A compliance program is an internal system or process composed of a set of rules, regulations, and guidelines created to enable life sciences to maintain legal, ethical, and professional operational standards while reducing the risk of breaching rules and regulations within the industry by following the laws issued by the Health & Human Services (HHS) and Office of Inspector General (OIG).
The departments mentioned above have also created educational materials to assist compliance leaders in understanding the rules and regulations.
Below are some of the critical elements that a compliance policy includes, followed by the five HHS laws that are critical to life sciences companies:
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Effective compliance education and training programs for all employees.
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Development and distribution of a written code of conduct along with documented policies and procedures that promote an organization’s adherence to compliance.
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The designation of a chief compliance officer and a corporate compliance department is responsible for ensuring effective compliance.
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The CCO and compliance department should report directly to the CEO and the government body.
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An efficient process of receiving complaints and disputes while protecting informers’ anonymity and whistleblowers from retaliation.
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A system to respond to improper/fraudulent/illegal activities along with a remediation tactic that enforces disciplinary action against violators of U.S federal or state laws.
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Compliance monitoring and audits are conducted to reduce the time it takes to identify internal challenges and risks.
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Policies to deal with terminated or disciplined employees and a process of investigation and remediation of systemic challenges.
1. Anti-Kickback Law
Anti-Kickback Act (AKBS) was passed in 1972 as a remediation tactic against international abuse of the healthcare system for financial gains.
The federal Anti-Kickback Statute prohibits the exchange of anything of value to induce the referral of a business reimbursable by a federal healthcare program.
Receiving financial incentives for referrals, free or very low rental office, or excessive compensation for medical directorship are some aspects prohibited by the Anti-kickback law.
The main objective is to minimize the corruption of medical decision-making, driving patients away from valid treatments and other related activities within the life sciences industry.
Fines up to $25,000, five years in jail, and exclusion from the Medicare and Medicaid care program are some consequences organizations have faced for not complying with the Anti-kickback law.
Some of the recent violations of the Anti-Kickback statute resulted in the following penalties:
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SN Medical Inc., Pays $785,672.14 For Violating the False Claims Act.
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Novartis Pays Over $642 Million to Settle Allegations of Improper Payments to Patients and Physicians
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Texas Heart Hospital and Wholly-Owned Subsidiary THHBP Management Company LLC to Pay $48 Million to Settle False Claims Act Allegations Related to Alleged Kickbacks
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West Virginia Hospital Agrees to Pay $50 Million To Settle Allegations Concerning Improper Compensation to Referring Physicians
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Lower Mound Hospital to Pay $18.2 Million to Settle Federal and State False Claims Act Allegations Arising from Improper Inducements to Referring Physicians
2. HIPAA
Health Insurance Portability and Accountability Act (HIPAA) was initially passed in 1996 to protect healthcare workers between jobs.
However, after years of iterations, the HIPAA law we have today generally aims to protect the confidentiality of patients’ information.
According to HIPAA, Civil and criminal penalties are imposed on life sciences for violating a patient’s healthcare information.
In addition, the law also outlines how life sciences organizations and medical professionals can store, utilize and disseminate patients’ information.
3. The Sunshine Act
Also referred to as the Open Payment Program, the Sunshine Act is a part of PPACA or the Patient Protection and Affordable Care Act.
This law entails the importance of maintaining transparency by disclosing financial relationships between HCPs and drug and device manufacturers.
The enactment of the Sunshine Act resulted in the creation of a government-operated website called “Open Payments.” The transparency reports prepared by drug and device manufacturers detailing payments made to HCP and HCO were to be made public through this website once submitted to the CMS.
4. The HITECH Act
Made obligatory in 2009, the Health Information Technology for Economic and Clinical Health Act (HITECH), often referred to as the teeth of HIPAA, is another primary law that CCOs and HCOs are well aware of.
The law is designed to direct audits toward HIPAA compliance, ensuring that the security and privacy standards comply with HIPAA compliance regulations.
Moreover, the Act sets high standards of patient healthcare security and privacy in the healthcare sector, followed by providing monetary penalties for healthcare manufacturers and associated businesses to enforce this law’s amendment.
5. Fraud and Abuse Laws
Fraud and Abuse laws were designed to prohibit fraudulent and abusive activities in the life science industry. This law prohibits the issuing of fraudulent bills to insurance companies or government insurance providers.
In addition, the law advises drug and device manufacturers not to use unnecessary procedures or medications to generate revenue or get a kickback from a distributor.
Compliance Monitoring Solution: The Way Forward for Life Sciences
Compliance monitoring allows you to capture data that can be used to enhance the effectiveness of your compliance program and identify compliance issues and deploy remediation tactics early on.
This process is key to ensuring that your company complies with all the life sciences compliance laws mentioned above and others that are not on this list.
In addition to monitoring, compliance teams can leverage analytics by accessing historical data that comes intact with a few compliance monitoring solutions.
Analytical capabilities would allow compliance teams to understand spending trends and high risks, identify challenges early on and deploy remediation tactics to minimize penalties, damaged reputation, erosion of trust, etc.
Click here to schedule a meeting and see how qordata can help you with compliance monitoring.
