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Top Takeaways: New Steps for Compliance: A Closer Look at the DOJ’s Revised Corporate Compliance Program

The US Department of Justice’s (DOJ) revised compliance program document “The Evaluation of Corporate Compliance Programs,” released June 1, 2020, helps organizations understand how DOJ evaluates compliance programs for effectiveness. Below are the the top takeaways from this revision that you should be aware of. For a deeper dive into this revision, listen to our webinar recording.

Three questions the DOJ looks to answer are:
- Is the corporation’s program well designed?
- Is the program being applied earnestly and in good faith? (In other words, is the program adequately resourced and empowered to function effectively?)
- Does the corporation’s program work in practice?
Under the June 2020 updates, the DOJ will increase its focus on evaluating how effectively compliance programs are tailored to the organization’s risk profile, including the company’s size, industry, geographic footprint, regulatory landscape and other factors.
Compliance programs should continuously evolve to pass muster under the DOJ’s updated guidance. Programs are expected to adapt based on review of new data, as well as lessons learned from the company’s own experiences and the experiences of similar companies.
The design of compliance programs will be even more closely scrutinized. The DOJ has added more detailed questions on program design, including, among others, have the policies and procedures been published in a searchable format?; how do employees ask questions during on-line trainings; and does the company take measures to test whether employees are aware of the compliance hotline and feel comfortable using it?
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Addressing Conflicts of Interest: It’s a Whole New Ballgame

In a new Governing Health vidcast, McDermott partner Michael Peregrine breaks down why you may need to revamp your conflicts of interest procedures, and how the general counsel and the compliance officer can work together to protect the health system from conflicts-related risks.

Many health systems’ conflict of interest policies and protocols haven’t been updated since the 1990s. While these approaches—based on duty of loyalty and simple concepts of financial interests—may have fit the bill in the past, today’s rapidly shifting environment poses new governance-related challenges that have direct implications for the process by which conflicts of interest are identified, disclosed and addressed. These challenges include:

Diversification of health system portfolios, featuring investments in a broadening scope of products, services and enterprises, particularly in the case of innovative technology and delivery of care platforms
Growing officer and director interest in investing alongside their health system
Swift consolidation of the inpatient health care provider market and increasing ambiguity in identifying competitors
Sharpening focus on material bias arising from personal relationships (intra-board or external)
Non-traditional market participants, including high-tech market disrupters and powerful new organizations formed by vertical or horizontal combination
State regulators’ attention and reaction to media reports regarding high-profile instances of conflicts of interest
The presence of constituent directors on corporate and joint venture boards
New case law focusing on how personal interests may affect leadership decisions

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