Real estate is an essential element of health care. Goran Musinovic, Vice President, Realty Trust Group, hosts a conversation with two compliance officers who offer insights into their health systems’ real estate operations. They discuss:
Goran’s panel includes Dawn Geisert, Chief Integrity and Compliance Officer, Trinity Health, and Raul Ordonez III, Vice President and Chief Compliance Officer, Jackson Health System.
Listen to Goran’s other conversations with health care system real estate counsel and health care system real estate directors.
Sponsored by Realty Trust Group.
To learn more about AHLA and the educational resources available to the health law community, visit americanhealthlaw.org.
Real estate is an essential element of health care. Goran Musinovic, Vice President, Realty Trust Group, hosts a conversation with two compliance officers who offer insights into their health systems’ real estate operations. They discuss:
Goran’s panel includes Dawn Geisert, Chief Integrity and Compliance Officer, Trinity Health, and Raul Ordonez III, Vice President and Chief Compliance Officer, Jackson Health System.
Listen to Goran’s other conversations with health care system real estate counsel and health care system real estate directors.
Sponsored by Realty Trust Group.
To learn more about AHLA and the educational resources available to the health law community, visit americanhealthlaw.org.
Support for HLA comes from Realty trust group, a real estate advisory and services firm offering a full spectrum of real estate services, including advisory development, transactions, operations and compliance. Since 1998, RTG has helped health systems, physician groups, and property owners navigate the rapidly changing industry with growth strategies that gain market leadership and enhance patient and physician experiences for better delivery of care. For more information, visit Realty trust group.com.
Speaker 2:Welcome to today's podcast on insights from health systems, real estate compliance officers. My name is gore Matovich. I'm a vice president and attorney at Realty trust group. And I serve as the leader of RTGS real estate compliance service line. Today, I have the privilege of serving as the moderator for our steam panel. Before I introduce them and start the conversation. I want to take a second to talk about healthcare real estate. And the goal of this podcast series real estate is an essential element of healthcare. It is the place where healthcare services are delivered to patients, but beyond service, but beyond serving is a place to put patients and doctors when used effectively real estate allows providers to improve access, to care, improve the patient and physician experiences. Enter new markets, provide new services, gain market, share, reduce costs that generate significant revenues. It is always worth remembering that real estate often accounts for up to 30% of health systems assets on a balance sheet and hospitals own approximately 75% of the nation's medical office buildings in contrast to other types of real estate. However, healthcare real estate is heavily regulated the stark law, the anti kickback statute default claims act in a myriad of other healthcare statutes and regulations create a complex regulatory environment in which healthcare providers must operate daily. A course of action that may be perfectly acceptable in any other type of real estate transaction could in the context of healthcare real estate result in serious regulatory violations and expose healthcare providers to significant liability, which can wipe out years of profitable business ventures, given its large percentage of health systems, total assets and its business and legal implications. Real estate touches multiple departments and health systems, including real estate and property management departments, the legal and compliance departments, accounting and audit departments. And the C-suite just to name a few, whenever RTGS engaged by health systems to help them improve their real estate functions. The common problem that that we find is that many of the aforementioned departments work in silos simply put they failed to communicate with each other. And because they did not know what their respective responsibilities goals, objectives, and challenges are, they did not operate as a strong cohesive team, which in turn has negative consequences on the real estate function. The goal of this podcast series is to help provide insights to our listeners about the respective responsibilities, goals, objectives, and challenges of the departments involved in real estate with hope that this will help facilitate the communication between the various departments touching real estate and their organizations. In the first part of this three part podcast series, we gain valuable insights from health systems in-house real estate council. In the second part of this three part three part podcast series. We gain valuable insights from health systems, real estate directors. And in this third and final part of the three part podcast series, we will gain valuable insights from health systems, real estate compliance officers. Without further ado, let's begin by introducing you to today's panel. We're joined today by two superstar compliance officers who work for two premier health systems, Don Geiser who serves the chief integrity and compliance officer at Trinity health and Detroit, Michigan, and Raul Ordonez II, who serves as vice president and chief compliance officer at Jackson health system in Miami, Florida. I've had the privilege of working with Don for several years now and think the world of herb and the same goes with Raul. Who's also a fellow university of Tennessee college of law on, so go alls welcome. And thank you for taking the time to share your expertise with us. So to begin, let's um, have you all tell us a little bit more about yourselves, your organizations and your, uh, roles and your respective organizations, Don, let's start with you.
