CCO false certification of CIA requirement costs health system steep fine

Less than a year after it settled a false claims case and entered into a corporate integrity agreement, (CIA), Nina Youngstrom, a reporter for the Health Care Compliance Association (HCCA) publication Report on Medicare Compliance, writes that Kalispell Regional Healthcare System (KRHS) in Montana was fined $65,000 because its former compliance officer “falsely certified” about completing one of the CIA requirements.

Faked compliance report

According to an Aug. 28 letter from the HHS Office of Inspector General, the CIA required Kalispell to train its board members 90 days after the settlement’s effective date or by Dec. 23, 2018. However, according to the OIG, “KRHS failed to comply with this requirement for six of its Board members,” and announced the “stipulated penalties.” The penalties were the result of Kalispell’s then-compliance officer sending OIG an implementation report that falsely certified all the health center’s board members had completed board training on time.

The false certification was discovered when Kalispell’s new compliance reported he could not locate supporting documentation requested by the OIG. Deputy branch chief in the OIG’s Administrative and Civil Remedies Branch says that following the exit of his predecessor, the new compliance officer could not find documentation to show that all board members completed training. He reached out to the former compliance officer, who then revealed that not everyone had been trained.

According to Caucci, there was no good explanation of the compliance failure. Rather, she says, she was given to understand that an initial group session ran on one date and no follow-up training ever scheduled for those who could not make that date. As a result, the other board members were not trained by the deadline.

The OIG would have given Kalispell more time

 “CIAs,” she says, “allows providers to submit a timely request for an extension of time to perform any act or file any notification or report required by the CIA. A request is timely if it is filed at least five days prior to the due date of the requirement for which the extension is being requested.”

However, the OIG asserts that “Mr. (Tate) Kreitinger, KRHS’s Compliance Officer at the time of submission of the report, falsely certified to the best of his knowledge that KRHS was in compliance with all of the requirements of the CIA.” And, organizations under CIAs are required to submit implementation reports to the OIG with signed certifications that the information is truthful and accurate.

Kalispell did complete its board training by July 2, 2019. And it has a new compliance officer, Michael Onusko, system compliance officer.

The $65,000 included a penalty for the false certification and the failure to comply with the CIA’s board training requirements. Caucci says that “in this instance, we were most focused on the penalty for false certification. Any breach is serious, but it’s particularly important to make sure everything they certify to was actually done.”

No penalty to the CCO

The OIG’s CIAs only permit stipulated penalties to be imposed against the organization, not on individuals who are employees of the organization. As such, the former compliance officer incurred no personal penalties.

Going forward, Kalispell’s board training requirement will require each member of each respective Board receive at least one hour of training, which shall be repeated during the third year of its CIA agreement. Training will address the corporate governance responsibilities of Board members, and the responsibilities of Board members for review and oversight of Kalispell’s Compliance Program, including the risks, oversight areas, and strategic approaches to conducting oversight of a health care entity. Training may be conducted by an outside compliance expert hired by the Board and should include a discussion of the OIG’s guidance on board member responsibilities.

What about Kalispell’s previous issue?

That involves a false claims settlement stemming from allegations that the healthcare system, which includes HealthCenter Northwest, overpaid physicians and had conflicts of interest. The settlement resolves two whistleblower lawsuits filed in May 2017 and April 2018 by Jon Mohatt, the former CFO of Kalispell Regional Health’s physician network. The Department of Justice (DOJ) consolidated the cases, which alleged that Kalispell lost money on a subset of physicians from fiscal years 2014 to 2016, but more than made up for it with admissions, procedures, surgeries, imaging studies, tests, and other ancillary medical services.

Compliance matters – in training and data protection

Regardless of industry or, in some cases, geography (Healthcare/Financial Services/Insurance – in the US or Canada), no one is immune from oversight and regulatory compliance. Errors happen. Intentional omissions happen. However, a vigilant, well-run compliance system can spot irregularities and give an attentive compliance team a chance to nip exposures before they get out of hand.