PHILADELPHIA COLLEGE OF OSTEOPATHIC MEDICINE COMPLIANCE AND ETHICS PROGRAM MANUAL

PHILADELPHIA COLLEGE OF OSTEOPATHIC MEDICINE COMPLIANCE AND ETHICS PROGRAM MANUAL

I. COMPLIANCE AND ETHICS PROGRAM BACKGROUND Philadelphia College of Osteopathic Medicine (PCOM) is committed to upholding high ethical standards and promoting compliance with applicable laws, rules and regulations in the conduct of all of its activities, whether performed in its role as Pennsylvania non-profit corporation, academic institution, employer, business entity or provider of health care services. To this end, the PCOM Board of Trustees has instituted a formal Compliance and Ethics Program to develop and enforce, and to educate PCOM Trustees, officers, Faculty, students and employees, including PCOM-affiliated physicians, physicians-in-training, physician assistants, nurses and other individuals involved in the provision of health care services (herein, Health Care Professionals), (collectively, the PCOM Community) about, the PCOM Code of Conduct and other PCOM policies, procedures and operational guidelines (the Compliance and Ethics Program). As part of the Compliance and Ethics Program, PCOM has adopted this Compliance and Ethics Manual. The Compliance Manual applies to the full range of PCOM operations. Its structure derives from the Federal Sentencing Guidelines as well as from specific recommendations for health care-related corporate compliance programs which have been issued by the Office of Inspector General with the Department of Health and Human Services (OIG). Additionally, because of the significant compliance responsibilities associated with PCOM s role as a provider of health care services, this Manual frequently discusses health care compliance issues in greater depth. In keeping with OIG guidance, the seven (7) components of the PCOM Compliance and Ethics Program include: 1. Implementing compliance and practice standards through the development of written standards and procedures; 2. Designating compliance officers to monitor compliance efforts and enforce practice standards; 3. Conducting training and education on practice standards and procedures; 4. Conducting internal monitoring and auditing through the performance of periodic audits; 5. Developing and maintaining open lines of communication with all physicians and staff; 6. Responding to detected violations through investigation of any and all allegations and their disclosure, as required, to appropriate entities; and 7. Enforcing disciplinary standards and guidelines. II. PCOM COMPLIANCE STANDARDS PCOM has adopted written standards of conduct which apply to the full range of its operations, including its role as a non-profit corporation, an academic institution and a provider of health care services (collectively, Compliance Standards). Such standards require PCOM Community Members to uphold all federal, state and local laws, rules and regulations (including rules applicable to participation in federally funded health programs) and PCOM s institutional standards applicable to performance of their responsibilities. PCOM s Compliance Standards are periodically reviewed, and revised as necessary, to respond to legal and regulatory developments 072689.00001/12300630v.1 2

and to address specific compliance risks which may be identified. The Compliance Standards include, but are not limited to: A. PCOM Code of Conduct The PCOM Code of Conduct establishes a common set of standards and ethical guidelines applicable to all PCOM Community Members. The Code of Conduct sets forth the general principles by which each individual is expected to abide in performing his or her duties at PCOM, and is supplemented by more specific policies, procedures and guidance (such as department manuals or handbooks) issued by PCOM. B. PCOM Faculty Handbook The Handbook includes specific policies and procedures applicable to PCOM Faculty. C. PCOM Healthcare Standards Manual The Healthcare Standards Manual addresses legal and ethical standards specific to the provision of health care services at PCOM s affiliated healthcare centers. Healthcare Standards Manual requirements apply to all PCOM Health Care Professionals and any other individual whose job responsibilities involve the provision of health care services, including treatment, billing or administrative duties. Development, implementation, enforcement and monitoring of such policies is the responsibility of PCOM s Chief Compliance Officer and his or her designee or designees (including the Healthcare Compliance Officer). The standards included in the Healthcare Standards Manual address patient care issues, billing and claims submission to both governmental and non-governmental payors and financial relationships with healthcare providers and suppliers. The Healthcare Standards Manual sets forth both general legal and ethical standards, as well as detailed policies and procedures for specific health care-related activities (for example, policies and procedures related to billing and coding, such as practices to follow for each payor, are found in PCOM s billing documentation.). Included in the Healthcare Standards Manual are the following general standards: 1. Ethical Standards a) All patients and their families will be treated with compassion and respect at all times. b) All patient-related information will be treated with confidentiality at all times in accordance with all applicable laws. c) Due to PCOM s commitment to education and the advancement of scientific knowledge, continuous efforts will be made by PCOM physicians and staff to maintain the study and application of current knowledge in all areas of patient care. d) PCOM is committed to honest dealings with respect to all patients and colleagues. Fraud and/or deception of any kind will not be tolerated. 072689.00001/12300630v.1 3