Speaker 3:Great. Thank you. Thanks for having me Gar, um, glad to be here, uh, with you and have enjoyed working with you and RTG as well. Uh, so yes, I am the chief integrity and compliance officer at Trinity health. We are one of the largest Catholic healthcare systems in the nation. Uh, we've got, uh, operations in 25 states, um, serving 1.4 million, um, patients and family members, um, 88 hospitals and hundreds of continuing care and clinic locations. Um, so certainly that adds to our challenge when we start to talk about real estate and real estate compliance. Um, I have been in compliance, uh, for just over 25 years now. Um, I started my career on the health plan side with a, a blue cross and blue shield plan here in Michigan. Um, and I've worked at a couple of different health systems most recently joining, uh, Trinity Trinity health about a year ago. So again, thanks for having me.
Speaker 2:Thank you, Raul.
Speaker 4:Hi Gorin. Thank you again for having me as well. Uh, my name is Raul Ordon and I serve as the chief compliance officer here in Miami, Florida at the Jackson for the Jackson health system. Uh, so the Jackson health system is the, the public hospital system here in, uh, Miami day county. Uh, we operate a number of hospitals, uh, here in the county, uh, including our, our flagship hospital Jackson Memorial, which, uh, is an academic medical center, uh, you know, with various academic partnerships, including with the university of Miami and Florida international university and others. Um, so it's, it's a very large hospital system, uh, down here and as the chief compliance officer, I'm responsible for oversight of the compliance program, uh, and, and a, you know, a considerable part of that is, uh, real estate compliance, uh, given some of the regulations that you referred to, uh, as part of your introduction.
Speaker 2:That's great. So let's kind start there. Uh, Raul, how do, how does your, uh, organization staff to real estate function?
Speaker 4:So we, we have a, uh, an internal real estate office that, um, is, is basically focused on, on managing all, any sort of real estate, uh, deals that, that occur here. You know, we have a number of, of, uh, of, of, of leases let's say at medical office buildings, uh, et cetera. Um, so with when, to the extent that there are referral sources, uh, involved, uh, we, we work very closely with them. Um, but they're managing, uh, real estate, not just real estate with referral sources, but real estate, uh, overall. Um, and so that, that can include a lot of, a lot of property, a lot, lot of different facilities that they're responsible for, but it is in house here.
Speaker 2:OK. Well, Dawn, what about you at, at your, at your health system? Is it, uh, internalized, outsourced or a hybrid of both?
Speaker 3:Yeah, same at Trinity. It's an in-house function. Um, again, I think for us, the, the challenge in being such a large system and operating in so many states is that we have a centralized team that works in our system office, um, right. Really kind of responsible for setting policy, procedure templates forms. Um, but we really have a regionalized team. So folks who are in the local markets, um, that really manage and understand the, the real estate market and what's happening, uh, with the hospital or health system in the market and sort of what the strategic plans are. Um, and for us, it's about how do we make sure that those regional local real estate, um, and we call'em colleagues, uh, right, are not operating in silos and that we all have a joint approach to how we are, um, entering into leases, managing leases, exiting leases, uh, you know, collecting rents and reconciling, um, all of those things. Uh, so having the function in house is, is helpful, but again, it's, it's a big sort of geographically dispersed team and, you know, us all transitioning to virtual I think, has been helpful there, but that does present a challenge for us.
Speaker 2:Sure. And do you, I mean, with, with those regional teams, I mean, what, what kind of, how do you all sort of, um, you, do you have regularly scheduled meetings? Like how, how do you all kind of keep in touch, just given the, you know, uh, the geography that, you know, data geographic challenges that are presented by that?
Speaker 3:Yeah. And I'm going to, you know, be transparent and admit that that's an opportunity for us. Um, again, I connect with our real estate business leader here in the system office, and we meet on a regular basis. We actually meet with our, our key, uh, real estate legal council as well. Mm-hmm<affirmative>, um, every month to sort of just touch base and see what everyone's got on their plate. And, and what's come through for our folks who are out at the local ministries, um, again, in their respective markets. That's also how our overall, uh, integrity and compliance program is set up. So we have integrity and compliance officers that are in those local markets as well. And they really manage the relationship with the local real estate person there. Okay. Um, again, admit that even our integrity and compliance program has some opportunity to break down some more silos and, and get to more standard processes. And that's something, um, that we're working on. Uh, but again, no real set cadence yet. Uh, but that's somewhere where we'd like to get, um, with all of the real estate leaders across all of our regions.
