Compliance at the Strategy Table

3/18/2014

1

Deann M. Baker, CHC, CCEP, CHRC Sutter Care at Home Compliance Officer, Sutter Health

Dwight Claustre, CHC-F, CHRCDirector, Aegis Compliance and Ethics Center, LLP

Deborah Smith, PHD,MBB,MCACOO Administrator Zwiebel Center

Compliance at the Strategy Table

2014 HCCA Compliance Institute1

Discussion Topics

Strategy and planning methods.

Alignment of compliance with corporate goals and metrics.

Methods to weave compliance into the fabric of the organization to impact culture and create sustainable results.

Building trust and partnerships through collaboration.


3/18/2014

2

Why Does it Matter? It’s important we are all working from the same plan or we

will have communication challenges.

Compliance Leadership present during strategic planning mitigates risks to the organization including potential rework.

Strategic goals and initiatives need to align with regulations, accreditation standards, and other requirements.

Establishing an alliance between corporate strategy and compliance ensures sustainable results.


Audience Poll

Roles in the audience?

CEOs, CFOs, CIOs, CMOs, CNOs, COOs, CQOs ?

Department Directors/Managers? Nursing& Physician? Chief Strategy Officer or Strategy Dept.? Consultants?


3/18/2014

3

Quote

“Even small Healthcare Institutions are complex, barely manageable places…Large Healthcare Institutions may be the most complex organizations in Human History.”

“What you can measure you can manage.”

2014 HCCA Compliance Institute

Peter Drucker

5

Transitioning from Today to Tomorrow

Reimbursement

Venue

Records

Treatment

Volume based

Hospital based

Paper

One size fits all

Performance based

Integrated, Outpatient, Community

Electronic

Personalized, Population Health

1990 2000 2012 2020

Service Local Reporting National Reporting

Combating Illness Improving WellnessHealthcare

Directors of Care Collaborators of CareProviders


3/18/2014

4

Assumption

The main thing that is controlling the rate at which a company grows, and it’s strength and stability, is how much attention Executives can put on:

1. The quality of the decisions they make2. The speed they can respond to issues inside and outside of the company

The current state of any hospital is an effect of the decisions of human beings.


Question for Your Executives

Have you asked your Executives how many things they are working on?

Question #1: How many initiatives has your Executive Team been ask to complete over the last 1-3 years?

Answer: The actual answer is 10-100-1000.

Question #2: How many of the initiatives produced results and impacted the bottom line?

Answer: Rarely did anyone answer more than 1% of the initiatives actually produced true results. It was most common to hear the enthusiastically answer of “Almost all were to complex and still being worked on.”


3/18/2014

5

Executive StrugglesAt the same time, I have to ensure profits by managing my costs. I can’t hire more people so I must limit my initiatives.

Manage CostLimit/Reduce

Initiatives


Executive Struggle

Improving ResultsAdd MoreInitiatives

Manage CostLimit/Reduce

Initiatives

Provide World Class Service

Executives think: “I’m paid to ensure the Hospital thrives, but I’m in a bind because I can’t do both!!”


3/18/2014

6

We Build It By Starting With a Blue Print….A Plan


Strategy Terminology

MISSIONWhy we exist

VALUESWhat we believe in and how we will behave

VISIONWhat we want to be

STRATEGYWhat our competitive game plan will be

BALANCED SCORECARDHow we will monitor and implement that plan

The BASIC ELEMENTS of Strategy

OBJECTIVE = How / ends

MESAURE= item tracked to determine achievement

TARGET = desired level of performance

INITIATIVE = funded activities and plans for achieving objectives


3/18/2014

7

Process Deliverables

• Facilitation of Planning Session…Translation of vision to prioritized requirements

• Current State Assessment Operational Clinical- Service Line Market Master Planning

• Presentation of Key Findings / Gap Analysis from Session

• Facilitation of Action after Session…Translate strategy to action

• Facilitation of Strategic Partnering Session…Critical Success Factors / Action Steps

