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By Adam Turteltaub
adam.turteltaub@corporatecompliance.org
By Adam Turteltaub
A merger or acquisition is an expensive proposition for an organization and one that is rich in both business and compliance risks. That’s particularly true for the healthcare industry, with its substantial regulatory burden and constant change.
Shirley Qual and Andrea Ekeberg at UnitedHealthcare will be sharing their expertise on M&A compliance risk at the 2019 HCCA Compliance Institute. In this podcast they explain that successful compliance risk management begins with getting a seat at the table and persuading the business team that compliance can bring value to the conversation. Specifically, we can help them to prioritize and identify risks before the deal closes.
Once the deal is done, it’s time for compliance to go back to the seven elements of a compliance program and assess whether they are present at the acquired entity. Also, it’s essential to find out if they have a risk assessment, and what it says. Then, Shirley and Andrea suggest, look into past enforcement actions and how the entity has responded.
Listen in to learn more about how to manage the compliance role during a merger or acquisition. And don’t miss them at the 2019 Compliance Institute.
Thanks Andrea!
It was so nice to hear someone stick to the basics and raise the idea of using the 7 element compliance program framework.
It seems every day I hear someone saying there are 8 elements…9 elements…whatever number elements…often as a way to communicate how they have evolved the framework into something more comprehensive, more effective, or whatever. What makes this interesting is often these same folks are coming from a position where their current program is lacking in one or more of the basic 7 elements (auditing and monitoring is often one that is under developed if it exists at all).
Thanks for sharing. Am I saying that effective compliance program frameworks can’t have more than 7 elements…not at all. Just look at the ACA and FSG frameworks for starters.
I thought you folks brought up some good ideas that people might want to consider and decide if they might apply to their own situations during the interesting times of an acquisition or merger.
This was a great discussion and helpful reminders IF the asset being acquired already has a compliance program. It’s a very different set of challenges and opportunities if the asset does not have a compliance program in place.
Sometimes acquiring an asset without a compliance program is easier since the asset may realize they need a compliance program and welcome compliance into their space. At other times, the asset may state “we haven’t had a compliance program, haven’t needed one, why do we need one now.” Of course, answers such as “it’s a requirement” or even “it’s the right thing to do,” aren’t always convincing.
Implementing things like online compliance education, distributing the P&Ps, setting up audits and monitors and hotlines may “meet the mail,” but I prefer to establish a more personal relationship with the acquired asset’s staff so that compliance isn’t some “thing” that’s kind of floating out there. It’s great when I enter an asset’s office and staff know that I’m their Compliance Officer. We need to make compliance “real” for all, including the acquired asset.
Even though merger and acquisition deals could be expensive in both business and compliance terms, I think the benefits far outweigh the costs involved. , considering the facts that it often involves the blending of two or more business entities or organizations with their own unique strengths and attributes resulting into a much stronger, bigger profitable and efficient hybrid . It also offers a much faster and quicker means to investors and business owners to expand and grow their businesses, especially when having to expand into a new geographic territory providing a better competitive advantage to the newly formed or hybrid business entity by combining the experiences and expertise of the previously existing business in that particular location or setting.. . With the advent of new digital technologies merger and acquisition deals involving rebranding such as change of names, change of logo, colors and even some operational and administrative procedures could be concluded in a matter of days or even hours thereby making the process even more simpler and less hectic., .Finally it can also serve as a very strategic way of revitalizing , invigorating and reviving businesses and even the workforce since merger and acquisition deals often come with transformations that could psychologically inspire and boost the morale of the workforce culminating into much higher productivity, profitability and efficiency.
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