Speaker 2:Sure. And Raul, what about, you know, I think you, you kind of mentioned, obviously you're the, the chief compliance officer and you said, uh, real estate compliance is, is an important element of, of your job. How, how do you kind of fit into, you know, the, the, the, the real estate team and how do you sort of, uh, keep those communications, uh, lines of communication open between components and real estate?
Speaker 4:Sure. So I think it's, it's important to establish some type of process, uh, for oversight of any sort of perspective, real estate arrangements that, that are, uh, gonna be occurring. And so if you, if you have a policy, if you have a process, uh, whereby when there is any type of lease arrangement, uh, under discussion with a referral source that compliance be brought in sort of on the front end to understand, uh, you know, the, the essence of the transaction and, um, really ensure that the policy is, is, uh, followed. Now, what we, we have, uh, typically, or what I think is best practice is to have an, uh, external fair market value analysis done, uh, by experts, uh, that are, uh, particularly in, uh, real, uh, healthcare real estate, uh, that that's critical. Uh, and, and so I think best practice is to have the compliance officer involved in those conversations with the fair market value company, uh, in, in many ways as a bit of a liaison to, to understand, uh, the essence of the deal and make sure that whatever as, uh, whatever is being proposed, uh, sort of doesn't fall outside of any sort of regulatory, uh, thresholds or, or boundaries that, that we, we might be able to identify upfront. Um, so that that's really, um, you know, a lot of the work is, is related to that. And then seeing that arrangement, seeing that fair market value analysis done through, uh, the, the, the actual execution of the lease, and then ensuring that, um, whatever lease is, is put into place is in fact consistent with, um, the deal that you have been sort of discussing now for what, so sometimes it could be many months.
Speaker 2:Sure. So do you all, have you mentioned policies and procedures, which are so important, do you all have specific policies and procedures created to, you know, real estate arrangements, um, uh, in particular Jackson?
Speaker 4:Yeah. Yes. You know, we, I, I believe we would probably put it under, uh, our general referral source arrangement policy mm-hmm<affirmative>, uh, that will list the different types of referral source arrangements that exist, and then a particular process for, uh, whenever it's a real estate transaction, uh, in other words, who would be involved and, and how that real estate transaction would, would be operationalized.
Speaker 2:Sure. And, and is, and I think you also said, so that those compliance at Jackson try to get involved sort of at the front end of some of these transactions involving referral sources and kind of work hand in hand with the real estate team to make sure everything is, you know, done in accordance with your, uh, established policies and procedures.
Speaker 4:A absolutely. So I think that's, that's what we aim for. And fortunately, we, we, we're blessed to, to partner with our real estate, uh, office so that, uh, to the extent that they're requesting anything or considering a particular type of deal, and they want to, to get the fair market value companies, um, sort of thoughts on it compliance really has a seat at the table, um, to, to ensure that this is something that everybody would be comfortable with, or if there needs to be some changes to, to how, how that occurs that that happened on happens on the front end.
Speaker 2:Yeah. That's great. And is, and is also the legal department also involved like at, at the front end as well, or kind of help us understand, you know, with the compliance department at the legal department, how that all comes together with, uh, with the real estate department of Jackson?
Speaker 4:Sure. So, so they, uh, the legal department is also, uh, very involved. I mean, typically I think they do a lot of the, the actual legal, the drafting of the, of the contracts, um, et cetera, and sort of form leases that exist. Uh, the legal department would have typically drafted that or developed it. Sure. Um, as far as the actual, uh, arrangement itself and the obtaining of the fair market value, like this is done, I think a million different ways. And I don't know that there's a right way or a wrong way. Um, we at our organization compliance is, is typically leading that effort on the front end. And then when it, when the lease is being, uh, sort of reviewed, there's a collaboration with legal, uh, real estate and compliance, uh, as part of that, that, and on the back end part of it.
Speaker 2:Sure. So, Dawn, uh, do you all have any specific, you know, uh, procedures and policies for real estate arrangements for referral sources of Trinity?
