Michael A. Gonzalez Marshall & Melhorn, LLC Four Seagate, Eighth Floor

Toledo, Ohio 43604

 

 

 

 

       

 

• OIG issues guidance for individual and small group physician practices;

• Guidance addresses development of voluntary compliance program;

• Creation of compliance program is a major initiative of OIG in effort to combat fraudulent conduct;

• Physician compliance plans are not mandatory;

• However, benefits of compliance plan are: o Speed and optimize proper payment of claims; o Minimize billing mistakes; o Reduce the chances that an audit will be conducted by HCFA or the

OIG; and o Avoid conflicts with self-referral and anti-kickback statutes.

 

 

 

 

 

 

 

1) Conducting internal monitoring and auditing;

2) Implementing compliance and practice standards;

3) Designating a compliance officer or contact;

4) Conducting appropriate training and education;

5) Responding appropriately to detected offenses and developing corrective action;

6) Developing effective lines of communication; and

7) Enforcing disciplinary standards through well-publicized guidelines.

 

 

 

• No one size fits all compliance plan.

• OIG recognizes that complexity of compliance plan depends on manpower and resources of practice.

• Nevertheless, OIG expects physician practices to undertake reasonable steps to implement compliance measures.

 

 

 

 

 

 

 

 

1) Step One: Auditing and Monitoring

• Audit is an excellent way for a physician practice to ascertain what, if any, problem

areas exist and focus on the risk areas that are associated with those problems.

• Two types of audits:

o Standards and procedures – updated to reflect changes in government regulations

or changes in compendiums relied on by physicians (i.e. changes in CPT or

ICD-9 codes).

o Claim submission audit:

Ø Bills and medical records reviewed for compliance with applicable coding,

billing and documentation requirements.

Ø Self audit should involve person in charge of billing and a medically trained

person.

Ø Claims can be reviewed retrospectively or concurrently.

 

 

 

 

 

 

• OIG recommends base-line audit which examines claim development and submission

process, from patient intake through claim submission and payment.

o Allows you to identify elements in process that may contribute to non-compliance or

need improvement.

o Audit will establish consistent methodology for selecting and examining records and

will serve as a basis for future audits.

o Following baseline audit, OIG recommends periodic audits be conducted at least

once each year to ensure that the compliance program is being followed.

o Randomly selected number of medical records.

o 5 to 10 medical records per physician.

Tip: If outside auditors are involved, retain through your legal counsel.

 

 

 

 

o If problem areas are identified, practice will need to determine whether a focused

review should be conducted on a more frequent basis.

o One of the most important components of successful compliance audit protocol is

an appropriate response when a problem is identified.

o Under ACA – 60 days from identification of overpayment to report and return

overpayment.

o Failure to comply = False Claims Act violation.

 

 

 

 

 

 

  

      

2) Step Two: Establish Practice Standards and Procedures • After internal audit identifies the practice’s risk areas, the next step is to develop a

method for dealing with those risk areas through the practice’s standards and procedures.

• OIG recommends that a physician practice focus first on those areas most likely to arise in a particular practice.

• If physician practice works with a physician practice management company, IPA, PHO or third party billing company, the practice can incorporate the compliance standards and procedures of those entities, if appropriate.

• Physician practice can also create a resource manual from publically availableinformation. o For example, can develop a binder that contains practice’s written standards and

procedures, relevant HCFA directives and carrier bulletins, and summaries of informative OIG documents.

o Employees should be trained on standards and procedures when hired and updated when changes are made.

• Specific risk areas for standards and procedures. o OIG developed list of four potential risk areas affecting physician practices.

(1) Coding and billing; (2) Reasonable and necessary services; (3) Documentation; and (4) Improper inducements, kickbacks and self-referrals.

 

 

 

         

 

(1) Coding and Billing: • Policies and procedures should address the following risk areas

associated with billing: o Billing for items or services not rendered or not provided as

claimed; o Submitting claims for equipment, medical supplies and services

that are not reasonable and necessary; o Double billing resulting in duplicate payment; o Knowing misuse of provider identification numbers; o Unbundling; o Failure to properly use code identifiers; o Clustering; and o Upcoding the level of service provided.