e) Billing activities will follow the current guidelines and standards of all federal, state and non-governmental payors. Any errors in billing activities will be reported to PCOM management as soon as they have been identified. f) Patients desiring treatment with a PCOM physician or provider will never be abandoned while still requiring clinical care. Should the patient and/or PCOM physician or provider decide to sever the patient relationship, the patient will be referred to another physician or appropriate health care provider to continue the patient s care. Transfer of medical records and related materials will occur to ensure patient care and safety. 2. Employee Hiring and Retention a) The PCOM Human Resources Department maintains and regularly updates all policies and procedures related to employee hiring and retention. These policies and procedures ensure that PCOM patients are cared for by qualified and competent individuals at all times. PCOM is committed to equal opportunity for all employees and applicants. In addition, the PCOM commitment to continual education and the advancement of knowledge is demonstrated by the provision of educational opportunities for all PCOM employees and physicians. 3. Coding and Billing a) Health Care Professionals will submit bills to the respective payor as follows: 1) Bills will be submitted only for services rendered and provided to the patient as documented on the patient record; 2) Bills will be submitted only for services that are reasonable and necessary for the diagnosis and treatment of the patient; 3) Only one (1) bill for each service or item will be submitted; 4) All provider identification numbers will be used in accordance with payor instructions to demonstrate proper billing of services and items; 5) Only covered services will be billed unless a signed advanced beneficiary notification form is on file for each non-covered service; 6) All proper coding modifiers will be used; and 7) There will be no upcoding of the level of service provided or unbundling of services. 4. Referrals and Financial Arrangements a) PCOM is committed to compliance with all healthcare fraud and abuse laws, including federal and state anti-kickback statutes and physician self-referral laws and standards. b) PCOM and its Health Care Professionals are prohibited from receiving gifts of more than nominal value from suppliers or vendors, in accordance with policies set forth in the Healthcare Standards Manual. This policy prevents the perception of remuneration in exchange for patient referrals or purchases of health care related items or services. 072689.00001/12300630v.1 4

c) PCOM Health Care Professionals are prohibited from making any financial arrangements with outside entities that receive referrals from PCOM for Federal health care program business. d) PCOM Health Care Professionals shall not enter into joint ventures with suppliers or vendors, consultants or leasing companies. 5. Patient Documentation Timely, accurate and complete documentation provides the foundation for quality patient care. Documentation of diagnosis and treatment is necessary for quality patient care, continuity of care between primary and specialty physicians, the determination of reasonable and necessary care and treatment and accurate coding and billing determinations. All Health Care Professionals providing services to patients are required to document all care and services provided in the patients medical records. The documentation will include legible entries of the following: Date and site of services; Reason for the patient encounter; Relevant history and physician examination findings; Prior diagnostic test results; Health risk factors and any interventions to address the risk factors; Assessment, clinical impression and diagnosis; Current diagnostic tests ordered or other ancillary services used with rationale for these; Plan of care including any follow-up care needed; and, Legible, complete signature or printed name below the signature. Patient records should be maintained in accordance with PCOM s Records Retention Policy and Procedure, and any other guidance issued by PCOM specific to patient records, in the Healthcare Standards Manual or in other communications. D. Other Standards of Conduct In addition to the standards listed above, PCOM has issued other supplemental standards which seek to promote institutional compliance with legal and ethical requirements, and which may take the form of individual policies and procedures, notices or departmental manuals. 072689.00001/12300630v.1 5

II. COMPLIANCE AND ETHICS PROGRAM OVERSIGHT AND ADMINISTRATION A. Audit Committee The Audit Committee of the PCOM Board of Trustees (the Audit Committee) has been charged with assisting the Board of Trustees in overseeing PCOM s Compliance and Ethics Program. The Audit Committee has been delegated authority to act on behalf of the Board of Trustees in connection with compliance matters. B. Compliance Officers Recognizing the variety of legal requirements and compliance responsibilities which arise from PCOM s varied roles as a graduate academic institution and health care provider, PCOM has designated two separate Compliance Officers to assist the Audit Committee in administering the Compliance and Ethics Program on a day-to-day basis. The Health Care Compliance Officer serves as Compliance Officer with regard to health care-related operations. The Institutional Compliance Officer serves as Compliance Officer with regard to all PCOM operations other than those directly related to the provision of health care services through the Healthcare Centers. In addition, PCOM has designated a Chief Compliance Officer who shall be responsible for the continued overall development, implementation and operation of the Compliance and Ethics Program. Each Compliance Officer shall have direct access to the Audit Committee to discuss any compliance issues. The performance of each Compliance Officer shall be reviewed annually by the Audit Committee. 1. Responsibilities of the Chief Compliance Officer The Chief Compliance Officer reports to the Audit Committee and is responsible for the continued development, implementation and operation of the Compliance Program. This includes the following duties: a) Overseeing and monitoring the implementation and operation of the Compliance and Ethics Program; b) Developing and implementing policies, procedures and practices and other Compliance Standards to help ensure compliance with all applicable laws, rules and regulations; c) Updating and revising the Compliance and Ethics Program and Compliance Standards, as appropriate; d) Preparing an annual compliance work plan which will be submitted to the Audit Committee for its approval. The work plan will detail the expected compliancerelated activities for the upcoming fiscal year (e.g., internal audits, educational programs). The Chief Compliance Officer will report to the Audit Committee on the status of the work plan on a regular basis. 072689.00001/12300630v.1 6