Translate Vision To Strategy

Translate Vision To Strategy

Discuss Future State Vision

Discuss Future State Vision

Translate Strategy to Delivery

Requirements

Translate Strategy to Delivery

Requirements

Assess Current State CapabilityAssess Current State Capability

Gap Analysis & Action Plan

Gap Analysis & Action Plan

Strategic Partner Relationship

Strategic Partner Relationship

Strategic Planning Session


The Right “Intelligence” ToolsSuccessful strategy implementation depends on:

Market Intelligence (MI) = Market Share: Demographics, Disease, Population, Census, Spend

Business Intelligence (BI)= Analytics, Monitoring, Reporting

Strategic Intelligence (SI) = Planning, Schedule, Execution

Performance Intelligence (PI) =Gap Analysis, VSA, Constraint Analysis, Waste, Defects, Errors


3/18/2014

8

Planning Process Schedule-Are you Connected?

EnvironmentalAssessment

GrowthAssessment

FinalizeAssessments

TechnologyAssessment

ClinicalAssessment

ExecutiveRetreat

BoardRetreat

LeadershipMeetings

CascadingEvents

Q1Reports

Q2Reports

Q3Reports

Q4Reports

Monthly Meetings to Celebrate Green, Review Yellow and Fix Red

Annual Report for Board and Community2014 HCCA Compliance Institute15

Strategy Introductions Strategic Planning is designed to provide the outline and

initiative of gathering the necessary information to develop a Strategic Plan for Your Company. It is to be the stimulus for the development of your company's actual Strategic Plan.

“Any plan is only as good as the effort and commitment that is put into it.”


3/18/2014

9

Functions Strategic planning is the method that determines what things need to be

done. It provides the goals and objectives of business.

Without strategic planning your company is operating without clear purpose and direction.

Strategic Planning and goal setting are essential parts of every business. A plan of action must be established with definite goals and objectives so that the work effort and resources are directed in a controlled and coordinated manner.


Functions A good Strategic Plan establishes goals and objectives that can

be achieved. Good Leaders direct their personnel. They make decisions and changes as required keeping the business progressing

toward its present goals and objectives.

Without a plan, a business tends to run on historical experience or on a crisis management basis. Leaders reach in different directions due to lack of clear common goals.

This creates confusion, inefficiency, excessive costs and reduction of profits. The lack of a plan also limits growth. Efforts are based on day-by-day

situations without planning for growth.


3/18/2014

10

Basic Process The first part of the process is to develop an accurate assessment of the

company and the people involved. This involves the gathering of information from within Your Company and

some evaluation of the skill and ability of its personnel. The purpose of this is to examine where the company is now. What is its condition? What assets are available? What are its weak points (internally)?

The second part of the process involves an examination of factors outside the company. These are things that can affect the success of the plan and are not under the control of the company. What about government regulations? What about new technology, and the new product lines they generate?

These questions need to be answered along with others that are related to the proposed plan.


The Strategy Process

MISSION

STRATEGY•Board expectations•Environmental assessment•Market analysis•Trends / regulations•Facts / assumptions•Stakeholder buy-in

VALUES

Business Intelligence•Performance management•Strategy execution and management•Focus & alignment with strategy•Strategic feedback and learning

BUDGETS•System & Division Operational Budgets •Capital Budgets (equipment & facilities) – New Business & Replacement/maintenance•Strategic Initiative Budgets

BUSINESS PLANS•Environmental drivers•Resource requirements•Cost / Benefit analysis•Key priorities•Measures, Targets & Action Plans

ObjectivesMeasuresTargets

Continuous Process

STATIC1-3 YEARS

ANNUAL

VISION\

STRATEGIC INITIATIVES

•BSC performance drivers•Time-bound•Requires resources•Actions that provide focus & alignment with strategy

20

3/18/2014

11

Outline for Strategic Planning Mission Statement narrowly defines its purpose and should be

considered a guidepost. It is the company's reason for existing and carefully defines the business.

Strategies are specific methods that will be used to accomplish the goals. Strategies are the "HOW" in the plan.

