When Do You Need an Interim Compliance Officer?
By Susan Walberg, JD MPA CHC
There are a number of occasions when an organization has the need to work on their compliance program; in many instances the first reaction is to start trying to hire someone to fill the role. Although ultimately the organization should have a full-time person (assuming we are talking about an industry where compliance officers are needed due to government expectations or industry standards, such as health care), there may be occasions where it makes sense to take a step back and bring in an interim Compliance Officer. Some of the most common scenarios are as follows:
1. Mergers, acquisitions, and new business structures/arrangements. This is probably the most common, especially in the wake of health care reform and changing reimbursement models. Organizations are looking for synergies, cost savings, and increased collaboration. As a result, there is a new organization that is usually comprised of other organizations that have existed independently. When this new organization comes together, there are certain things that have to be the primary focus areas. Patient care and clinical leadership, finance, human resources, and IT are critical areas that are typically examined and decided early in the transaction, just to make sure that things keep running.
Once the initial dust settles, however, other issues come to light. This is the point where the compliance program becomes a question. There are two likely scenarios. The first is when you have multiple compliance programs, and there needs to be only one. In this situation, there may be difficulties with employee morale, concerns over job security, and presumptions by one organization or the other that they are the ‘dominant’ or ‘superior’ program that will lead. You see this most often when a larger organization acquires a smaller one or a more specialized line of business. In this situation, it is very important to have a neutral assessment by someone who understands the compliance function and who has no ‘skin in the game’. This can be a sensitive situation, and it is important for leaders on all sides, and the Board, to understand that the goal is to identify the strengths and weaknesses, best practices and gaps, that exist in both compliance programs. This assessment may reveal some surprises, which may include recommendations that are not expected regarding the current staff.
The second common situation is where you have smaller practices or companies, that have been independent, coming together to form a larger organization to gain economies of scale and other benefits. In this situation, there may be no compliance function at all. Practice administrators or office managers may say that they are the Compliance and/or Privacy Officer. This is not uncommon, and makes sense for a small group. When they merge and become a larger organization, however, it is time to accept that they are also a larger target for government audits and, with disparate processes, may be creating greater risk for the whole based on aberrant practices by a few.
2. Government Trouble. Another situation that shines a light on a compliance program (or lack thereof) comes when a government audit or investigation reveals serious problems, especially if those problems result in fines, penalties, or a Corporate Integrity Agreement. In the latter case, a compliance program is now not only a requirement, it will be closely monitored to ensure that it addresses all the identified compliance risks. For organizations facing these types of challenges, it’s no longer sufficient to just assign compliance to someone in order to ‘check the box’.
3. Turnover. If an organization loses its Compliance Officer, it may be a good time to take stock of the program and see where things stand in order. Getting a neutral assessment can be a very good idea when there is a compliance turnover. It will help provide leadership with a good understanding of where the program may have gaps and what strengths will be particularly helpful in the permanent compliance officer.
In all of these scenarios, it may be useful to bring in an interim Compliance Officer. There are several good arguments for going in this direction. First of all, an interim Compliance Officer is not part of the existing organizational structure. This allows for an objective and experienced assessment of the compliance program and any gaps or barriers to success. That assessment can be just an independent consultant, or part of an interim role, but the benefit of an assessment as part of an interim role is that it offers the benefit of having a person onsite who can both start building any pieces that are missing, educating leadership and the board, and helping identify the type of person who would be the best fit as the permanent Compliance Officer. Compliance Officers come with a variety of backgrounds, and organization, have different strengths, weaknesses, and cultures. Leadership might think that the best Compliance Officer would be someone with an auditing background, but the company really needs someone who has strength in the clinical area to work with providers, as one example. An interim Compliance Officer can become immersed in the organization long enough to help identify those needs and help find the best fit that will provide the most benefit. This assessment will be conducted by someone who is not part of the organization’s politics, and who will have the neutrality necessary to assure all leaders that the recommendations are unbiased, without any pre-disposition toward any particular position held by various leaders.
Another reason that an interim might be a good answer is that some people are much better at designing and building a new or revamped program and others have strength in managing. If a program really needs a lot of development work, it might be a good idea to get a ‘designer’ in who can customize the program to fit the organization’s needs, making the best possible use of existing resources and staff. It’s possible that existing staff could be mentored to fill that role, if they have the right basic skills and interest. It’s valuable to have someone really make that assessment with an eye toward optimizing the current staff and establishing the best model for the specific organizational structure and culture. Once a good model is set up, then the permanent person can step in and manage something that is already functioning.
It’s also not always easy to recruit a good Compliance Officer, depending on the specific needs of the organization, the type of business or practice, and the physical location. An interim is a good idea if you have unique needs or a location that is remote or undesirable in some way. You don’t want to go without compliance coverage for an extended period, and also don’t want to make the wrong hire because you feel rushed. And, of course, if you are under government scrutiny all of that becomes a much bigger concern.
These are many factors to consider if you are deciding what to do with your compliance program. In some cases, you already know what you need, you have a smooth-running program, and a good job market, so hiring is not challenging. But if you are going through an organizational change or have gotten into compliance trouble, bringing in an interim Compliance Officer can provide you with assurance that the program is being handled and allows you to focus on the rest of the business until you are ready to get the permanent person onboard.