Corporate compliance plan produces many benefits

Contract Language. By Steven M. Harris, AMNews contributor. Nov. 5, 2007.

CONTRACT LANGUAGE

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Recently a client inquired as to whether his practice group could benefit from a corporate compliance plan. He had heard about compliance plans from another physician and was interested in learning how it could help his practice.

A corporate compliance plan is a set of procedures designed to ensure that a health care entity -- such as a physician practice -- complies with laws and regulations governing its activities. It also serves as a mechanism to detect and prevent improper behavior in the workplace.

While every corporate compliance plan will differ based upon the organization, certain elements are constant in every plan.

These elements originate from the federal sentencing guidelines, which set forth sentencing policies and practices for organizations found guilty of engaging in a federal felony or a Class A misdemeanor.

The federal sentencing guidelines adopt the principle that if an organization can exhibit that it has implemented an "effective program to prevent and detect violations of law," then the entity's culpability score will be lessened, thereby reducing the potential fines and penalties that may be imposed on the organization.

To mitigate penalties under the sentencing guidelines, the plan must be "effective." This does not mean that an error cannot occur if the plan is in place, but rather, practices only must make sure that the plan is implemented so that there is an environment for compliance.

This requires that employees are educated on the various requirements, and that the compliance plan is constantly updated and not simply put on a shelf.