How new sentencing guideline amendments

will impact health care senior management

Directors and high-level personnel shall be required to establish, exercise reasonable oversight and take an active leadership role for the content and operation of compliance and ethics programs.

Such governing authority will be responsible for (i) identifying and assessing areas of risk, (ii) training high-level officials (on an ongoing basis), and (iii) providing compliance officers with sufficient authority to carry out their responsibilities.

Specific individual(s) within the organization shall be assigned day-to-day operational responsibility for the compliance and ethics program and be given adequate resources to carry out the associated duties, with high-level personnel assigned ultimate responsibility for the programs effectiveness.

Small organizations (fewer than 200 employees) shall demonstrate the same degree of commitment to ethical conduct and compliance with the law as large organizations, albeit with less formality and fewer resources than would be expected of large organizations, and will be eligible for compliance program credit.

The organization will be precluded from mitigation of its sentence if it fails to self-report criminal misconduct in a timely manner and if management-level officials tolerated or were involved in illegal activities.

Failure to adhere to industry regulations and standards weighs against an organizations eligibility for compliance credit under the guidelines.

Although the failure to prevent or detect the instant offense will not necessarily mean that the program is not generally effective in preventing and detecting criminal conduct, recurrence of similar misconduct creates the rebuttable presumption that the organization failed to take reasonable steps to meet the requirements of the guidelines.

The guidelines mandate large fines for organizations that have ineffective programs to prevent and detect criminal conduct.


Reproduced from National Underwriter Edition, November 11, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.