 

 

 

 

(2) Reasonable and Necessary Services

• Billing for reasonable and necessary services should be addressed in policies and procedures.

• OIG recognizes that physicians should be able to order any tests, including screening tests, they believe are appropriate for treatment of a patient.

• However, Medicare will only pay for those services that are reasonable and necessary.

• Thus, when services are provided to a Medicare beneficiary, physician should only bill those services that meet the Medicare standard of being reasonable and necessary for treatment of a patient.

 

   

             

 

 

 

(3) Documentation: • Policies and procedures should address proper medical record

documentation. o Medical record must be complete and legible; o Documentation of each patient encounter should include:

Ø Reason for the encounter; Ø Relevant history; Ø Physical examination findings; Ø Prior diagnostic test results; Ø Assessment, clinical impression or diagnosis; Ø Plan of care; Ø Date and legible identity of observer.

• If not documented, the rationale for ordering diagnostic and other ancillary services can be inferred by an independent reviewer;

• CPT and ICD-9/ICD-10 codes used for claims submission aresupported by documentation and the medical record; and

• Appropriate risk factors are identified.

 

  

 

 

 

(4) Improper Inducements, Kickbacks and Self-Referrals: • OIG recommends that a physician practice have standards and procedures

that encourage compliance with the Anti-Kickback Statute and the Physician Self-Referral Law.

• Remuneration for referrals = illegal. • Physician arrangements with hospitals, hospices, nursing facilities, home

health agencies, durable medical equipment suppliers, pharmaceutical manufacturers and vendors should be closely scrutinized.

• Whenever a physician enters into a business arrangement that involves making referrals, the arrangement should be reviewed by legal counsel familiar with the Anti-Kickback and Physician Self-Referral Statute.

• Policies and procedures should also address measures to avoid offering inappropriate inducements to patients. o Examples are routinely waiving co-pays or deductible amounts without

good faith determination that the patient is in financial need or failing to make reasonable efforts to collect the cost sharing amount.

 

 

 

 

 

3) Step Three: Designation of Compliance Officer • Ideally one member of physicians staff accepts responsibility for overseeing

the implementation and day-to-day operations of the compliance program. • Due to resource constraints, it is acceptable to have more than one employee

with compliance monitoring responsibility. • Physician practice can describe in standards and procedures the compliance

functions for which designated employees, known as “compliance contacts” would be responsible. o For example, one employee could be responsible for preparing written

standards and procedures, while another could be responsible for conducting or arranging periodic audits and ensuring that billing questions are answered.

• OIG recommends the following list of duties be assigned to the compliance officer/compliance contacts: 1) Overseeing and monitoring the implementation of the compliance

program; 2) Establish methods, such as periodic audits, to improve the practice’s

efficiency and quality of services, and to reduce the practice’s vulnerability to fraud and abuse;

3) Periodically revising the compliance program in light of changes and needs of the practice or changes in the law and in standards and procedures of government and private payor health plans;

4) Developing, coordinating, participating in a training program that focuses on the components of the compliance program, and seeks to ensure that the training materials are appropriate;

5) Ensuring that the HHS-OIG’s list of excluded individual and entities, and the General Services Administration’s list of Parties Debarred from Federal Programs have been checked with respect to all employees, medical staff and independent contractors; and

6) Investigating any report or allegation concerning possible unethical or improper business practices and monitoring subsequent corrective action and/or compliance.

 

   

 

 

 

   

     

 

4) Step Four: Conducting Appropriate Training and Education. • Education programs should be tailored to the physician practice’s needs,

specialty and size, and include both compliance and specific training. • 3 basic steps for setting up educational objectives:

1) Determining who needs training (both in coding and billing and compliance);

2) Determining the type of training that best suits the practice’s needs (e.g. seminars, in-service training, self-study, other programs);

3) Determining when and how often education is needed and how much each person should receive.