e) Developing, coordinating and participating in a training and education program which includes general compliance training for all employees and specialized, job-specific training where appropriate; f) Coordinating internal audits and participating in external audits; g) Responding to legal or administrative inquiries relating to compliance issues or audits; h) Receiving, documenting, investigating and responding to reports of non-compliance, including recommending corrective action, when necessary, and presenting such reports to the Audit Committee; i) Monitoring corrective action and compliance following any report, allegation or audit that does not meet the standards set by PCOM; j) Retaining records of all compliance-related activities including, but not limited to: (i) Compliance Committee meeting minutes; (ii) Educational programs; and (iii) Reports of non-compliance, as well as any investigation and audit activities, results and activities undertaken subsequent to such investigations or audits. k) Serving as a resource on compliance questions and issues; l) Reporting directly to the Audit Committee on compliance matters on a regular basis, at least two times per year; and m) Serving as a member of each Compliance Committee. The Chief Compliance Officer will make use of the Compliance Committees and other PCOM staff as necessary to assist in conducting activities relating to the day-to-day operation of the Compliance and Ethics Program. 2. Institutional Compliance Officer a) Designation: PCOM shall designate an appropriate officer to serve as Institutional Compliance Officer. b) Reporting: The Institutional Compliance Officer reports to the Chief Compliance Officer and the Audit Committee for all compliance-related matters. c) Duties: The Institutional Compliance Officer shall have initial responsibility for the duties and functions enumerated in Section 1. above as they relate to institutional compliance matters. 3. Health Care Compliance Officer a) Designation: PCOM shall designate an appropriate individual to serve as Health Care Compliance Officer. b) Reporting: The Health Care Compliance Officer reports to the Chief Compliance Officer and the Audit Committee for all compliance-related matters. 072689.00001/12300630v.1 7

c) Duties: The Health Care Compliance Officer shall have initial responsibility for the duties and functions enumerated in Section 1. above as they relate to Health Care compliance matters. In addition, to those general responsibilities, the Health Care Compliance Officer is specifically charged with the following duties: (i) Establishing methods including the baseline, quarterly and annual audits to improve the efficiency and quality of services. (ii) Reducing PCOM s vulnerability to fraud and abuse. (iii)reviewing and revising the Compliance and Ethics Program in keeping with the practice changes and any changes in federal, state or other payor standards and regulations. (iv) Developing, coordinating and participating in all training and education programs for physicians and staff related to the Compliance and Ethics Program. (v) Ensuring that the Human Health Services (HHS) - Office of Inspector General (OIG) list of excluded individuals and entities and the General Services Administration s lists of parties disbarred from federal programs have been checked with respect to all employees, medical staff and independent contractors. C. Compliance Committees PCOM has established two Compliance Committees, the Health Care Compliance Committee and the Institutional Compliance Committee, which assist the Compliance Officers in these respective operational areas in the implementation and oversight of the Compliance and Ethics Program at PCOM. The Chief Compliance Officer and the Compliance Committee Chairs, with the advice and assistance of the relevant Compliance Committee, may establish various other ad hoc and standing committees to address specific compliance issues (such as billing and claims, research, employment, educational or other matters), which will serve as a resource to the relevant Compliance Officer and Compliance Committee in developing and maintaining appropriate Compliance Standards and Compliance Program activities. Additionally, a Compliance Officer may direct specific issues to an appropriate Faculty or other institutional process for resolution. 1. Institutional Compliance Committee a) Membership: The members of the Institutional Compliance Committee shall be appointed by the Audit Committee, in consultation with the President, the Chief Compliance Officer and the Institutional Compliance Officer, and shall include representatives from a variety of operational areas at PCOM, specifically including the following: (i) The Institutional Compliance Officer, who shall serve as Chair of the Institutional Compliance Committee (ii) The Chief Compliance Officer, who shall serve as Co-Chair of the Institutional Compliance Committee (if an individual other than the Institutional Compliance Officer) (iii) The Chief Campus Officer of the Georgia Campus 072689.00001/12300630v.1 8

