Ethics Whisperer

Monday, February 16, 2015

4 Myths about Compliance Program Assessment

The first myth about compliance program assessment is that it is an optional part of an effective compliance program. The same sentence in the Sentencing Guidelines that mandates a hotline also mandates compliance program assessment. And, even if program assessment were not mandatory, it is would be incumbent on your organization to undertake assessment. Organizations measure what is important to them.  If there is no call for compliance program assessment in your organization, your compliance program is not as important as it should be.

The second myth about compliance program assessment is that an internally conducted assessment is as good as an externally conducted assessment. Internally conducted program assessments are good and they are useful. But they are also conflicted. It is a rule in audit - and should be a rule in compliance - that you don't audit your own work. Both compliance and internal audit are part of the control environment of the organization and both need to be periodically assessed externally. This need not be an annual activity but there should be a fixed schedule such as every 3 or 5 years.

The third myth is that it is risky to have an external program assessment since it may turn out negatively. It is true that an assessment that turns out positively is more protective than one that indicates a flawed compliance program. But we have seen more than one case in which a negative assessment, when paired with a detailed plan of remediation, has forestalled a CIA or other enforcement action. Why? The fact that you conducted and acted on a program assessment indicates that your organization takes its compliance program seriously and will remedy weaknesses without prodding from the outside.

A final myth about compliance program assessment is that everyone uses the same standards. While this may seem to be the case, different consultants interpret the relevant external standards in widely different ways. The standards to be used in your assessment should be fully disclosed before you choose an assessor. A good assessment also includes bench marking. Boards and senior executives are often indifferent to consultants’ opinions. But they are interested in real information about how your organization stacks up against other like organizations. For more information visit

Sunday, September 21, 2014

Compliance Headhunters

We are contacted by headhunters because we know a lot of compliance officers and we know whether they are available. However, it is extremely difficult to help these folks as they often have no idea what a compliance officer does. They are generally working from a job description written by someone in HR who also has little idea what a compliance officer does. The essence of the job of a compliance officer is the ability to influence others to do the right thing. This does not translate into a certain college degree or work history. When describing a compliance position to a headhunter, don’t forget to include BEHAVIORAL requirements and expectations. This will save the headhunter and job candidates a lot of time

Sunday, September 7, 2014

Keeping up

While there will continue to be new posts on longer topics on, I also encourage you to follow, which is updated more frequently and focuses on issues of the day. Of course, your comments are always welcome on any of our sites.

Saturday, July 12, 2014

The Next Hot Word in Compliance

Hear yea! Hear yea! Hear yea! The next hot word in compliance will be UPQUALING. This, of course, is on the model of UPCODING. Healthcare reform is a gamble on the idea that incentives can be given to lower the cost of care while maintaining or improving its quality. This has been tried before with limited success under the rubrics "managed care," "HMO" or "Medicare Part C." The problem is that these strategies have not been wildly successful at saving money and they run into the fact that folks just don't trust that the quality of care is the same. So reform is taking a two pronged attack by rewarding providers who concurrently lower costs and maintain or improve quality. This is the main idea behind ACOs and the Medicare Shared Savings Program. The problem with this is that quality is in the eye of the beholder - and, in this case, CMS is the beholder. CMS has done the only possible thing, and done it well, which is to prescribe a set of areas that are important to healthcare while being measurable. In other words, money will now follow quality as measured against this prescribed set of measures. When money follows coding, we get upcoding, which is one of the reasons compliance exists in healthcare today. But where is compliance with respect to the equally tempting risk of upqualing - fudging the numbers so the quality of your outcomes appears better than it really is? This is the next frontier and it will go by the awkward word "upqualing" - or so I am betting.

Sunday, February 9, 2014

A Big Compliance Mistake

Secretary of the US Department of Health and Human Services Kathleen Sibelius recently announced that health plans offered through exchanges will not be considered Federal health plans – and many breathed a huge sigh of relief. Not so easy.