Speaker 3:Yeah, we do. And our model relies very heavily on those. So I, you know, I think in contrast to what our rules talking about, um, at Trinity, we really leverage our real estate professionals and, you know, with the policies that we have, there's training and education that goes along with it. Um, our legal team has drafted, right, the least template. And so long as there's no modifications to the template, it's expected that right. Our real estate, uh, colleagues will be following the steps and our policy and procedure, and can, can move forward executing, uh, on leases and obtaining fair market value is maybe necessary. And then we would come along, uh, on the back end. Right. And do some, do some auditing to check, to make sure that the policies and procedures are being followed, um, with just so much activity going on. There's not the bandwidth to be involved, um, in every transaction. So we do have to, again, rely on our, our policy and procedures and how they're documented, and as well as the education that we periodically give, uh, to our colleagues out in the field.
Speaker 2:Okay. Yeah. So I guess if I understand correctly, just giving the size and kind of the, the, the geographic reach of, uh, uh, of your health system, Dawn, you know, I guess when, when a transaction's first coming up would compliance, wouldn't be involved necessarily the front end, like they would be at Jackson, they would be sort of coming in afterwards and, you know, conducting audits and things of that nature to make sure that these policies and procedures are being followed.
Speaker 3:Correct. Yeah. So long as the, the transaction is fairly routine and, and most of them are, um, of course there will be ones that come up that are unique or unusual or, uh, bigger than normal. Um, and so in those cases are, again, our local, uh, integrity and compliance office team is, is called in to provide support. And then, you know, I, if it's another level higher, right then our system office team is called in to, to support as well.
Speaker 2:Okay. So you have, you have compliance, uh, uh, officers compliance folks at the regional level as well as at the, at the corporate, uh, headquarters.
Speaker 3:That's correct. Yep. That's great. Yeah. And again, our, our regional local compliance officers, uh, again, more in tune to the market, more in tune to the strategy for where, uh, you know, a health system, for example, in California or Idaho is going as opposed to what's happening on the east coast. Uh, so we think that that provides that important connection, um, and their, their ability to provide that local support.
Speaker 2:Okay. And Rua Jackson, just kind of the, the staffing for the compliance team, is that, I mean, can you kinda give us a little bit of more information about that just in terms of the, the resources that you have to ensure compliance?
Speaker 4:Sure. So in some ways it's probably similar, although not, uh, the scope is, is, is less, obviously even at a, at a larger health system like Trinity, but we have multiple facilities and multiple hospitals. So we focus on having a compliance officer dedicated to each one of those facilities and ideally sitting at that facility and, and working from there. Um, and that, for the most part, we have other sort of support functions, dedicated to other areas like policies and, um, an office, a privacy office dedicated to, uh, HIPAA and privacy compliance, as well as individuals focused on, uh, training and education, uh, et cetera. But, um, but, but the, the majority or our considerable makeup of our department is, uh, based on the, the privacy officers that are dedicated to, uh, individual facilities or areas of, of the system.
Speaker 2:Sure. What, what's kind of your goal, you know, kind of sitting in your all's goals, like in sitting in, in, in the, in the, you know, chief compliance officer role, what what's, what's the goal for, for real estate, from a compliance perspective? Like what Don start with you? Oh
Speaker 3:Yeah. I'll jump in first for, for me, one of our primary goals right now is to get everyone using the same technology tools. Um, you know, having worked for an organization that was under a corporate integrity agreement, and now coming to Trinity with, uh, which is not under a corporate integrity agreement, thankfully, um, but just with the sheer volume of the, the leasing activity, having software tools to support not only the, the lease process and the storage of the documentation to support the lease process, but also write the accounts receivable and making sure that right, those rent payments are reconciled and no one's falling into arrears. I, I think it's really critical to support compliance. And again, here at, at Trinity is we work to really standardize, um, processes and functions and include standardizing technology. Um, right. So our personal goal from a compliance perspective right now is getting everyone use the same software tools, um, so that our processes can, can be in that more standard format, which allows us from an auditing perspective to be able to have a easier job when it comes to doing that.
Speaker 2:Sure. Raoul, what, what are, what are your goals and objectives as it relates to, you know, real estate and real, I guess, real estate compliance in particular?
Speaker 4:Sure. I, I think a lot of, a lot of our goals are similar to what Don mentioned. I think I, I, what I would add to that and is probably the goal of, of every, uh, compliance department also is to really, uh, ensure have we wrapped our arms around all of the sort of real estate activity that is happening in the organization. Is it a centralized process? And is it, if you have the centralized process, is it all operating through that centralized process? Um, because you don't wanna have just like any sort of contracting, you don't wanna have any sort of contracting happening in silos because that's, when, if you're not aware of it, then, then you know, who knows what's going on? So, I mean, our effort is to really, uh, try and ensure that, uh, whatever real real estate activity, uh, is happening, that, that, uh, compliance is involved, that we're aware of these leases, that the system, uh, is, is aware of, of this activity and that we've had opportunity to then review it and then ensure compliance on, on the back end as well.
