Does Your Compliance Program Have Teeth?
WITHOUT DISCIPLINARY PROTOCOLS, YOUR EFFORTS AREN'T CONSIDERED COMPLETE.
By William A. Sarraille, J.D., and Jeffrey S. Peters, J.D.

In the last 5 years or so, a substantial number of ophthalmic practices have implemented compliance programs designed to identify and reduce the risks associated with fraud, abuse and other regulatory violations that have been attracting increased attention from federal and state law enforcement and regulatory agencies.

These compliance programs typically consist of policies, procedures, staff training, audits and other efforts that you can reasonably initiate to ensure that your practice complies with all applicable laws and provides services in an ethical and professional manner.

One of the key elements of what the U.S. Sentencing Commission Guidelines calls an "effective compliance program," is the presence of a "disciplinary protocol." But many practices are still struggling with disciplinary issues, even though dealing with these issues is critical to instituting a "real" compliance program. The good news is that there are some reasonably clear rules that your practice can follow in designing and implementing a successful disciplinary protocol. Here, we'll discuss basic rules you can follow in your practice.

What does it actually mean to have a disciplinary protocol? It means that you've set rules for appropriate employee behavior and spelled out the consequences for those who violate the standards of conduct that govern the practice.

ILLUSTRATION: AARON MCCLELLAN

When the Sentencing Commission announced the guidelines described above, many analysts who supported compliance programs as a means of creating a more positive, cooperative alternative to fraud and abuse enforcement proceedings were dismayed by the government's insistence on including a disciplinary requirement in its list of the seven essential features of an effective compliance program. Critics charged that the emphasis on discipline fundamentally -- and unfairly -- undermined the cooperative spirit that was supposed to be the foundation of compliance programs. The government, though, brushed aside that criticism, stating that it wouldn't give any credit to compliance efforts that didn't include a "stick" in the form of a disciplinary protocol.

Set general rules

All too often, practices make the mistake of attempting to define their written disciplinary protocols in too much detail, with elaborate statements that if such and such an offense occurs, then this or that punishment will be imposed. Though these kinds of efforts to set fixed and sure rules have the potential benefit of providing clarity, they are ultimately misguided and counterproductive. Why? For the simple reason that it's essentially impossible to identify and properly weigh in advance all of the factors that should be considered in determining an appropriate disciplinary action. The correct selection of a disciplinary action must be driven by the facts and circumstances presented.

If it doesn't specify in great detail the action to be taken, then what should a written disciplinary protocol say?

First, it should emphatically make the point that there will be consequences for violations of the compliance program. It should also state, clearly, the serious and important nature of any violation of the program. Arguably, this is best achieved by noting that violations of the program, such as intentional violations of the practice's standards of conduct or any applicable law, will lead to disciplinary action -- up to and including termination. Failure to cooperate with a compliance investigation, knowingly providing false or misleading information to the government, payers, patients, or the practice, and failing to report potential compliance issues to the practice are other types of offenses that may warrant the severest sanctions.

These standards clearly state the importance of compliance and the inevitability of significant consequences where inappropriate behavior is identified, but they are still general enough so that the practice has enough latitude to appropriately respond to the nuances of the facts and circumstances presented by a particular case.

Some readers may be a bit surprised to hear that discipline should be considered for a staff member who fails to report a potential compliance issue to the practice. The bottom line, though, is that such reports are the lifeblood of an effective compliance program. A practice simply can't fix a problem that it doesn't know about. It's as simple and straightforward as that.

Strive for fairness

Lost in the shuffle of many practice's efforts to define their disciplinary rules are two basic points. First, a practice should say that it will impose discipline, to the best of its ability, in a measured and consistent fashion. Second, it's extremely important that the practice state that no discipline will be imposed -- or retaliation permitted -- for any good faith report of a potential compliance issue. Both of these basic concepts go not only to the heart of a fair disciplinary protocol, but to the creation of an organization that operates in an open, respectful, and principled fashion.

All too often, compliance efforts founder because staff members perceive that there's one rule when it comes to a violation of the program committed by a physician, and a very different rule when a nonphysician employee commits a violation. This kind of situation inevitably undermines any confidence in a compliance program. It may even create such a sense of frustration and anger among affected employees that it actually supplies motivation for people to initiate whistleblower complaints with the government, something that an effective compliance program is designed to avoid.

Does that mean that when similar offenses are committed by two different persons, the same punishment must be imposed in both cases? Not necessarily. Again, there are often a number of factors that can -- and should -- be considered in evaluating how severe a violation of the compliance program is and what punishment, if any, is most appropriate. What matters is that any differences in punishment for similar offenses reflect identifiable differences in the surrounding facts and circumstances.

Weigh all the factors

Making good and defensible disciplinary decisions essentially comes down to asking yourself some basic questions aimed at understanding and evaluating both the mitigating and aggravating factors:

How serious was the offense? Did it constitute a serious or criminal violation of law? Did it create a real threat to patient safety? Did the offense create a serious risk of financial loss to the practice?

How culpable was the person who committed the offense? Was it a purposeful, knowing, reckless, or merely negligent act?

How clear or unclear was the standard, rule, regulation or law that was violated? Was training on this issue offered by the practice? Was the issue addressed in a policy and procedure? Was the issue just a matter of common sense, even if not the subject of any formal training or written policy and procedure?

What is the disciplinary history of the person whose actions are being reviewed? Is this a first offense? Have there been multiple offenses in the past? Were any prior offenses similar to the one at issue now?

Did the offender make any attempt to rectify the compliance issue? Did the person report the issue himself? Even if he didn't make the initial report, did he cooperate fully in the ensuing investigation?

These basic questions can help an organization to choose from among the standard hierarchy of disciplinary options in a way that will inspire confidence in the compliance program. Typically, the range of disciplinary sanctions includes:

• oral reprimand
• written reprimand
• suspension
• reduction in pay or perquisites
• demotion
• termination
• referral to a regulatory or law enforcement agency.

Discipline and employee rights

There may be limitations on a practice's ability to invoke one or more of these disciplinary actions. For instance, if an employee isn't an "at-will" worker, and has an employment contract that specifies the rights of both the employee and the employer, there may not be a contractual basis to impose a particular sanction for a specific offense. For those few practices that have to operate under union rules, such as those in certain faculty practice plans associated with an academic medical center, the union contract may preclude discipline, or require certain conditions to be met before discipline is imposed.

Unfortunately, more than a few practices have implemented poorly written disciplinary protocols that effectively provide at-will employees with employment relationships that impose limitations on the employer's right to take disciplinary action. For this reason, it's critical that any compliance program and its disciplinary protocol state clearly and unambiguously that these documents are providing no new employment rights for employees.

Just as it's important to ensure that a compliance program's disciplinary program is consistent with the practice's employment agreements, it's equally important that the program be consistent with the practice's shareholder agreements. The best disciplinary protocol in the world won't be of much use in attempting to discipline a shareholder whose agreement doesn't provide for punishments for false billing, upcoding, or any other violation of a compliance program.

It's never going to be easy to deal with disciplinary issues. But with some forethought, you will be able to integrate fair and realistic sanctions into an effective compliance program in a way that will significantly improve your practice's level of compliance. OM

William Sarraille is a partner and Jeffrey S. Peters an associate at the Washington, D.C. law firm of Arent Fox, which represents ophthalmologists across the country in regulatory, compliance, litigation, fraud and abuse and corporate matters. Mr. Sarraille speaks nationally on a wide range of ophthalmic topics, including ambulatory surgery issues, physician contracts, fraud and abuse topics and HIPAA privacy issues.