
Education
Written Compliance PoliciesDEFRA Requirements
Compliance Policies Must Contain Information Addressing (Also Include in Employee Handbooks):– Federal FCA 31 U.S.C. 3729-3733– Administrative remedies for false claims and
statements per 31 U.S.C. 3801 et seq.– Whistle protections per state law, if any and FCA– Any State Laws for False Claims– Detailed policies and procedures to prevent and
detect fraud, waste and abuse in federally funded programs
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Education and Training Principles A Treatment Modality
• Employees must be provided with compliance-related, job-specific training at least once a year.
• Education must include the high-risk elements for the particular organization.
• The education program must be reviewed yearly.
• The education program must be routinely updated.
Frequency of Education and Training
Annually88.6%
Every Other Year3.8%
Twice Annually
3.8%
Other3.8%
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Lines of Communication Principles Communication - The Foundation for Behavioral Health
• Organizations must have a mechanism for employees to report suspected compliance violations 24/7 – Hotline
• Employees must be ensured anonymity• Organizations must ensure that employees
who report suspected violations do not face retribution or retaliation
• If employees use the reporting system and identify themselves, they must receive timely feedback on the report.
Response and Prevention Principles
• All corrective action taken in response to policy and compliance violations must have written documentation.
• Board of Director minutes reflect active oversight of the compliance program’s activity
• A process exists to determine where legal counsel should be involved in investigative activity
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Response and Prevention Principles• Written documentation of all internal
investigations must be maintained• At a minimum, this documentation must
include a description of the issue and how it was handled.
• There must be a process for maintaining any investigative evidence.
• Finally, there must be a process for an independent investigation to verify that necessary corrective actions were completed.
Ongoing Monitoring and Auditing: RationaleBehavioral Therapy and Reinforcement
Effective compliance programs include proactive monitoring and auditing functions that are designed to test and confirm compliance with legal requirements and with the organization’s written compliance standards.
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Proactive Approach
• Learn the business• Identify the risks• Catalogue Symptoms• Look for Symptoms• Investigate• Assess Results• Implement Corrective Actions
Seven Component FrameworkFor Compliance Auditing and Monitoring
• Perform a Risk Assessment and determine the level of risk
• Understand laws and regulations• Obtain or establish policies for specific issues
and areas• Educate on the policies and procedures• Monitor Compliance with laws and
regulations• Audit the highest risk areas• Re-educate staff on regulations and issues
identified in the auditDeveloped by Association of Healthcare Internal Auditors and Health Care Compliance Association
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Compliance Monitoring Plan
Contains:Data FeedsMonitoring MethodsRationale for Specific Monitoring Method Range and Critical ValuesReporting ChainsResolution Logistics
MonitoringLevel of Service Based on IntensityExample: Intensive Outpatient
Patient must attend three times per week, three hours sessions divided into one hour psycho-educational lecture and two hour group therapy, not required to attend all three hours per session. 30 minutes for individual therapy. 9.5 hours per weekSign in sheetsNot in attendance for 30 days = dischargeTies into electronic therapy notes on a per therapist, per patient basisScores of patients, multiple therapists, multiple sessions
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Work Plan DevelopmentThe Treatment Tool Kit
• OIG Work Plan• New Regulations, Billing Requirements• Brainstorming (SAS 99)• Employee and Patient Complaints • Unsealed Qui Tam Actions• Patient Satisfaction Surveys• Media• Process Analysis, Analytical Review• Spin-off Audit/Investigative Issues• Threshold Triggers, Unusual Fluctuations • Data Mining
SAS 99Because Mental/Behavioral Health and Alcohol/ Substance Abuse Entities Usually have tight margins, the Compliance Officer may have to become involved in expanded compliance activities of a financial nature.
Auditors responsibilities are to plan and perform the audit to obtain reasonable assurance that the financial statements are free of material misstatement, whether caused by error or fraud.
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SAS 99 - Considerations
Cannot assume management is always honest.