(iv) The Chief Diversity and Community Relations Officer (v) The Chief Human Resources Officer (vi) The Chief Research Officer (vii) The Chief Financial Aid Officer (viii) The Title IX Coordinator (ix) The Registrar (x) A Student Affairs Representative (xi) A Financial Administration Representative (xii) A Faculty Representative (xiii) An ITS Representative b) The Chief Legal Affairs Officer shall be legal counsel to the Committee c) Regular Meetings: The Institutional Compliance Committee shall meet two times a year. d) Special Meetings: Special meetings may be called by any member of the Committee, by the Institutional Compliance Officer, by the Chief Compliance Officer or by the President of PCOM. e) Specific Duties: In addition to other duties set forth in its Charter or assigned by the Audit Committee, the Institutional Compliance Committee may specifically perform the following tasks as part of its duty to assist in the implementation, continued development and oversight of PCOM s Compliance and Ethics Program: (i) Respond to Concerns, including complaints, or other reports of non-compliance or unethical conduct, including participation in investigations, audits and any actions required or recommended as a result of such reports, investigations or audits. (ii) Conduct regular reviews of Compliance and Ethics Program policies and procedures for enhancement and revision. (iii)regularly review and discuss educational programs and develop and coordinate compliance education and training programs. (iv) Review and discuss pertinent compliance issues. (v) Verifying compliance with all applicable Compliance Standards and/or any corrective actions implemented following any report or allegation or audit of activities that do not meet PCOM Compliance Standards. 2. Health Care Compliance Committee a) Membership: The members of the Health Care Compliance Committee shall be appointed by the Audit Committee, in consultation with the President, the Chief Compliance Officer and the Health Care Compliance Officer, and shall include representatives from a variety of health care related operational areas at PCOM, specifically including the following: (i) The Health Care Compliance Officer, who shall serve as Chair of the Health Care Compliance Committee. 072689.00001/12300630v.1 9

(ii) The Chief Compliance Officer, who shall serve as Co-Chair of the Health Care Compliance Committee (if an individual other than the Health Care Compliance Officer) The Chief Medical Officer (iii)physicians representing primary and specialty care (iv) Senior Administrators (v) Physician Billing representative b) The Chief Legal Affairs Officer shall be legal counsel to the Committee c) Regular Meetings: The Health Care Compliance Committee shall meet on a quarterly basis. d) Special Meetings: Special meetings may be called by any member of the Committee, by the Health Care Compliance Officer, by the Chief Compliance Officer or by the President of PCOM. e) Specific Duties: In addition to other duties set forth in its Charter or assigned by the Audit Committee, the Health Care Compliance Committee may specifically perform the following tasks as part of its duty to assist in the implementation, continued development and oversight of PCOM s Compliance and Ethics Program: (i) Respond to complaints or other reports of non-compliance or unethical conduct, including participation in investigations, audits and any actions required or recommended as a result of such reports, investigations or audits; (ii) Conduct regular reviews of Compliance and Ethics Program policies and procedures for enhancement and revision; (iii)regularly review and discuss educational programs, and develop and coordinate compliance education and training programs; (iv) Review Medicare and Medicaid newsletters, bulletins and notices as received; (v) Review and discuss pertinent compliance issues; (vi) Verifying compliance with all applicable Compliance Standards and/or any corrective actions implemented following any report or allegation or audit of activities that do not meet PCOM Compliance Standards. (vii) On a quarterly basis, the Health Care Compliance Committee shall: Educate and disseminate pertinent information to clinical and billing support staff. Perform an end-of-quarter analysis, including identification of trends and documentation concerning the following: Procedure volumes (payments and adjustments by payor type. Evaluation and Management ( E&M ) codes distributed to each Physician/Practice. Adjustments: financial hardship; professional courtesy billing. Explanation of Benefits (EOB) denials, denial reports, charge reductions and Electronic Claims Service (ECS) error logs. Review Accounts Receivable (A/R) credit balances Refund management. 072689.00001/12300630v.1 10