Speaker 2:Sure. So what would be the biggest challenge, I guess, in, in terms of what you're trying to accomplish? I, is it, is it, you know, is it standardizing and centralizing and keeping your hands, you know, around the whole, all the activities that are taking place? Is that the biggest challenge, or if you had to kind of identify something that, you know, is, is a challenge that you'll try to overcome, what would that be as it relates to real estate and real estate compliance?
Speaker 4:You know, one, I think, uh, interesting challenge or that might be sort of unique to real estate. Um, I, it's certainly not, not totally unique, but what makes real estate, uh, different or interesting sometimes is the sort of evolution of a deal. And, uh, if you're involved early, which I, I think is, is, is ideal. Um, but you, you can witness how deals evolve. And then when you bring in, if, if you have a practice of having, uh, an external fair market value perform, for example, uh, making sure that, that, uh, fair market value analysis that has been performed is consistent with what the deal actually is after many months of negotiation, uh, you know, you can see how some of these deals can be very complicated and sometimes, uh, things just stop for a couple of months, and then you have to sort of, uh, negotiations pick up again. And, and so there's a lot of moving parts in any real estate transaction that I have that I have witnessed. And, um, just making sure that those, uh, moving parts are, are sort of understood. Um, and, and are, are in fact, uh, consistent with, with what, what everybody has been, has been working towards. I, I think that's sort of an interesting and, and unique real estate, uh, challenge.
Speaker 2:Yeah. I, I'll definitely echo that for some of the things that we've seen is, you know, you'll, you'll have a fair market value report, but, you know, the fair market value report doesn't really speak to the, you know, the transaction that it was, you know, procured for as, as support, you know, just you're kinda looking at apples and oranges. Uh, so, so I, I'll definitely echo that. I I've seen quite a bit of that. Uh, Dawn, what about you? What, what, what's the biggest challenge, uh, you know, in, in your, uh, practices real to real estate function, real estate compliance?
Speaker 3:Yeah. When I think about it for us today, um, I think our biggest challenge is related to right, the, the turnover, um, right. People are constantly leaving and moving, um, whether it's on the compliance, uh, team side or whether it's on a right, our real estate operations, uh, team side or it's hospital leadership. And so it is that sort of consistent need to make sure that we are engaging and connecting, because as I said, we are reliant so much on education and people understanding and knowing what a referral source is. And, um, right, as we sort of expand our view of, you know, who would be a great leader, uh, in our healthcare system, right? We are looking to people who maybe are coming from other industries and they may not recognize, uh, right. The stark and anti kickback, uh, implications that come along with real estate leasing and property management. And so, you know, for me, it's, how can we be more effective and efficient with the training and the education that we give and how can we make sure, particularly as we continue to operate, um, you know, with our administrative functions in a very virtual environment, that we are maintaining strong connection, um, with our, our hospital system leadership and understand their goals and objectives related to real estate. And again, that they have the knowledge, uh, that they need in order to be able to carry those out compliantly.
