DOJ Updates Compliance Program Guidance

On September 23, 2024, the Criminal Division of the United States Department of Justice (DOJ) updated its principles for pursuing and settling federal prosecutions of business organizations. Specifically, the updated guidance addresses how the DOJ evaluates and considers corporate compliance programs when determining both whether to bring criminal charges involving corporate misconduct, as well as how effective compliance programs impact possible plea deals and settlement agreements. The DOJ’s Criminal Division guidance, along with the regulations and guidance issued by the Office of the Inspector General for the Department of Health and Human Services, have long been important compliance program resources for health care providers that serve individuals enrolled in governmental programs, such as Medicare and Medicaid. In speaking to the 23rd Annual Society of Corporate Compliance and Ethics Institute, Principal Deputy Assistant Attorney General Nicole M. Argentieri described new focus areas that have been added to DOJ’s compliance guidance.
Artificial Intelligence
As announced in March 2023 by Deputy Attorney General Lisa Monaco, DOJ will consider how companies mitigate the risk of using “disruptive technologies”, such as artificial intelligence, in their businesses and compliance programs. DOJ will look for evidence that businesses (i) conduct risk assessments of any new technologies they adopt; and (ii) implement risk mitigation strategies for any identified problems. It will also look for evidence that businesses monitor and test such risk mitigation strategies and adjust their compliance programs based on the results of such monitoring and testing.
Internal Reporting of Compliance Concerns
The updated DOJ guidance also includes an assessment of whether businesses encourage employees and others to speak up and report suspected misconduct or other compliance concerns, or, alternatively, whether businesses employ practices that discourage such reporting. Related to this concept, DOJ will assess whether and how businesses communicate zero tolerance for retaliation against individuals reporting concerns, including reviewing policies and training related to reporting concerns and nonretaliation.
Access to Data
DOJ will also assess the extent to which the compliance operations of a business are given access to internal data necessary to monitor ongoing compliance efforts generally, as well as to evaluate the effectiveness of such programs. This includes assessing whether or not businesses are putting the same resources and technology into gathering data to support the compliance program as they are for conducting their businesses, more generally.
Incorporating Lessons Learned
Finally, DOJ will evaluate whether or not compliance programs have mechanisms to evaluate and learn from both compliance issues identified internally, as well as those that are reported by similarly situated businesses. This addition suggests DOJ will be looking for compliance operations to monitor reports and settlements of compliance issues identified with other health care providers and incorporate an assessment of those same issues into its own compliance work plan.
Update on Pilot Programs on Compensation Incentives/Clawbacks and Whistleblowers
Principal Deputy Assistant Attorney General Argentieri also reported on the status of new pilot programs aimed at increasing compliant behaviors by corporations and their employees.
In March 2023, DOJ implemented a compensation incentive pilot program through which all DOJ settlements going forward require settlers to assess employees’ support of compliance-related activities as part of incentive compensation decisions. Businesses are required to use clear metrics to both reward compliance-promoting behavior and deter misconduct or the failure to report misconduct (i.e., turning a blind-eye). DOJ reports that this program is showing impressive results. Businesses, including health care providers, should consider including an objective, data-based assessment of pro-compliance behaviors in compensation decision-making. The DOJ program, likewise, encourages businesses to include clawback provisions in compensation arrangements to permit recoupment of bonuses if noncompliant behaviors are identified after the fact. In the words of Principal Deputy AAG Argentieri:
“By holding culpable individuals financially accountable – along with those who were in a position to report or stop the misconduct – companies send a clear message that there will be consequences for those who do not stand against misconduct.”
DOJ also confirmed that businesses that recoup compensation for noncompliant behaviors will be afforded a fine reduction in any subsequent DOJ settlement.
Principal Deputy AAG Argentieri also reported that the recently implemented Corporate Whistleblowers Awards Pilot Program is already showing positive results. This program is available for situations not covered by existing whistleblower programs. While the most prevalent health-care related whistleblower reports occur via the False Claims Act whistleblower program, DOJ identified “…health care schemes involving private insurers…” as one of its four priority areas.
We will continue to watch this topic for further information. Please contact any of the attorneys in our Healthcare Industry Group with any questions you may have.
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