Review appeal process and account resolution. Conduct practice and physician productivity analysis. Update Correct Code Incentive (CCI); file last report. Report on rejected claims. Review Medicare Exclusion list. (viii) On an annual basis, the Health Care Compliance Committee shall: Review procedure codes for impact of annual changes to (1) International Statistical Classification of Diseases and Related Health Problems (ICD-9); (2) Current Procedural Terminology (CPT); and (3) the Healthcare Common Procedure Coding System (HCPCS), and update the practice management system. Review ongoing audit reports for physicians with less than 75% compliance. Review coded forms (superbill) for revision, and reprint or change computer generated forms. Conduct annual Practice & Physician productivity analysis and CPT benchmarking. Review annual Medicare Resource-Based Relative Value Scale (RBRVS) payment policy changes. Complete Explanation of Benefits (EOB) review and finalize charge master pricing update; implement update by effective date. Itemize CPT/HCPCS/Modifier coding changes for utility file update. Educate billing staff of any coding revisions. Install and implement new CPT codes for Medicare (effective January 1 of each year). Order new ICD-9 book (new codes released each October). Order revised CPT and HCPCS guides for upcoming year. Conduct external compliance survey regarding Medical Record and Coding Analysis. Review Compliance and Ethics Program activities. Perform Revenue Practice Analysis. Practice operational review by operational administration. Conduct annual review of Compliance and Ethics Program policies and procedures for enhancement and revision. Conduct and/or review and revise educational programs as needed. Review, revise and reorder key forms Superbills, Waivers, Clinical forms. Conduct E/M Benchmark analysis for each physician. Conduct annual review of all standards and processes related to billing. III. COMPLIANCE TRAINING AND EDUCATION A. General Compliance and Ethics Program Training and Education All new PCOM employees will receive mandatory orientation training generally concerning PCOM s Compliance and Ethics Program and the Code of Conduct, including the process for reporting suspected violations of the Compliance Standards. In addition, all PCOM Community Members are required to review the Code of Conduct and sign a Statement of 072689.00001/12300630v.1 11

Responsibility which attests to their agreement to abide by its standards, as well as any other applicable Compliance Standards, upon employment or enrollment and annually thereafter. Additional training will be provided as required by the individual s particular PCOM responsibilities. Such additional specific training may take place at regular or special departmental meetings, in individual sessions or through dissemination of written materials. All training activities will be documented, and include information on the date and subject matter of the training. Individual department heads are responsible for assessing specific educational and training needs within the department, and for informing the appropriate Compliance Officers of identified training and educational needs. Department heads are required to work with the Compliance Officers to ensure that staff are adequately trained on, and comply with, applicable Compliance Standards, and that training and educational programs provided to staff are effective and appropriate. B. Health Care Compliance Training Given the number and complexity of laws and requirements specifically applicable to PCOM s activities as a health care provider, PCOM Health Care Professionals will receive specialized training to enable them to fully comply with all laws, regulations and Compliance Standards which apply. All such training sessions will be documented with regard to both attendance and topics covered, and summarized for the Health Care Compliance Committee. Such job-specific training shall include, but is not limited to, the following educational programs: 1. Physician Education a) Initial Physician Education: Within sixty (60) days of joining the PCOM physician practices, a new physician will receive training on the following topics: (i) PCOM Code of Conduct. (ii) PCOM Compliance and Ethics Program Manual. (iii)pcom Healthcare Standards Manual. (iv) Documentation Policies and Procedures. (v) Billing and Coding Policies and Procedures. b) Ongoing Physician Education: (i) Following coding audit results below the standard set by PCOM, a physician will receive additional education relating to the area(s) set by PCOM, a physician will receive additional education relating to the area(s) in which the results did not meet standard. The educational session will be tailored to reflect the results of the coding audit and will include presentations, examples and documents for review. (ii) Additional on-going education will be provided to PCOM physicians as policies, standards and guidelines change in accordance with relevant statutes and regulations. 072689.00001/12300630v.1 12

2. Staff Education a) Initial Staff Education: Within 90 days of joining the PCOM physician practices, a new non-physician employee will participate in educational sessions where the following topics will be presented: Code of Conduct PCOM Compliance and Ethics Program Manual PCOM Healthcare Standards Manual Documentation Policies and Procedures Billing and Coding Policies and Procedures b) Ongoing Staff Education: Following any coding audit results below the standard set by PCOM, the staff member(s) involved will receive additional education related to the area where the results did not meet standard. The education session will be tailored to reflect the results of the coding audit and will include presentations, samples and documents for review. Additional on-going education will be provided to PCOM staff as policies, standards and guidelines change in accordance with relevant statutes and regulations. IV. COMPLIANCE AND ETHICS PROGRAM MONITORING AND AUDITS PCOM recognizes that ongoing evaluations of internal standards, processes and activities are key to ensuring a robust and effective Compliance and Ethics Program. This is particularly true with regard to PCOM s activities as a health care provider, where PCOM must ensure compliance with various detailed requirements, including billing and claims submission requirements and fraud and abuse laws. A. Audits and Monitoring- General PCOM will undertake periodic audits to (i) identify any deficiencies in its existing standards and procedures and (ii) identify and correct any violations or areas of potential risk. Audits may cover any area of activity or monitor compliance with any Compliance Standard or other law or regulation that is identified as a potential compliance risk. As related to health care activities, such audits may cover billing and claims submission activities (relating to both third party and governmental payors), compliance with fraud and abuse laws (including antikickback and physician self-referral laws) and physician contracting issues. Development of testing, audit and monitoring plans will be coordinated by the appropriate Compliance Officer under the oversight of the Chief Compliance Officer. All audit activities and results will be fully documented, and records maintained by the Compliance Officer. Any deviations from PCOM standards will be addressed by PCOM under the processes set 072689.00001/12300630v.1 13