Speaker 2:Sure. And I, and I think that, that by there, Dawn, I kind of underscores the importance of, you know, having standardized policies and procedures. Uh, you know, what, what I often see is, you know, a lot of health systems don't have standardized policies and procedures. And then when people leave, you know, uh, kind of the way they were doing things leaves with them, and then you will have somebody else come in and fill that role. And, you know, they're gonna have a certain way of doing things themselves and then they're gonna leave. And, uh, so what happens over time is, you know, if you're kind of looking at, you know, uh, uh, you know, different arrangements that were entered into the course of five years, for example, there's a lot of variability between the arrangements, because in, in, in large part, because there wasn't a standardized process, there wasn't a standardized procedure that was being followed. It, it varied with, you know, with whoever was doing the, you know, negotiating those, um, arrangements before. And then it just kind of creates this level of inconsistency where it just doesn't look the same. And, um, and, and, you know, not to mention just some of the other things too, when you don't have to standardized policies and procedures, like you don't have a standardized place to save the documents often, you know, there, there's just not a lot of, uh, documentary support. Uh, for many of those arrangements, they may be saved on people's, you know, uh, uh, personal computers, personal drives, and, you know, when they're gone, you know, documents, leave with them as well. So, uh, we, we see that a lot as well. One thing I wanna talk about too is, you know, what, what we, we call operational compliance, right? So, I mean, like the way we look at compliance, there's transactional compliance, there's operational compliance, transactional compliance being, have you set up the real estate arrangements, you know, in compliance with, you know, the requisite stark law, exception, AKs, safe Harbor, et cetera. And a lot of health systems focus on that. You know, they'll, they'll bring in the legal team, they'll bring in the compliance department, they'll have, you know, third party, you know, valuation experts. Um, but often what we see what we, we see more issues when we're working with, you know, with different health systems is, is, is through the, you know, the main maintaining the arrangements, you know, in, in, in accordance with, you know, what, what they provide kind of the operational compliance. Um, do you, do you all see that and kind of what, what recommendations do you all have, you know, in terms of helping people make sure those real estate arrangements, ain paying compliant. And I think that's sort of where, you know, real estate is, is different than a lot of other, uh, arrangements, because often it's like a three year term five year term. I mean, it, it's, it's a long term arrangement that that requires constant, you know, Mon monitoring and administration. So, um, RO if you wanna start and kind of give us some insight on, on that.
Speaker 4:Absolutely. And, and I think that that is one of the major challenges in inherent in real estate. Uh, as, as I think you mentioned the needs on the ground might change. And, um, as a result of that, uh, the, the terms of the agreement might change. Um, but, but that's why it's so important that, that not be operationalized without some sort of discussion with, with those that have the authority to make these changes, uh, for the organization. Um, so, so that's, that's why I think monitoring is obviously so important and having a, having a real estate function in an organization is so key because in, in, in many ways, um, they're probably, uh, the perfect, um, uh, personnel to, to, to have a monitoring program because they're the ones that are, have the responsibility for compliance with, you know, collecting, uh, rent and, and ma making sure that the space is being managing, uh, managed appropriately. So I, I, I think, uh, having a monitoring program that the real estate, uh, function can be involved with, uh, is, is a great place to start. And then in addition to that, um, I, I think a best practice would be then having an independent auditing function, uh, whether that be internal audit or compliance to, in addition to the monitoring, that's going on by the real estate department, just be able to be absolutely sure that, um, the arrangement that is currently occurring is consistent with the lease that might have been signed as, as you mentioned, three, five, sometimes 10, uh, 20 years. And, you know, depending on how large the facility is, I've seen in my career, some, some leases that, that are actually, uh, you know, decades old. So, um, you know, this is, this is a major risk and, and certainly something that I think every program needs to take consideration of.
Speaker 2:Sure. And what, what kind goes into monitoring like, like what are some of the specific activities that, you know, that, that, that you shot to incorporate into the monitoring function?
Speaker 4:So you wanna make sure that the, the leases are actually, uh, being paid as, and I think Don alluded to that earlier is, are the payments consistent with the rent, um, is the actual space being utilized consistently? Has there, has there been any creep in the actual square footage, because if they're now using additional, uh, rooms or additional, um, spaces inconsistent with the lease, then you might have sort of a retrospective problem there. Um, because again, the stark law and the anti kickback statute, uh, require that the arrange would be set forth in advance and in writing. So that would be a, a concern there. And so how, how, what, what other ways can, can, can the arrangement change is, is the, um, is the, are the services that are being provided to the site? Um, whether it be a payment for utilities or any other type of cleaning janitorial services, uh, plumbing, et cetera, are those being paid and, or managed consistently with how the lease, uh, stated that they should be it's, it's, uh, very possible that that, that could evolve. Um, again, as you mentioned, as personnel changes, there might just be a, a more, uh, um, easier way to handle these things. But again, if it's not tied to how the leases, uh, dictates that it should be, then, then there is risk there. So that's what really jumps out to me, uh, Corin.
Speaker 2:Those are some, some great pointers there. What about you Don? How do you all, uh, you know, uh, ensure operational compliance once the arrangements are entered into?