Pressure – rationalization – opportunity = the fraud triangle.
Discuss - How financial statements may be susceptible to fraud, how it may be perpetrated and concealed and how could assets be misappropriated.
Inquiries of management for their views.
SAS 99 Considerations
Does anyone have any knowledge or suspicions of fraud.
Related party transactions, ineffective monitoring, inadequate internal controls such as segregation of duties, (“My way or the highway.”), communication of questionable ethics or values, failure to receive promotions, layoffs, inadequate physical safeguards, unusual changes in lifestyle, etc.
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SAS 99 ConsiderationsSAS 99 does not require auditors to perform tests specifically to evaluate programs and controls for the prevention, detection and deterrence of fraud.
You should not conclude a risk is mitigated by a control without knowledge that the control is appropriately designed and operating.
Auditors may respond to a fraud risk by modifying the nature, timing and extent of their procedures and substantive tests. This includes greater observation and inspection, surprise and unpredictability of procedures, increased sample sizes, more detailed analytical review, etc.
Work Plan Development Organizational Risks To Consider
• New Personnel (Human Resources)• Changed Information System (IT)• New Services• Regulation Changes (Patient
– Unrestricted Random, Single Silo– Stratification– Network (Snowball) Sampling– Multi-stage
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Statistical Plan Development
• Determination of Sample Size• Method of Selecting Sample Items• Treatment of Missing Sample Items• Characteristics to be Measured• Extrapolation Methodology
Auditing and Monitoring Principles
• Both auditing and monitoring activities must address organizational, governmental regulatory and industry risks
• Auditors must have complete access to information they require to complete the audit
• Auditors have independence in conducting audits
• Audit results are distributed to the appropriate members of management
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Auditing and Monitoring Principles
• Verify that the documented policies and procedures are reflected in the processes and that the policies and procedures are technically correct
• Monitoring activities include a review of compliance controls (automated and manual) that ensure they address the organization’s hiring and employment practices
Auditing and Monitoring Principles
• Audit plan is established at the beginning of every fiscal year and outlines timelines for audit activities
• Audit plans are adjusted as necessary• Legal is involved in the audit process
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Auditing and Monitoring Principles
Audit plans address behavioral health and alcohol/substance abuse industry segment risk areas. (Theft of service, HIPAA, documentation, Urine Testing [Random, Temp., Creatinine, Ph Level] hiring and employment, billing).
Auditing and Monitoring Principles
• Audit activities verify that controls are in place to:– Disseminate regulatory information– Log all incoming calls to the compliance
hotline– Ensure that any regulatory changes from a
third party communication are made timely
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Immediate Focus Areas
1. Criminal Background and Sanctions Checks and the Employment Application
2. Security and Privacy of PHI –Physical Security Measures
3. Documentation Complete before Billing
4. Exit Interviews – Review Replies and Modify Questions
Aim For Effective Compliance
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An Effective Compliance Program • Effective compliance programs prevent
improper payments. • Effective compliance programs are good
business that increase intangible value and foster good corporate citizenship.
• Effective compliance programs develop cultures and structures based on best business practices that facilitate high quality treatment and its delivery.
Effectiveness A Two-Dimensional Evaluation
• Effectiveness is evaluated along two dimensions:
– Effort– Outcome
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Effort and Outcome Defined
“Effort is the time, money, resources and commitment that an organization puts into building and improving a compliance program.”
“Outcomes are the impact that our efforts have on our level of compliance.”
Ongoing Monitoring and Auditing
• Effort– Is the organization conducting a regular auditing
and monitoring program consistent with the size, complexity and scope of its business operations?
– To the extent possible, are audit staff responsible for conducting compliance audits independent from the areas of the organization that they are auditing?
– Does the organization have a written compliance auditing and monitoring plan that includes subject, method, and frequency of audits? (Workplan)
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Compliance Auditing Effectiveness
• Why is one engagement effective and another ineffective?– Planning, Criteria Research, Analysis,