forth for compliance investigations described in Section VI and any other related PCOM Compliance Standards. B. Health Care: Claims-Related Audits With regard to the claims development and submission process, PCOM has established an evaluation process which includes (but is not limited to) two (2) general types of audits: (1) standards and procedures evaluation and (2) claims submission audits. PCOM also monitors and reviews rejected claims on an ongoing basis. 1. Standards and Procedures Evaluation At least annually, the PCOM billing manager will review all standards and procedures related to the processes of submitting bills and coding. The billing manager s review will include identification and revision of all ineffective or outdated standards and procedures. The revised standards and procedures will reflect changes in government regulations or compendiums including, but not limited to, CPT and ICD-9-CM codes and processes. Revised standards and procedures will be reported to the Health Care Compliance Committee for review and approval. 2. Claims Submission Audit To maintain and document adherence to applicable federal and state standards and guidelines and third party payor requirements, an annual audit of a maximum of ten (10) patient record and corresponding claims will be completed for each full time physician (the number will be prorated by volume of clinical hours for part time physicians). The results of the annual audit will be presented to the Health Care Compliance Committee. Such audits may include a review of the following elements: A review of the documentation in the patient medical record to substantiate the coding and reflect the services and care provided to the patient by the physician. Documentation on the medical record is completed correctly. Documentation is signed as required. Services and care provided are reasonable and necessary. PCOM will also conduct an initial claims audit for any physicians joining the PCOM practices, to be conducted within six (6) months of the physician s starting date, or at the annual audit, if the timing coincides. If audit results reveal a level less than seventy-five percent (75%) compliance with guidelines and standards, the audit will be conducted again on a quarterly basis. Prior to the repeat audit, the physician and practice staff will receive education and training related to the applicable standards and procedures. 3. Rejected Claim Monitoring 072689.00001/12300630v.1 14

To maintain adherence to billing-related policies and procedures included in the Compliance Standards and to identify any potential noncompliance risks, all rejected claims pertaining to ICD-9 and CPT codes will be reviewed by the PCOM billing staff. In addition, a report of these claim reviews will be provided to billing management on a monthly basis. If the number of errors exceeds the normal, expected volume and there are repeat rejections, the report will be provided weekly until the reviews are within expected volumes. These reviews will be provided to the Health Care Compliance Committee on a quarterly basis, or, monthly if the number of errors exceeds the normal, expected volume. 072689.00001/12300630v.1 15

C. Health Care: Screening of Employees (Including Physicians) and Vendors/Contractors To comply with applicable health care laws and regulations, PCOM will conduct reasonable background screening on all new applicants for employment and all health care service or supply vendors/contractors to ensure the such applicant, vendor or contractor does not possess a criminal conviction for a health care-related offense, or has not been listed by a federal agency as debarred, excluded or otherwise ineligible for participation in federal programs. Such investigations will include review of the OIG Sanction Report, the General Services Administration list of debarred contractors and the National Practitioner Databank. Initial and ongoing screenings of physicians, employees and vendors are important because Federal law prohibits payments to be made for items or services furnished by an excluded person or entity, and this prohibition extends to payment for administrative and management services which are not directly related to patient care, but are necessary to the provision of services. In addition, the OIG may impose sanctions on any health care provider or entity that employs, or enters into contracts with, excluded individuals for the provision of services or items to Federal health care program beneficiaries. 1. Physicians: For PCOM physicians, such screening will be conducted at the time of initial employment and as appropriate thereafter. 2. Employees: For employees, such screening will be conducted at the time of initial employment and as appropriate thereafter. 3. Vendors/Contractors: Sanction list checks will be performed before the initial award of any contract, and annually or as appropriate thereafter. A list of approved vendors/contractors will be established for all services where PCOM is referring a patient to an outside vendor, including without limitation for ambulance services. This list will be reviewed annually (or more frequently, as appropriate) to insure that the approved vendor/contractor list does not include any sanctioned vendors or contractors. All PCOM Departments will be limited to the list of approved vendors/contractors for use as outside vendors where patient referrals are involved. V. COMPLIANCE AND ETHICS PROGRAM COMMUNICATION PCOM is committed to developing and maintaining open lines of communication with all PCOM Community Members with regard to compliance issues. To this end, PCOM has established an open door policy with respect to receiving reports of violations or suspected violations of the Compliance Standards, and with respect to answering questions about the Compliance and Ethics Program or Compliance Standards. 072689.00001/12300630v.1 16