Action Steps are the step by step plan of how to accomplish the stated goals. It assigns the necessary assets, authority, and responsibility along with a timetable including completion and reporting dates.


Long Range Goals are usually done for a period of 3 or 5 years. Management must ask itself the following: Where do we want to be in the long range as we have defined it? What profit levels can we reasonably expect to achieve? What resources do we need to achieve the stated goals? At what time periods will we need the resources? How will we finance the plan? What will the capital requirement be? What are our profit goals and profit strategies?

Outline for Strategic Planning


3/18/2014

12

Market Forces are carefully analyzed to determine and categorize those factors that will generate demand for the company's services now and in the future.

This is market segmentation and is useful because it may: Uncover previously overlooked markets. Be helpful in deciding where to concentrate the company's increased sales

efforts. Identify specific new target markets.

After identifying the market segments, a decision should be made to target some of the segments. Using a "What If?" scenario, determine the effects of potential decline, increase, etc., and what the company must do to meet its goals in these market segments.



Market Potential is reviewed across Markets available to determine how Your Company can effectively service them with its existing capacity.

• After determining the market objectives for each of the three years of the plans, plans must be formulated for the Personnel, Facilities, and Financial Requirements to support the projected growth.

• Labor: Do we have the personnel available to support the growth, or will we have to increase staff? If we increase, from where will they come? Are our compensation programs competitive? What will the training needs be?

•



3/18/2014

13

• Facilities: Do we have the equipment and space to support the volume forecast? What replacements will be required? What new or expanded facilities will be required?

Financial: What are the three-year cash requirements necessary to support the projected growth? Will major capital expenditures be required? Will long-term borrowing be required? Is it available? At what costs? How will cost of living factors affect our costs? Do we have administrative personnel and facilities to support the volume figures? Where do we acquire them? At what cost?

Strategy and Tactics: Formalize your strategy and tactics. Strategy comprises the long-range objectives to be achieved in the long-range plan. Tactics are measures taken to reach short-term goals.



Financial, People, Equipment, Facilities

Finances: What are our Revenue Goals What is our Revenue Strategy Projected increases from an inflationary and partially from expanding

the customer base and new types of business

People: Executives, Leaders, Supervisors, Employees

Equipment and facilities improvement costs required for the next several years for improvements.

Source of funds

Profit strategy


3/18/2014

14

Competition Awareness is as important as knowing your company. Know your competitor's strengths and weaknesses,

Market Share, Geographic coverage, etc. A "Competitor's Library" is a useful base. Additional

information can be obtained through Trade Associations, Chambers of Commerce, Trade Journals, Dunn & Bradstreet Reports, and other Compiled Business Analysis.



Strategy Prioritization MatrixCriteria: At multiple times throughout the strategy life cycleconsideration will be given and assessed for impact, level of difficulty, risk and prioritized accordingly

Levelof

Impact

Degreeof

Risk/Difficulty

High Impact, Low Risk/Difficulty

Low Impact, High Risk/Difficulty

Low Impact, Low Risk/Difficulty

High Impact, High Risk/Difficulty

Low

High

High


3/18/2014

15

When the basic analysis both inside and outside the company has been completed and all relevant factors considered it will be time to put the plan in writing.

The following steps should be taken: Write a detailed plan

Assign a plan administrator.

Prepare a master calendar with deadlines

Assign assets, authority, and responsibility

Review, Evaluate, take corrective action or change as determined by events.

Monitor with reports and meetings as necessary

IMPLEMENTATION, MEASUREMENT, FOLLOW-UP


Failure to achieve a specific goal or action step requires a review of the plan. Learn from your efforts and make corrections that will improve your planning process. The goal may have been wrong Poor effort or execution Wrong timing Conditions may have changed Wrong strategy Inadequate assets

IMPLEMENTATION, MEASUREMENT, FOLLOW-UP


3/18/2014

16

Development of Goals and Objectives What business are we in?

What business do we want to be in?

What services do we currently offer?

Why do our customers use us?

What are we doing right?

What are our strengths?

As I see them? As our customer sees them? As our competitor sees them?