What the Secretary's announcement means is that plans purchased through exchanges will not be administratively under the oversight of CMS. This is a significant burden avoided. But it is creating a false sense of security among plans and providers who seem to think that this makes compliance an afterthought

In the case of many, probably most, plans purchased through exchanges, Federal dollars in the form of premium subsidies are at issue. When Federal dollars are being spent, the False Claims Act (FCA) applies. This means that although the health plans offered through exchanges are not Federal health plans, they may have the same exposure to both governmental and whistle blower FCA actions that anyone who bills Medicare or Medicaid has. Not only do plans offered through exchanges have this exposure, anyone who bills these plans also may have FCA exposure.

Think about this way. A company which manufactures bullets for the US Department of Defense is not a Federal entity. While DOD may provide oversight, that is a matter of a contractual relationship. But the bullet maker is certainly a potential target of an FCA lawsuit if they bilk the government.

I make it a point to know members of the plaintiff's bar, and, believe me, they are assuming applicability of the FCA to plans offered through exchanges and to those who bill them. It will take a while to see how this works out but it would be foolish to hug the Secretary Sibelius security blanket until this works itself through the court system. Do we really expect the government to demure if an exchange health plan defrauds the government?

In practical terms, this means that plans offered through exchanges have every bit as much reason to have full-blown compliance programs as the hospital down the street. Similarly, those who bill such plans should uphold the same standards as when they bill Medicare.

Saturday, November 30, 2013

5 Ethical Quandaries

You may think that challenging ethical issues are never really resolved.  In my new book Make an Ethical Difference, I argue that we all have an innate ability to make sound ethical judgments. Not only do we have an innate ethics sense, we can use it to resolve even the thorniest ethical issues. Here are some examples of ethical quandaries that arise in everyday life, along with some tips on how to resolve them. Post your solutions here.

Five Ethical Quandaries and How to Think Through Them

Quandary #1: An Offer You Can’t Refuse?

Just after your current employer has promoted you and given you a substantial raise, you receive an attractive job offer from a direct competitor. When you got your promotion, you told your boss that you were “in it for the long haul,” but now you are not so sure. You wonder if you should tell your boss about the offer.

How to Think This Through

You have to decide if you owe loyalty to your employer and your boss. Even though your current company promoted you, the promotion was based on merit, not loyalty. To make an ethically sound decision, look at the situation in the eyes of the other affected parties. If you were in their shoes, what would you expect? And, more importantly, is this expectation reasonable?

Quandary #2: My Back Yard

A developer wants to build a casino immediately adjacent to your neighborhood. You recognize that the casino will benefit most of the community - except for those who live adjacent to it. You wonder if it is right to oppose the casino based on your interests and the interests of a few others in the community.

How to Think This Through

While you are correct to consider the benefits to all concerned, there is more to the story. You also need to consider the benefits of having a system of property use that protects property holders. So it comes down to whether the benefits to the community outweigh the benefits of protecting the rights of property holders. Be sure to factor in your own bias as someone directly affected by the casino.

Quandary #3: No Pain

You are a doctor and one of your patients who opposes euthanasia on religious grounds, asks you to do whatever is necessary to stop his pain. The level of drugs needed to stop the pain will almost certainly kill the patient in short order. The patient recognizes this but still wants the pain stopped.

How to Think This Through

The ethical rules of the patient prohibit euthanasia and yet you are being asked to participate in actions having the same outcome as euthanasia. Consider your own ethical rules on how to practice medicine. You are being asked to challenge your own conscience in order to relieve the patient's conscience. This is not just between you and the patient, but between you and your conscience.

Quandary #4: Bell Curve Blues

A scientific experiment you conducted on inheritance seems to inadvertently show that people of certain races are less intelligent than people of other races. You wonder whether you should publish this research. You know that many will distort your conclusions to support their own racist beliefs.