A. Questions Individuals with questions about any aspect of the Compliance and Ethics Program, the Compliance Standards or other applicable laws or regulations are encouraged to seek clarification or advice from their supervisor or the Chief Compliance Officer. B. Reporting 1. Reporting Obligations PCOM has developed a disclosure program to assist in the effective implementation of its compliance objectives by encouraging individuals to raise compliance concerns for internal investigation. All PCOM Community Members are required to promptly report any conduct which a reasonable person would, in good faith, suspect to be fraudulent, unlawful, improper or erroneous, or in violation of the PCOM Code of Conduct, or other PCOM standards of conduct (hereinafter, collectively referred to as Concerns) in accordance with PCOM s Policy on Reporting Allegations of Suspected Improper Conduct (the Disclosure Policy). Failure to report any suspected fraudulent, unlawful, improper or erroneous conduct is a violation of this Compliance and Ethics Program and will result in disciplinary action up to and possibly including dismissal. 2. Reporting Hotline To facilitate reporting, PCOM has established an anonymous Reporting Hotline for receiving such reports. The Reporting Hotline number is (877) 874-8416. The Reporting Hotline may be utilized by any individual wishing to report a Concern, 24 hours a day, 365 days a year. The Reporting Hotline number will be posted in conspicuous locations throughout the PCOM campus and in the Healthcare Centers. Concerns reported on the Reporting Hotline will be received and documented by the appropriate Compliance Officer with oversight responsibility for the operational area(s) involved, and presented to the Audit Committee, in accordance with the Disclosure Policy. In addition, anonymous complaints may be made in writing to The Chief Compliance Officer, at the address below: 3. Reporting Processes Chief Compliance Officer Philadelphia College of Osteopathic Medicine 4190 City Avenue Philadelphia, PA 19131 ATTN: Allan McLeod, D.O. PCOM has established a process which seeks to ensure involvement of the appropriate Compliance Officer with all reported Concerns. The Compliance Officer may coordinate investigation and resolution of any Concerns with the appropriate PCOM departments, 072689.00001/12300630v.1 17

and/or refer the Concern to other appropriate PCOM departments or staff for resolution through existing institutional processes (for example, referring any reports relating to employment issues to Human Resources for resolution). In addition or as an alternative to the reporting processes set forth below, all PCOM Community Members may report any employment-related issues directly to the Director of Human Resources. a) Officers and Employees (including Faculty): In most cases, communication regarding the Concern should be directed to the individual s direct supervisor. If, after speaking with his or her supervisor, the individual continues to have reasonable grounds to believe his or her Concern is valid, the individual should report the Concern to the Chief Compliance Officer. If the individual is uncomfortable speaking with his or her supervisor, or if the supervisor is a subject of the report, the individual should report his or her Concern directly to the Chief Compliance Officer, who will document the Concern and report it to the Chair of the Audit Committee. b) Anonymous Reports: An employee may make an anonymous report, either by using the Reporting Hotline, or by submitting the Concern in writing to the Compliance Officer or the Chair of the Audit Committee. c) Physicians: Physician Concerns should be submitted either the Health Care Compliance Officer or through the Reporting Hotline. d) Trustees and Other Non-Employees: Trustees and other non-employees should submit Concerns either directly in writing to the Chair of the Audit Committee; in writing to the Chief Compliance Officer; or through the Reporting Hotline. 4. Authority of Audit Committee All reports of suspected violations will be presented to the Audit Committee in accordance with the procedures set forth in PCOM s Disclosure Policy. The Audit Committee shall have ultimate responsibility for investigating, and, as appropriate, making recommendations to the Board of Trustees, with respect to all reported Concerns. Unless otherwise determined by the Chairman of the Audit Committee, the initial review and investigation of each reported Concern shall be conducted by the Chief Compliance Officer. 072689.00001/12300630v.1 18