• Training may be accomplished through a variety of means, including in-person training sessions (on-site or seminars), distribution of newsletters, or even a readily accessible office bulletin board.

• Compliance Training: o Initial and recurrent training with respect to compliance program itself

and applicable statutes and regulations. o Topics for compliance training include:

Ø Operation and importance of compliance program; Ø Consequences of violating the standards and procedures set forth in

the program; and Ø Role of each employee in operation of compliance program.

   

 

  

 

     

   

 

o Two goals of compliance training: 1) All employees receive training on how to perform their jobs in

compliance with the standards of the practice and any applicable regulations; and

2) Each employee will understand that compliance is a condition of continued employment.

• Coding and Billing Training o Individuals who are directly involved with billing, coding or other

aspects of the Federal Health Care programs should receive training specific to the individual’s responsibilities.

o Examples of items that could be covered in coding and billing training include: Ø Coding requirements; Ø Claim development and submission processes; Ø Signing a form for a physician without the physician’s

authorization; Ø Proper documentation of services rendered; Ø Proper billing standards and procedures and submission of

accurate bills for services or items rendered to Federal Health Care beneficiaries;

Ø The legal sanctions for submitting deliberately false or recklessbillings.

 

 

          

 

 

5) Step Five: Responding to Detected Offenses and Developing Corrective Action Initiatives

• Compliance plan should address how to respond to violations.

• Remember, for example 60 day reporting and refund requirement under ACA.

• Examples of responses include: o Developing a corrective action plan; o Return of overpayments; o A report to the government; o Referral to law enforcement authorities; and/or o Seek legal counsel.

• In cases involving individual misconduct, standards and procedures might also advise as to whether the individualsinvolved in the violation should be retrained, disciplined, or, if appropriate, terminated.

• If identify potential compliance problem, consider modifying compliance program to prevent reoccurrence.

 

 

 

 

 

 

6) Step Six: Developing Open Line of Communication • OIG recommends implementing an “open door” policy

between the physicians and compliance personnel and practice employees.

• Compliance program’s system for meaningful and open communication can include the following: o The requirement that employees report conduct that a

reasonable person would, in good faith, believe to beerroneous or fraudulent;

o The creation of a user-friendly process (such as an anonymous drop box for larger practices) for effectively reporting erroneous or fraudulent conduct;

o Provisions in the standards and procedures that state thata failure to report erroneous or fraudulent conduct is aviolation of the compliance program;

o The development of a simple and readily accessibleprocedure to process reports of erroneous and fraudulentconduct;

 

 

 

 

o If a billing company is used, communication to and fromthe billing company’s compliance officer/contact and other responsible staff to coordinate billing and compliance activities of the practice and billing company; Ø Communications can include, as appropriate, lists of

reported or identified concerns, initiation and theresults of internal assessments, training needs, regulatory changes, and other operational and compliance matters.

o The utilization of a process that maintains the anonymity of the persons involved in the reported possibleerroneous or fraudulent conduct and the person reporting the concern; and

o Provisions in the standards and procedures that therewill be no retribution for reporting conduct that areasonable person acting in good faith would havebelieved to be erroneous or fraudulent.

 

 

 

 

                 

7) Step Seven: Enforcing Disciplinary Standards Through Well-PublicizedGuidelines.

• Incorporate measures into its practice to ensure that practice employeesunderstand the consequences if they behave in a non-compliant manner.

• Include procedures for enforcing and disciplining individuals who violatethe practices compliance or other practice standards.

• Ensure that violations of the practice’s compliance policies will result in consistent and appropriate sanctions, including the possibility of termination, against the offending individual.

• Procedures might also stipulate that individuals who fail to detect or report violations of the compliance program may also be subject to discipline.

• Disciplinary actions could include: o Warnings (oral); o Reprimands (written); o Probation; o Demotion; o Temporary suspension; o Termination; o Restitution of damages; o Referral for criminal prosecution.