Vendor Compliance

The Society of Corporate Compliance and Ethics and the Health Care Compliance Association recently released the results of a survey of compliance and ethics professionals in their database.

Their conclusions:

Despite all the efforts to promote better governance, it does not appear that there is yet a fully developed connection between governance and compliance.

A stint in survey research early in my career makes me question the representativeness of their sample, so let’s think of this as qualitative research that indicates themes and directions and go from there. (And more importantly, ethical behavior isn’t based on percentages. It’s based on a value judgement.) Still their conclusion is meaningful.

Regardless of the organizational behaviors of others, the question to ask yourself is, “How does my organization address its compliance and ethics management? Does my compliance function actually affect the governance decisions?”

Too often compliance is seen in the organization as something to be endured. For example, I worked for the company that went bankrupt from what was (at the time) the world’s largest corporate fraud. In the aftermath, the bankruptcy court decided every employee needed to take ethics training. “Why us?” my colleagues and I grumbled, “We didn’t lie about anything.” The training focused on legal standards and definitions. But it left a gap. The gap was that it didn’t tell us what to do when we found something irregular and how the company would respond.

Take a look at the survey (a free registration is required to see the full results), and think how your organization would answer the questions. In the end, don’t assess yourself by whether you’re company is doing what everyone else is. Whether you’re “average” or “above average.”

Regardless of your organizational structure. Regardless of who reports to whom. Do you have a compliance function that can actually affect behavior? Do your employees know the route to resolution? If you don’t, then you know what you need to work on.

Atlanta Business Chronicle announced the 50 fastest growing companies in the Atlanta metro region this morning at its 2010 Pacesetters event. We’re excited to announce that Vendormate is in the top 20 again.

Thanks to all the hospitals, vendors, and banks we serve for helping us achieve this. We’re committed to continuing to grow by developing more services to support you.

The 2009 trend was that the vendors, who once questioned whether to participate or stonewall vendor credentialing programs, have accepted the new reality.   Certainly, there is still some grumbling.   There are some who spend more time trying to avoid programs than participating.   But for the most part, vendors have settled down.

Vendors will now look for ways to leverage vendor programs to their advantage.  

It will start with universal policy preview and responses.   One of the scariest aspects of healthcare vendor credentialing to vendors is that the sales reps, the feet on the street, will be asked to make corporate level commitments.    Vendor-side legal counsel shudders at the thought.   The impact to Business Associates of HITECH and its new HIPAA breach notification policy is just one example of the type of event that raises red flags.  (We touched on this issue earlier. )    Look for vendors to ask the credentialing outsourcers to provide the ability for management to preview policies before the rep even sees them.   Based on the preview, corporate will dictate how the individual rep responds.

Vendor appointments become a sales management tool.    Hospitals are very interested in when sales reps are on site for a variety of reason, not the least of which is cost control.   Short-staffed hospital materials managers want visibility into sales rep activity to avoid off-contract sales.   

But just as the hospital reviews who visited, the vendor sales management will become interested in tracking where their sales reps have been.    Is the rep visiting the customer regularly?   Calling on the right person?   Getting the appointment records from the vendor management system could serve as a rep activity and efficiency indicator to the sales manager.  

In short, expect a rising number of vendor credentialing admins in 2010.   These admins will be tasked with the same centralized management of vendor credentialing programs as on the healthcare side but on the supplier side.  

Vendormate is already seeing these predictions at work.   Our vendor services team is establishing direct relationships with a number of supplier side credentialing administrators, giving them advance alerts to new hospital programs and changing policies.    The vendor adminitrastor dashboard feature of Vendormate Credential Central lets the administrator download all policies from every Vendormate hospital and healthcare system, verify an individual representative’s credential standing, and view to the credentialing status of all of their sales reps through Vendormate Credential Central.

This is just the begining.    I’m sure creative suppliers, looking for an advantage and a better way to meet their customer’s needs, will think of even more in the coming year.

Continuing with the theme of 2009 in Review, we can’t overlook the ongoing conversation about standards in vendor credentialing and compliance requirements.   Are there standards already?   Are standards coming?    Should there be standards?   

Going into 2009, AORN, ACS, the CDC and others all had existing statements that could be applicable to clinical healthcare reps.    HHS OIG Deficit Reduction Act sanction clearance requirements apply to the vendor company and its principals. 