How to Think This Through

While a scientist is required to respect the scientific method, this does not mean that you have to publish everything the data supports. While you have to face the facts, you do not have to publicize them especially if they are open to misinterpretation. You have to decide whether the benefits of sharing this research publicly outweigh the likely fall out from it.

Quandary #5: Speed Kills

The company you work for is deciding whether to build a super fast car for street use. There is a demand for the car and your company needs the boost this signature product would give it. But you wonder if it is right to produce a car that capable of travelling at two or three times any posted speed limit.

How to Think This Through

Consider the interests of the parties to this situation While the interests of your company are clear enough, you have to consider the interests of those who might be affected if the car is built and sold. It is not only the drivers of superfast cars that are injured by them. On the other hand, if your company does not build the car, won't some other company make an equally fast car?  Does this make a difference?

Friday, March 1, 2013

Career Traps Survey

Over the past 12 to 18 months, we spent a lot of time talking to compliance officers who had either been terminated or were in danger of termination. We also spent time talking to headhunters looking to fill positions that had been abruptly vacated. We wondered if this career turbulence was due to a black cloud over our circle of acquaintances or if the market had truly turned harsh.

To answer to this question, we administered a survey to our entire email list with the promise that we would report the main results to you. More than half of our list members who opened the survey responded giving us reasonable confidence in the results.

This is the report of the results of the survey.

After each result, there is brief commentary on the result.

1. How long have you been employed by your current organization in a compliance position?

less than 3 years                                                  24%
3 to 7 years                                                          33%
more than 7 years                                                43%

Of respondents, 76% were employed by their current organization in a compliance position for more than three years. Even 5 years ago, you could not have expected such a result, which indicates that the field of compliance is maturing.

2. As best you can estimate, the highest level compliance position in your organization is:

Executive/Senior Vice President                          32%
Vice President                                                      34%
Director                                                                22%
Department Head                                                  5%
Manager.                                                               6%

If you make the assumption that the top compliance position at an organizations should be at least at the Vice President level, then 66% of respondents  indicate that the level of the  top compliance position in their organization is appropriate.

3. Have you ever been fired from or forced out of a compliance position?

Yes                                                                        15%
No.                                                                        85%

While there is no baseline reference point this topic, 15% is a significant number of compliance professionals who have left their organizations under adverse circumstances. Remember that this is not just left the organization; it is fired or forced out.

4. I think my job is:

Very Secure                                                            33%
Somewhat Secure                                                   54%
Somewhat Insecure                                                 7%
Very Insecure.                                                          6%

13% of respondents think their job is insecure, with 67% believing that there is at least some level of insecurity in their positions. While some respondents in the "somewhat secure" category noted that there is a certain amount of job insecurity in general, most comments pointed to specific reasons for the perceived insecurity.

5. Have you ever investigated a compliance complaint against member of senior management?

Yes                                                                         53%
No                                                                          46%

A majority of compliance professional respondents have investigated complaints against senior management.

6. If you answered yes to the preceding questions, what happened when you did so.

The problem was resolved to your satisfaction.            67%
I had to leave the organization.                                     16%
I stayed but was uncomfortable.                                    13%
I voluntarily changed employers.                                    4%

Of those who investigated complaints against senior management, 33% experienced adverse consequences for doing so.

7. Have you ever considered becoming a whistle blower?

Yes                                                                                     21%           
No.                                                                                     79%

A surprisingly high 21% of responding compliance professionals have considered becoming whistle blowers. While the open comments indicate that not all compliance professionals considering blowing the whistle are thinking of a False Claims Act lawsuit, many are.


My reading of these results is that there is a surprising amount of perceived job insecurity among compliance professionals. The inherent frustrations of the position are indicated by the number of respondents who have considered blowing the whistle on their organizations. It is time for compliance professionals to take seriously the idea that their employment should either be at the discretion of the board and/or protected under a multi-year contract.

Copyright 2013, Mark Pastin