In the Corporate Integrity Agreement (CIA) entered into by Olympus Corporation of the Americas, the Office of Inspector General (OIG) included a twist with respect to the training required to be provided to the company's Board of Directors. The CIA states:
The training shall address the unique responsibilities of health care industry Board members, including the risks, oversight areas, and strategic approaches to conducting oversight of a health care entity. This training may be conducted by an outside compliance expert hired by the Board and should include a discussion of the OIG's guidance on Board member responsibilities.
Olympus Corporation of the Americas CIA, at § III.C.2. While not unique – the same language also appears in the 2015 CIA with Millennium Health, LLC – this provision may signal a broader concern by the OIG that the Boards of healthcare companies are not sufficiently informed on the scope of their roles in overseeing the operation and effectiveness of a company compliance program.
In its 2015 Practical Guidance for Health Care Governing Boards on Compliance Oversight, the OIG spelled out its expectations for the role of the Board in overseeing a company's compliance program. Central to that role is the Board's responsibility to stay informed on compliance matters. The OIG stated:
A Board can raise its level of substantive expertise with respect to regulatory and compliance matters by adding to the Board, or periodically consulting with, an experienced regulatory, compliance, or legal professional. The presence of a professional with health care compliance expertise on the Board sends a strong message about the organization's commitment to compliance, provides a valuable resource to other Board members, and helps the Board better fulfill its oversight obligations.
The OIG's Practical Guidance went on to state that it "sometimes requires entities under a CIA to retain an expert in compliance or governance issues to assist the Board in fulfilling its responsibilities under the CIA."
Over the past several years, the OIG has used its CIAs with life sciences companies to evolve – albeit in a somewhat piecemeal approach – the role of the Board of Directors in overseeing the development and implementation of a compliance program. I detailed the OIG's changing expectations in an article entitled The Evolution of Board Responsibility for Compliance Program Oversight.
Apart from the language noted above relating to Board training, the Olympus CIA includes Board requirements typical of previous CIAs, including a provision requiring that the Olympus Board adopt a resolution concluding that the company has implemented an effective compliance program.
The Olympus CIA also requires that the Board submit to the OIG a description of any materials that it reviewed or other steps that it took to support its conclusion regarding the effectiveness of the company's compliance program. Those other steps could include the engagement of an independent compliance expert but the Olympus CIA – unlike certain other CIAs – does not require that the Olympus Board engage an independent compliance expert to evaluate the effectiveness of the company's compliance program.
In addition to the CIA, Olympus entered into a three-year Deferred Prosecution Agreement (DPA) and agreed to pay $623.2 million to settle criminal charges and civil claims that it paid kickbacks to physicians and hospitals in violation of the Anti-Kickback Statute. The CIA and DPA both require that Olympus engage an independent monitor to evaluate its compliance with the terms of the agreements. Perhaps if Olympus – or more importantly the company's Board – had invested in independent compliance expertise before the fact, it could have avoided the cost of the enforcement action.
About the Author:
Brian Dahl, the Principal at Dahl Compliance Consulting LLC, focuses his practice on assisting life sciences companies and their Boards manage risk, including by developing, implementing, and evaluating the effectiveness of their Corporate Compliance Programs. He previously served in senior compliance roles for Teva and Takeda.