But the greatest dialogue centered on the healthcare industry rep in the field.   As the tangible face of the vendor credentialing experience, the industry spent the year most concerned about what was appropriate for the HCIR.  

At the March 2009 AORN Congress, eleven industry organizations, representing clinical groups and supplier interests, released joint best practices recommendations for credentialing clinical healthcare industy reps.    It was a start, but it was clearly labeled as limited in scope.   It didn’t encompass the behaviors and requirements of industry reps outside clinical areas (e.g., gift policies and sanction lists), nor did it touch the credentials of the vendor companies(e.g., sanction lists and financial solvency).

The industry craved more clarity, and the discussion about standards frequently revolved around the Joint Commission.   For two years, every comment the Joint Commission made about HCIRs was examined for relevance and impact.  

Finally in April 2009, the speculation that ”Joint Commission standards are coming” was answered by the Joint Commission’s statement declining to issue standards that specifically address health care industry vendor representatives, but still pointing to several of its own guidelines as applicable.

Still common practices are emerging that are gaining ground as standards.  

1.  Credentials and requirements align with risk.   

Vendormate’s recommendation, and most hospitals agree, is that credentials for individuals should reflect their role.   That is, sales reps that do not access procedural or patient areas do not need to meet the same requirements for training and immunization.    Credentials and requirements should reflect risk and be adjusted accordingly.

2.  The vendor company is distinct from the vendor rep.  

Requirements such as liability insurance and Business Associate Agreements are between the contracting entities — the vendor company and the health system — not between the rep and the materials manager.   While a rep may hold responsibility for providing this information as part of the account relationship, a rep should never be required to change the nature of the business relationship as part of the rep-level credentialing process.   

3.  Rep privacy must be protected.    

The rep’s privacy rights have to be balanced against the healthcare system’s need to document and verify.   Driver’s licenses and SSNs are not part of the default data set.     Reps are routinely reminded to black out that type of information from any document they share.

Yet even as standards for are being debated, the fundamental question of who is a vendor? is still debated.   Is it the company selling the good or service?   Is it the sales rep?  Is it the field service and support rep?

With this in mind, here’s a preview of two of our predications for 2010 and beyond.   First, increasing attention will be paid to the credentials and access of other special populations — visitors, volunteers, and non-licensed contractors.   Second, the uncertain economic climate will further press healthcare systems to measure the risks posed to their operations by their suppliers’ solvency and operations.   More traditional supply chain financial and operational monitoring is coming.

February 7 is the lunar New Year.  As I’m sure you’re aware, this date also ushers in a new animal.   We have come to the Year of the Rat.  

I suffer from the typical Westerners knee-jerk reaction that ”rat” is an unfortunate sign for an entire year, let alone to be born under.   So, I’m looking for evidence that this year might be better than the animal indicates to me.

Then I read this headline Survey Finds Corporate Business Ethics Back to ‘Pre-Enron Levels’ from the Fulton County Daily Record.  The gist is that according to The Ethics Resource Center’s 2007 National Business Ethics Survey we’ve made little progress in institutionalizing formal ethics practices, confidential reporting programs, etc. that were all the recommendation rage following Sarbannes-Oxley.  

Although we have successfully created entirely new lines of business focused on GRC (governance, risk, and compliance), we successfully haven’t changed the essential nature of people.   That is, there will always be a few of us who want a more without more work. 

It really is the year of the rat.

(more…)

I’ve been thinking about the disappearance of Thanksgiving as retailers continue to rewrite the merchandising seasons to jump from “Back to School” to the simultaneously marketed holidays of Halloween/Christmas.  Other than the grocery stores and a few restaurants, Thanksgiving is hardly mentioned.   Some would argue that we consumers brought this on ourselves.  After all, every September purchase that reflects the Halloween or Christmas theme only encourages retailers to start the shopping opportunities even earlier the following year.  

Despite limited marketing efforts, Thanksgiving creates the heaviest travel traffic of the year.   Despite the moans of travel woes and family drama, we persist in loading up the car or standing in line at the airport to go “home” for this holiday.  

I’m reassured that something in the American psyche that keeps “Thanksgiving.” 

So in keeping with the reality that this week your mind may be somewhat distracted, this week’s post is going to be a simple “Thank you.”   Here’s a brief post to thank you all for making Vendormate’s progress possible throughout the past year and to wish that the blessings of life be yours in abundance in the coming year.