What is our target market?


What is our market share?

Who and/or what is our competition? List the strengths and weaknesses of the top three.

Did we grow in the past year? What factors contributed to the growth (or lack of growth?)

What portion of our business for each type of service provided produce?

What portion of our profit is produced by any of these services?

Which expenses have increased as a percent of sales over the last three years?

Which expenses have decreased as a percentage of sales over the last three years?

Development of Goals and Objectives


3/18/2014

17

Site 2

Divisions Goals Strategies Initiatives Metrics/Goals

Communication

Finance

People

Growth

Community

QualityEvidence Based

Medicine

Increase Corporate

Responsibility

Improve Operating Efficiency

Invest in Our People

Build Strategy around

Regions

Develop System

Awareness

Build Partnerships

Case Mgmt Model

EMR

Physician Alignment

Mission

Process Improvement

Cost Containment

Staffing Excellence

Satisfaction

Leadership Development

Care Coordination

System Awareness

Report Never Events

CMS indicators

Metric Tracking

MortalityProcess Improvement

Physician Sat

IP Sat

ED Patient Sat

Physician Sat

FTE/AOB

EBITDA

Capital

Annual Turnover

Associate Sat

IP Market Share

Adjusted Admissions

New Business

Community Commitment

VP/Exec Involvement

Palliative Care

Community Participation

OP Market Share

Interdepartmental Sat

Day in AR

DNFB

Billing Accuracy

Vacancy

90 Day Turnover

OP Sat

Corporate

Site 3

Site 4

Site 1

Critical Alignment for Monitoring

33

Compliance Involved in Design & Validation of Strategy

34

3/18/2014

18

Summary

A well-developed, three-year plan will take a lot of effort and commitment to develop.

Planning and setting goals is the first function of a company. Whether documented or not, there must be a purpose to be accomplished by the business.

Naturally, the first goal of any company is to survive, the second is to grow.


Strategy: “a carefully devised plan of action to achieve a goal, or the art of developing or carrying out such a plan”

Weaving Compliance Into The Fabric of Your Organization Through Strategy


3/18/2014

19

The Executives and Compliance Officers are a Team


Compliance Alliance With Strategy

Costs that come with crisis, choices, and chances.

Is the compliance program aligned with the organization strategy?


3/18/2014

20

Demonstrating Our Value

Risks to fulfilling the organizations mission: Departments

Processes

People

Roles and…

Rules


Demonstrating Our Value

• Organizations are required to comply with certain rules when they participate.

• Is your organization considering the risks?

• How is that done?

• New line of business? Did they include compliance at the table?

• Are they walking a fine line?


3/18/2014

21

Leadership needs to prepare for STORMSHealthcare Storm is coming!!! Take Cover! Strategy has to be Flexible!Typical operating and regulatory challenges are concerning Executives

Revenues & InvestmentIncomes Decline

Operating CostIncreasing

PerformancePublicallyReported

Labor Cost & Shortages

Access toCare limited

Rising CostOf Capital

Aging Population

Rising Technology & Supply Cost

CMS predicts 15% HospitalsClosed by 2014


Compliance Conditions Met Through An Organizational Plan


3/18/2014

22

Compliance Resources “we can build it”

Standards that support the compliance cause: Federal Sentencing Guidelines (FSG) OIG Work Plans (OIG) Compliance Program Guidance (CPG) Corporate Integrity Agreements (CIA) Conditions of Participation (CoP) Patient Protection and Affordable Care Act (PPACA) More…


High Level Oversight(Compliance Officer Role &

Compliance Committee)& Governance

(Board of Directors)

Create Fair & Ethical Culture

(Incentives for Performance “Create a Do The Right Thing” Tone )

Open Lines of Communications

(Confidential Message Line , Surveys and Exit Interviews)

Education/Training (Role. Values &

Risk/Regulatory Based)

Detection, Remediation & Enforcement

(Timely response to misconduct, Screening, Sanctions and Corrective Action Plans)

Risk Assessment (Large Scale Evaluation and Prioritization of Risks and Identification of Mitigation

Strategies )

Auditing &Monitoring (Ongoing Testing of

Controls to Address Risk)

Assessment of Effectiveness

(Compliance Program Evaluation)

Compliance elements in place

Leadership commitment to

participate

An effective compliance program

Elements of An Effective Compliance Program

Establish Standards (Develop and Disseminate

Policies & Standards of Business Conduct)


3/18/2014

23

Our Landscape Organizational Plan

(to live up to the “Code” & fulfill and protect the mission)

Strategy: How to influence workforce to meet the mission, vision, goals

Risk: Regulations, laws, accreditation and organizations policies.

