By Susan Walberg, JD MPA CHC

As Private Equity companies and healthcare organizations move to grow or consolidate practices and organizations, one area of due diligence that is often overlooked is the evaluation of the compliance program and the compliance risks that are the natural result of a deficient program.

In June of this year, 2020, the Department of Justice (DOJ) has issued an updated ‘Evaluation of Corporate Compliance Programs’ document which outlines how the government prosecutors should determine the effectiveness of a compliance program. This evaluation is part of a government’s sentencing decision-making, in the event of an offense by a healthcare organization. This determination serves to impact the potential resolution of a prosecution, fines and penalties, or other consequences. In other words, organizations that adequately address these issues are less likely to find themselves penalized in the event of a compliance ‘incident’.

Department of Justice guidance is a useful roadmap for compliance professionals, leaders, and investors who are committed to reducing the risk in their organization. The recent guidance includes a number of focus areas, some new:

1. Is the corporation’s compliance program well designed?

In addition to the traditional expectation of policies and procedures, the updated guidance discusses at length the Risk Assessment process.  The Risk Assessment, according to the DOJ, should guide the compliance program and be tailored to address and assess the ‘risk of criminal conduct and shall take appropriate steps to design, implement, or modify each requirement (of the compliance program) to reduce the risk of criminal conduct.’

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