Speaker 3:Yeah. And I think what, what, uh, Raul was just talking about in terms of doing periodic walkthroughs or making sure that the space is being used consistent with the terms of the lease, right. For many health systems Trinity included, right. That's something that we've really put on hold the last couple years because of COVID. Um, and so we're just now starting to pick that back up again. Um, you know, and, and sort of the anxious part of me wonders what we may find, um, kind of coming in after two, two years and going through a pandemic as we do that, but I see this as an important area, uh, for compliance, right, to be able to provide a checklist or guidance. Um, and if the compliance professional is not the one doing the walkthrough, and again, in Trinity's case, we would rely actually on our real estate colleagues to do that, um, right. Are we equipping them with some, you know, ready guidance for what they should be looking for? And, you know, are we circling back from a, a compliance office perspective and, and sort of checking through those and saying, okay, it was just completed correctly, or making sure that we're available to support if they're, um, our questions, but, um, you know, again, we've gotta pick it back up. Um, we know that it's, it's been something that we've intentionally, um, put on hold, but it's a really important part. I think of managing compliance with respect to leases, um, on the payment side for us, you know, that's a little bit more paper, computer focused if you will. So, so we do perform, uh, periodic audits of, uh, you know, whether the, the rents that we've received reconciled to the terms of the lease, or if we've had, you know, some sort of increase that should be applied, that the increase was applied, or if there's a penalty that needs to be applied, that was applied. That's a little easier to do, um, again, without having to, to step into a location. But I, I think it's important too, to make sure that there are, um, those periodic walkthroughs and, you know, to the extent that operational constraint becomes an issue. And again, that's also set, we are challenged with, um, again, I know many health systems have seen a reduction in birth over the past couple of years. And so a lot of individuals are being asked to do more, uh, and right. It could very naturally be right. Oh, the walkthrough rate, that's just something we're not gonna get to this month. Um, you know, Trinity is exploring how could we maybe use some outside help, um, to support us and actually, would it be more cost effective? Um, you know, if we brought in some outside assistance to do that work. So it's definitely something that's on our radar in terms of exploring and seeing what the appropriate model will be for us going forward as we come out of COVID sure.
Speaker 2:And, and Donnie, if you, if you, you know, find something during those audits, I mean, I think it's pretty much impossible not to, I mean, I'm sure, I don't think there's a single health system in the us where if you, you know, audited all their real estate arrangements, that it, you know, there will be you a hundred percent, everything will be a hundred percent, you know, in line. And then, so it's, so it's normal to, to see, you know, some, some things kind of fall through the cracks. Um, do you have any kind of best practice recommendations that if you all come across something like how, you know, how do you go about addressing that issue? Like just kind of a, maybe a, a step by step process in terms of who gets involved and so on.
Speaker 3:Yeah. I think as soon as something is recognized as even potentially being an issue, our process at Trinity is for our, um, integrity and compliance team, or if it's internal audit, um, which is doing the audit right to loop in a regulatory council, because we wanna start having discussions with someone who is skilled and expert in the stark and anti kickback rules. Um, right. And then it's a collaborative effort, um, along with the real estate again, team to determine, right, are, is there, uh, an exception that we can fit this under, or what sort of remedial steps do we need to take in order to bring this lease back into compliance? Um, so we do rely heavily, um, on our internal, uh, legal team to support us when that happens. And we're, you know, again, we're, we're grateful for, uh, there sometimes creative and strategic thinking in order to, to get an arrangement back into, into compliance. Um, you know, but I will say Trinity, um, has a very strong compliance culture. And so to the extent that, right, we couldn't fit something, um, under, uh, an exception or a safe Harbor or, or if we can't bring the lease back into compliance, right. We would take the next steps, um, from a compliance office perspective and, um, you know, prepare if it's a, a self disclosure or some other communication that we need to have with the, a regulatory authority, um, to say, Hey, here's, here's the issue that we have, and here's what we're doing, um, to fix it.
Speaker 2:Yeah, I think what's been helpful too, with the recent changes that a star claw, you know, and, and the clarifications that have been provided is, is there's just, uh, you know, from an operational compliance perspective. I mean, I think there's been some really helpful, you know, changes from, uh, from CMS kind of giving, giving providers the opportunity to, to, to fix those issues. You know, if they find them during the, you know, ongoing administration of the lease and if not arising to a reportable event. So I think it kind of encourages the providers to keep doing exactly what you and enroll have been saying, which is, you know, monitoring the, you know, the, the arrangements, you know, conducting audits and, and, and, and if you issues come up, you know, being able to fix those without there actually being any regulatory infractions. And so I think some of those changes have been helpful.