Resources: Internal expertise, external needs, costs & allocation

Accountability: Metrics, evaluation, reporting, and incentivizing completion and create just culture.


Risk Assessment

Risk assessed through discussion, interviews and evaluation and the areas to consider when establishing a plan: Risk impact Risk likelihood Internal controls Internal trends External trends Corrective Action Plans

Risk Assessment defines the compliance annual work plan

How can that help with working with our partners and align with strategy?


3/18/2014

24

Controls Environment

• A process affected by an organizations board of directors, management, and other individuals, designed to provide reasonable assurance regarding the achievement of the objectives.

• It must be part of the strategy to develop a plan that will last the storms.

Risk Assessment & prioritization help identify how to reach objectives



• Preventative

• Directive

• Detective


3/18/2014

25


Hard Controls

•Formal

•Objective

•Measurable

•Documented “plan”

Soft Controls

•Informal

•Subjective

•Subtle

•The environment

The Federal Register Compliance Program Guidance from the OIG address the internal controls environment


Departments + Processes + Requirements = Risks to the Organization’s Mission

• Departments:• Human Resources• Contracting & Procurement• Medical Staff Office• Risk Management• Legal Department • Quality • Information Technology

• Processes:• On-boarding & Exiting• Exclusions Screening• Payments/Agreements• Licensing• Credentialing/Privileging• New Technology• New Services• Regulatory Changes


3/18/2014

26

Accountability.. ..through compliance metrics and defined responsibilities

and alignment with the organization’s strategy and our “compliance map”.


Data Analysis Cycle• Compliance goals include:

• Identification of measures• Collection• Evaluation• Learning• Improving• Monitoring• Reporting• Rewarding (incentivize)


3/18/2014

27

Incentives


• FSG = (6) The organization's compliance and ethics program shall be promoted and enforced consistently throughout the organization through (A) appropriate incentives to perform in accordance with the compliance and ethics program;

53

Compliance Metrics & Evaluation

Discuss handout documents and next slides


3/18/2014

28

Human Resources People Goals = hiring and maintaining qualified workforce maintaining a satisfied workforce

Risk area = excluded individuals or criminal history consistent sanctions

Compliance strategy = Monitoring activities

FSG = The organization shall use reasonable efforts not to include within the substantial authority personnel of the organization any individual whom the organization knew, or should have known through the exercise of due diligence, has engaged in illegal activities or other conduct inconsistent with an effective compliance and ethics program.


Human Resources People Strategy and Goal = Create an ethical (Just) culture and behavior standards

Risk = Inconsistent discipline and unreported issues (fear of retaliation)

Compliance Strategy = Monitor disciplinary actions and exit surveys

FSG = (b) Due diligence and the promotion of an organizational culture that encourages ethical conduct and a commitment to compliance with the law within the meaning of subsection (a) minimally require the following:


3/18/2014

29

Supporting a Just and Fair Culture(its not just about the data & plan)

● Commit to establish and maintain an environment that is respectful, fair and just for all (patients, families, staff and providers) when looking at outcomes.

● A just and fair culture looks at system opportunities and supports the patients, families, staff and providers through a process to evaluate why an error occurred.

●Resource: Dr. Lucian Leape Professor, Harvard School of Public Health Testimony before Congress on Health Care Quality Improvement http://www.health.ny.gov/professionals/patients/patient_safety/conference/2007/docs/patient_safety_and_the_just_culture.pdf - Also “The Just Culture Organization” link is available on the resource page.


