Strategies for internal compliance investigations
October 14, 2002 4 minutes read
While internal investigations are not listed among the seven elements of effective compliance in the Federal Sentencing Guidelines, Steven Ortquist, chief compliance officer at Banner Health System in Phoenix, says the need for investigations of suspected wrongdoing is clearly implied in the sentencing guideline’s description of what a compliance program requires.
"Both mechanisms for ensuring compliance and corrective action, two of the seven compliance program elements, assume the existence of an ability to investigate possible noncompliance," he explains.
One of the most important goals of an internal investigation is to determine whether a suspected violation of law or compliance program requirement has in fact occurred, Ortquist says. "However, this threshold determination is only part of what an internal investigation must be designed to identify," he adds.
Ortquist says an internal investigation also should determine the scope of the violation, the scope of any harm that was caused, and identify the person or persons involved in activities that created the violation.
According to Ortquist, an effective investigation may allow an organization to identify and correct violations before they ever come to the attention of government investigators, letting providers take full advantage of self-disclosure protocols when this is an appropriate response.
Likewise, he says an effective internal investigation also may allow an organization to head-off a qui tam lawsuit that might otherwise be filed. "Even when an internal investigation protocol must operate in parallel with a government investigation, having such a protocol in place may allow an organization to work with the government in defining the scope and direction of the investigation," he says.
When developing a compliance program, Ortquist says organizations should consider developing a plan for conducting internal investigations. "The internal investigation plan could take the form of a formally adopted policy and procedure or it could simply be a guiding document for the compliance program," he explains.
Ortquist says such a plan will help to assure that internal investigations are methodical, consistent and thorough. He notes that conducting internal investigations according to a plan also can protect the compliance officer from allegations that he or she neglected his or her duties if the investigation later comes under scrutiny.
"Conducting an appropriate and thorough internal investigation is often as much an art as it is a science," Ortquist contends. Because the scope and direction of each investigation will turn on a specific set of facts and circumstances, he says the plan should offer the compliance officer discretion at each step to determine whether an element of an internal investigation is necessary and to determine how each element of the investigation will be conducted.
According to Ortquist, the steps and strategies outlined below all can be included in an organization's internal investigation plan:
- When a report is received, take steps to preserve evidence. When the compliance department receives a report of possible impropriety, the compliance officer should immediately consider whether any steps are necessary to preserve possible evidence, says Ortquist. "Corporate scandals in recent months have been a reminder of the consequences of destroying evidence after a government investigation has begun," he warns.
He says possible steps might include restricting access to evidentiary material, such as revoking computer passwords, sequestering medical or billing records, or even removing an employee who is suspected of wrongdoing while the investigation is under way.
While fixing problems is part of compliance, in the early stages of an investigation, compliance officers often will need to decelerate the desire of those involved to get things fixed as soon as possible, Ortquist says. "Delaying a fix’ does not mean that known improprieties should be allowed to continue," he explains. "Instead, it may be necessary to halt the activities in question while an investigation is undertaken."
- After achieving a basic understanding of the possible problem, develop a basic understanding of the applicable rules. Health care compliance investigations often involve possible noncompliance with complex laws, regulations, or billing rules. Ortquist says that makes it important for compliance investigators to have immediate access to resources that will allow the investigator to research the laws, rules, and regulations in question.
While thorough research is necessary to a comprehensive compliance investigation, Ortquist says the need to conduct this research must be balanced with the need to work quickly. He says one way to achieve this balance is to use staff or outsiders who have a full understanding of the rules in question to assist compliance investigators. In some circumstances, these individuals might even be able to assist in conducting portions of the investigation, he adds.
- Work quickly, but be thorough. Ortquist says it is important to work quickly, especially during the initial stages of the investigation because evidence is easier to find if it is collected soon after the alleged impropriety occurs. "With time, evidence will go stale or disappear, and the memories of those who might have witnessed the wrongdoing will dim or be corrupted by conversations with others about their recollections of what occurred," he warns.
In addition, many of the regulatory schemes that affect health care organizations require organizations to report discovered violations soon after they are discovered. For example, Drug Enforcement Administration (DEA) regulations require prompt reporting of theft or diversion of controlled substances to the diversion unit of the DEA.
Organizations that discover legal violations that result in false claims liability may benefit from reduced penalties for self-disclosure if the disclosure is made within 30 days of the discovery of the violations, he adds.
While it is important to work quickly, Ortquist says it also is important to establish realistic expectation about the investigative process. Completing a thorough investigation of an alleged compliance violation sometimes can take months or even years, he says. He points to one experienced practitioner who has noted that a typical internal investigation will take between three months and two years to complete.
"Work quickly, but don’t rush the process," he concludes. "While it is important to draw conclusions, it is equally or even more important to make certain that those conclusions are correct."
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