5. Confidentiality PCOM will, to the extent reasonably possible, protect the confidentiality of all information reported. However, in the course of an investigation, or legal proceeding, the anonymity of the person(s) involved may not be able to be protected. PCOM is committed to the elimination and prevention of any and all fraudulent, unlawful, improper or erroneous occurrences. 6. Non-Retaliation PCOM will not tolerate retaliation against an employee who in good faith reports suspected fraudulent, unlawful, improper or erroneous conduct, violations of the Compliance Standards or other suspected wrongdoing. However, any individual who makes a report which he or she knows to be false, or which is otherwise not in good faith, will be subject to disciplinary action. VI. INVESTIGATIONS PCOM is committed to maintaining its reputation as a leading academic institution and a reliable, trustworthy and honest provider of quality, patient-centered care and services. To this end, PCOM will maintain a vigilant oversight of all compliance-related activities, and will promptly respond to and investigate any and all suspected violations of the Compliance and Ethics Program or any other wrongdoing. A. Investigating Potential Violations Should PCOM receive any report or reasonable indication of suspected noncompliance with any of the Compliance Standards or any other wrongdoing, the appropriate Compliance Officer will respond in accordance with the allegation, and will document and present each circumstance to the Audit Committee. Investigations will be coordinated by the Chief Compliance Officer and/or PCOM s outside counsel, at the discretion of the Audit Committee. Based upon the results of the investigation, PCOM will take all appropriate measures in responding to a detected violation, including immediate action to correct the violation, possible disciplinary action or other sanction(s) against the individual(s) involved in the violation, and/or reporting of the violation to appropriate external entities (such as regulatory bodies) as required by law. PCOM will document and investigate all suspected violations which are brought to its attention, whether through the Disclosure Program or identified through warning signs discovered during audits, monitoring or other compliance review activities. 072689.00001/12300630v.1 19

1. Documentation Requirements When a communication is received regarding suspected violations of the Compliance Standards or other fraudulent, unlawful, improper or erroneous conduct, the following will be documented: Date of communication Method of communication Name of person reporting (if known) Name of person responsible for the investigation Findings of the investigation Actions taken as a result of the investigation Follow-up actions if needed. The sample Investigation Report form which follows may be used to document the requisite information. Other forms of documentation that include all elements listed above are also acceptable. B. Disclosures of Detected Violations PCOM will, when appropriate, make disclosures of detected violations of the law, Compliance Standards or other wrongdoing to appropriate external entities, including governmental and third-party payors and/or law enforcement agencies. Voluntary selfdisclosures of irregularities in health care activities relating to Federal health care programs will be made in accordance with OIG s Provider Self-Disclosure Protocol, 63 Fed. Reg. 58399 (October 21, 1998). 1. Health Care Overpayments: If overpayments for health care services are identified from any payor source, the Chief Compliance Officer will promptly notify the payor. The disclosure to the payor will occur within thirty (30) days of the identification of any overpayment. In addition, the disclosure will include arrangements to repay the overpayment to the affected payor. C. Preventing Future Violations Following any and all investigations of warning signs and/or reports of suspected violations, PCOM will review the Compliance Standards and Compliance and Ethics Program Manual for changes needed to prevent any recurrence of the problem(s). VII. ENFORCEMENT Philadelphia College of Osteopathic Medicine (PCOM) is committed to the enforcement of this Compliance and Ethics Program and the Compliance Standards. All PCOM Community Members must comply with applicable laws, rules and regulations, as well as PCOM s Compliance Standards, and must report any suspected violations thereof. PCOM will respond quickly and consistently to any violations. 072689.00001/12300630v.1 20

A. Disciplinary Actions Enforcement of the PCOM Compliance Standards will include interventions and disciplinary actions to respond to any and all detected violations of the Compliance Standards, as well as the failure of individuals to report or detect violations when they should have reasonably done so. The intervention or disciplinary action taken following a violation or failure to report a violation will be recommended by compliance personnel following the investigation. The actions taken may include any or all of the following: Verbal warnings with the involved party; Written reprimands with documented action to be taken to correct the violation; Probation of employment status; Temporary suspension of employment status; Discharge from employment; Restitution of damages; Referral for criminal prosecution. All interventions and disciplinary actions will be taken in accordance with applicable PCOM standards, including the bylaws (for Trustees), the Student Handbook (for students); the Faculty handbook (for Faculty) and Human Resources policies (for employees). B. Employee Evaluations Participation in compliance activities and adherence to the Compliance Standards will be a factor in all evaluations for officers, Faculty and employees, and will affect decisions concerning compensation, promotion and retention. C. Non-Employment or Retention of Sanctioned Individuals PCOM will not knowingly employ or contract with any individual or contract with any person or entity who has been convicted of a criminal offense related to the provision of health care items or services or who is currently listed as debarred, excluded or otherwise ineligible for participation in federally funded healthcare programs. If such criminal charges are pending, or debarment or exclusion is proposed, pending the resolution of such matters individuals and entities with whom PCOM currently contracts must be removed from any responsibility for or involvement in providing any products or services related to any federally-funded health care program. 072689.00001/12300630v.1 21

Philadelphia College of Osteopathic Medicine Investigation Report Date of Report: Method of Report: Name of Reporter (if known): Responsible Investigator: Date Investigation Complete: within thirty (30) days of report Investigation Findings: Action(s) Taken: Topic Action Plan Person Responsible Date Completed Target Date Signature of Investigator Date 072689.00001/12300630v.1