Board Members’ Roles in HHSC Compliance Program – Hawaii Health Systems Corporation

Bloomberg BNA—Health Care Program Compliance Guide Monthly Focus
- New Federal Statutes make BOD oversight more important
  - False Claims Act changes make it easier for whistleblowers
  - “Intent Standard” for anti-kickback law amended to not require direct knowledge– “known or should have known” is new language
- More aggressive anti-fraud cases–Less sympathy from prosecutors
- Permissive exclusion Authority–
  - Directors excluded from Medicare if they”knew or should have known”
  - Even higher standard for BOD members—without any direct or indirect knowledge
  - BOD should trust management’s reports and input but question as they see fit and when things come up.
- BOD should support management’s efforts to make compliance program “state of the art”
HCCA—Compliance Officer’s Role in Board Oversight of Compliance Program
- CO should report directly to the CEO and BOD
- CO should be high in the management structure to reflect organization’s commitment to compliance
- Education of BOD members should be provided regularly
- There should be an active BOD or subcommittee scrutiny of issues, minutes, reports.
Roach—Board of Directors’ Role in Compliance and Ethics
- Federal “Organizational Sentencing Guidelines” revised and strengthened
  - BOD plays pivotal role in compliance
  - Should be knowledgeable about the content and organization of the compliance program
  - BOD should exercise reasonable oversight with respect to implementation and effectiveness of the compliance program.
- BOD should request information about risk assessment process
- Read the newspaper and ask questions about items they read/hear
- Align incentives for expenditures, compensation, review with compliance goals
- Encourage transparency in deliberations and compliance updates
- Initiate relevant, regular, and substantive compliance reports to the BOD
Governance Institute—Government Targets Healthcare Officers Directly
- Individual liability is a looming and realistic possibility for hospital executives and leadership
- BOD members held responsible regardless of direct involvement
Governance Institute—Guide to BOD Oversight Duties
- Compliance as part of fiduciary duty is “hot, hot, hot topic”
- Expectations of BOD members increasing
- Caremark decision has changed landscape for BOD members—more responsibility
- BOD members must make “reasonable inquiry” when confronted with extraordinary facts or circumstances.
- Recommended compliance structure of multi-hospital systems is what HHSC currently has. Regional Boards should also be active in compliance for their regions.
- Recognize the dramatic regulatory focus on quality and patient care that is occurring
- BOD members must be prepared to have “titanium spine”—be tough, consistent, follow through, and follow-up.

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