Quality – Clinical Standards Strategy: Evidence based Medicine= Meet quality standards established through CoP

Risk to achieving the goal= CMS quality outcomes and timely reports, HACs, and other

Compliance strategy = Audit the monitor and report activities of requirements

CPGs & CIAs address quality: FR Compliance Programs Guidance in section A. “Benefits of a Compliance Program” – “The OIG believes a comprehensive compliance program provides a mechanism that brings the public and private sectors together to reach mutual goals of reducing fraud and abuse, enhancing operational functions, improving the quality of health care services….”


3/18/2014

30

Contracts & Procurement Financial goals = Meet a specific financial outcome, improved process or

efficiencies

Risk to achieving the goal= Stark, Anti-kickback, Exclusions, DRA….

Compliance strategy = Monitor contracts, payments, procurement…

FSG = The organization shall take reasonable steps— (A) to ensure that the organization's compliance and ethics

program is followed, including monitoring and auditing to detect criminal conduct;


Development and Education People strategy and goal = Maintain a qualified workforce

Risk to achieving the goal = Workforce knowledge to maintain skills and qualifications

Compliance strategy = Monitor and report workforce participation

FSG = The organization shall take reasonable steps to communicate periodically and in a practical manner its standards and procedures, and other aspects of the compliance and ethics program, to the individuals referred to in subparagraph (B) by conducting effective training programs and otherwise disseminating information appropriate to such individuals' respective roles and responsibilities.


3/18/2014

31

A Seat At The Table

Is to have a voice and opportunity to participate in discussions regarding corporate business strategy and therefore have influence.


The Challenges We Encounter

Bullying can be an occasional issue we encounter.

Corporate/Institutional bullying is when it is entrenched in an organization and becomes accepted as part of the workplace culture.

Corporate bullying can be blame without factual justification, unfounded criticism, or being treated different than the rest of your peer group.


3/18/2014

32

The Challenges We Encounter

Competition: Means to compete for something; engage in a contest; measure oneself against others.

Competition: conflict is seen as a contest with a winner and a loser.

Competition often creates conflict a natural “fight or flight” phenomenon.


Emotional Intelligence?

Pause

Perspective

Prepare

Present


Self Awareness

Self Management

Social Awareness

Relationship Management

64

3/18/2014

33

Communication Is Key Compliance Today’s Exhale by Shawn DeGroot

“In the compliance field we are blessed (or cursed, depending on personal perspective) with delivering messages to a variety of audiences. We listen, educate, investigate, question, ponder and respond. We routinely digest regulatory information in preparation for the next question during and investigation or to provide training to an audience. Our verbal messages can be succinct and clear, yet misinterpreted if incongruence exists with our body language.”


Communication Strategy Negotiate

Cooperate

Challenge assumptions

Provide accurate and honest information

Develop and use your emotional intelligence skills

Its’ ok to …..


Cooperation: the conflict is seen as a joint problem to solve.

66

3/18/2014

34

Communication


It Can Feel Like This

Compliance Professionals can help change the perspective.

It’s not just about what is legal but the risk environment and appetite of the organization.

Its not about saying NO, it’s about helping evaluate HOW.

Management is being told (even by regulators) to be innovativebut sometimes the regulationscreate red tape.


3/18/2014

35

Our Code of Ethics Keep our role in perspective.

We can’t mange people or business operations but we can manage ourselves through the circumstances we encounter.


Effect : Sustainable Results


TogetherEveryoneAccomplishes More

70

3/18/2014

36

A Few Resources “Leadership: The Power of Emotional Intelligence” by Daniel

Coleman

“Results that Last” by Quint Studer

“Straight A Leadership” by Quint Studer

“Crucial Conversations” by Kerry Patterson

TheJust Culture Organization www.justcutlure.org;

HCCA & SCCE publications and resources: Compliance Professional Manual, Compliance Today, Surveys,

Videos, Books and more

Linked-In Groups and conversations


Compliance at the Strategy Table

Documents

Transcript of Compliance at the Strategy Table