Speaker 3:I couldn't agree more, um, again, particular, particularly since some of the requirements are so very technical, um, right. And just a, you know, a small mistake or in the execution or in the operation of, of Elise could potentially result in a, in a big regulatory problem. Um, those additional flexibilities that have come out in the past couple of years have been very helpful to us in terms of resolving issues that have come up.
Speaker 2:Sure. Raul, how would you, how do you measure success, uh, you know, in, in, in real real estate and real estate compliance and in your job, like how, how do you, how do you measure success?
Speaker 4:I, I think, uh, one place to start is to just, uh, try to measure how many, how many leases have you been able to account for, uh, how involved were you in the, in the process, uh, from the beginning versus how many leases are you finding out about after the facts? Um, which, which is okay too, cuz you wanna, you wanna find out about it eventually, but, uh, one way to track, I think success would be to look at, uh, what is going through the process that you have built and what are you still finding out about afterwards that went outside the process, which might indicate that there might need to be a bit more training in education, uh, for, for the workforce, uh, et cetera. So, so that might just be a, a good way to, to track that.
Speaker 2:Sure. And do about yourself. How do you, how do you measure success?
Speaker 3:Yeah, I think absolutely those metrics at RO mentioned are, are so important. Um, but for us, so is, uh, understanding sort of the satisfaction, if you will, um, with our, our real estate colleagues and if they feel that they're getting the proper support from our compliance office and compliance team. So, you know, right, right now that's sort of measured on an ad hoc basis, uh, kinda, Hey, how are things going? Um, and again, uh, centered in our, our leadership. Um, but it's an area that, that is probably worth exploring in, in terms of a more structured, uh, feedback loop there. Uh, but just given our reliance on our local real estate professionals and hospital leadership teams, I think that'd be an important component for us in terms of assessing if we're successful or not in our program and our program operations. Sure.
Speaker 2:Well, this has been terrific. I, I, I really appreciate your role's insights, you know, and, um, do you all have any kind of last words of wisdom advice, you know, for, for our listeners, be it, you know, real estate colleagues, legal counsel, other compliance professionals, as it relates to real estate?
Speaker 4:You know, I, I would, I would only recommend that. I think that the sooner you can be involved, uh, the better the, the, the, the, um, sort of more collaborative your process can be with all these other stakeholders, whether it be a real estate, as well as legal counsel, as well as maybe internal audit as well. Uh, the more collaborative that process is, and the more the clearer the guidelines are around who's doing what I think you, you have a, a greater opportunity to ensure success. Um, so that, that would be, uh, really mine, as well as just trying to ki, uh, sort of keep, uh, certain pitfalls that you want to be aware of, both in the review of the lease itself, as well as on the, on the back end, when it comes to, uh, the, the auditing and monitoring, just making sure that you're focusing on the areas that, um, would, would understandably cause an organization to, to slip up. So if you can pin those down and know what to look for, uh, both on the front end and on the back end, I think, uh, you're gonna be able to ensure, uh, success,
Speaker 2:John.
Speaker 3:Yeah. You know, in addition to that, I would recommend, as I mentioned, because we rely so heavily on training and education, uh, really taking a focus on that and making sure that the training is relevant. Um, again, I think it's more important for our real estate colleagues to have an understanding of specific scenarios that they should be watching out for. Um, and there's plenty of examples that, that one could use with respect to enforcement that's happened, or issues that as a compliance leader, you've seen come up before, um, right. It's more important for them to recognize those situations and know that they can call compliance or legal to get support as opposed to having them recite the definition of stark and anti kickback. So, um, you know, that's just been for us as well, a focus on how do we make that training relevant, um, and important, uh, to, to our professionals and how do we let that team know, um, right. That we are here to support them. And I I'm sure Raul has the same sort of messaging that he needs to provide, right? We're not here to say no and be the stop yet. Right. We really wanna support the strategic goals that, um, our leadership has with respect to real estate. It is such an important component, I think, of, uh, healthcare and how health systems run. So, you know, the more opportunity that we have to engage and connect and to our Will's point, you know, hopefully earlier on in the process, as opposed to later, uh, to be able to demonstrate our value and how we can support, um, and, and allow our leaders to achieve those, um, strategic aims, but in a compliant way. I, I think just benefits us overall.
Speaker 2:Sure. Well, I wanna thank both of you, uh, for taking the time today. Uh, I know I learned a lot, uh, really appreciate your, uh, expertise and your willingness to share it, uh, with our listeners. Uh, thank you both again.
Speaker 3:Thank you.
Speaker 4:Thank
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