No Longer an Option
By Crystal Zuzek Texas Medicine May 2013

Feds Now Require Antifraud Compliance Plan

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Law Feature – May 2013

 Tex Med. 2013;109(5):21-23.

 By Crystal Zuzek 
Associate Editor

The U.S. Department of Health and Human Services Office of Inspector General (OIG) used to encourage physicians in Medicare and Medicaid to adopt voluntary compliance programs. But now it's the law.

Under the Patient Protection and Affordable Care Act (PPACA), compliance programs are no longer voluntary. As a condition of enrollment in federal health programs, including Medicare and Medicaid, the health system reform law requires physicians to establish a compliance program that features specific core elements.

In the fall, the Texas Health And Human Services Commission (HHSC) released final rules on Medicaid compliance programs, including enforcement provisions that allow HHSC to levy administrative penalties or sanctions against those who fail to establish an "effective compliance program for detecting criminal, civil, and administrative violations." The rules took effect Oct. 14, 2012.

Family physician Greg Sheff, MD, is medical director of care management and clinical integration for Austin Regional Clinic (ARC), which has had a compliance program for 10 years – long before the federal mandate.

"At ARC, we've seen the value in having a structured process that helps ensure we're operating in line with regulations and that provides a vehicle for improvement when necessary," he said.

Amanda Hill, an Austin attorney and former ARC general counsel, says a robust compliance program can help physicians avoid prosecution for health care fraud if a federal agency investigates them.

"The federal government will show no leniency if a medical practice doesn't have a compliance program. Physicians need to develop a written plan that details how they audit for possible billing and coding errors and correct mistakes. They also need to ensure implementation of the plan and update it regularly," Ms. Hill said.

Dr. Sheff has advice for physicians who are just getting started on their compliance program.

"Start by cultivating a medical practice culture that is committed to compliance and to addressing any concerns that arise. After that, the practice will want to appoint a compliance officer or team and provide education on the compliance process," he said.

Establishing a compliance program doesn't have to be a major strain on a medical practice, but it does require some training and customization.

"The program doesn't have to be elaborate and complex. But at the same time, physicians shouldn't just pull a boiler plate plan off the Internet. I'd rather see a bare-bones program a group can follow than a complicated one that doesn't apply to the practice," Ms. Hill said. 

Detect and Correct

With increased emphasis on recouping money for federal health programs, it is pivotal physicians use their compliance programs to quickly detect and correct billing and coding mistakes.

"The compliance plan should permeate into how the practice conducts business and should provide a basis for creating an environment where people can easily raise concerns while having their identities protected," Dr. Sheff said.

ARC takes measures to ensure that its roughly 300 physicians implement and adhere to the compliance plan. Dr. Sheff says the ARC governance committee reviews the plan annually, and the executive board receives an annual compliance report.

ARC provides compliance plan training and education each year to physicians and staff members in the form of PowerPoint presentations.

"The educational sessions focus on the fundamentals of compliance and allow us to highlight any specific areas such as new regulations or updated information," Dr. Sheff said.

The Texas Medical Association has resources to help physicians craft a compliance program. TMA's Fraud and Abuse publication has a section focused on helping physicians identify and implement an appropriate compliance program to adhere to the laws, regulations, and guidelines that pertain to solo and small group practices.

TMA also offers a step-by-step guide to creating a compliance program available in print and electronic format. Ms. Hill wrote both publications. To purchase the guide to creating a compliance program, visit the TMA Education Center.

Policies & Procedures: A Guide for Medical Practices, published by TMA, contains a section on compliance to help medical practices implement and enforce their own programs. A hard copy of the guide with customizable CD is $295 for members and $395 for nonmembers. The customizable CD alone is $255 for members and $355 for nonmembers. To order the guide, call the TMA Knowledge Center at (800) 880-7955 or email TMA Knowledge Center.

Stick to the Plan

OIG developed compliance program guidelines for individual and small group physician practices that can help prevent the submission of erroneous claims.

OIG issued seven core elements that compliance programs must possess to continue participation in federal health care programs: 

  1. Conduct internal monitoring and auditing. Ms. Hill says, ideally, at least two people – a billing staff member and at least one medically trained professional – should conduct coding and documentation audits. These reviews are an opportunity to compare the medical record with the claim form to determine correct coding and services, complete and timely documentation, and the reason and necessity for services.
  2. Implement compliance and practice standards. Written standards and procedures help reduce the risk of improper billing practices by identifying risk areas and establishing tighter internal controls to counter those risks, Ms. Hill says. At least one practice member should monitor standards and procedures to ensure they are current and complete and should inform employees of changes and updates. When establishing practice standards and procedures, Ms. Hill recommends physicians consider any billing weaknesses or practice areas that may attract scrutiny. (See "Identify Fraud and Abuse Red Flags.")
  3. Designate a compliance officer. In a group practice setting, the compliance officer would ideally report to the board of directors or to a board committee. In small and solo practices, the compliance officer should report to upper-level management.
  4. Conduct appropriate and effective training and education. Medicare and Medicaid compliance requirements are constantly changing, so training is crucial. Ms. Hill recommends at least annual training that could include an overview of the related fraud and abuse statutes, details about the compliance plan and how it works, the identification of the compliance officer, and the role of each employee in the compliance plan. She also encourages medical practices to have a hotline or phone number employees can call to report possible compliance violations.
  5. Respond appropriately and promptly to detected offenses, and develop a plan to correct them. When a medical practice detects a compliance violation, it must take appropriation action. The compliance officer should form a corrective action plan and should launch an investigation upon receiving a report or complaint of a compliance problem.
  6. Develop open, effective lines of communication. An effective compliance plan allows employees to report suspected violations easily and without fear of retaliation. OIG suggests creating anonymous alternatives, such as a drop box, for reporting suspected violations, or a statement in the practice's policies and procedures manual that not reporting suspected erroneous or fraudulent conduct violates the compliance program.
  7. Enforce disciplinary standards through well-publicized guidelines. A written policy helps medical practices ensure fairness and consistency in the application of discipline, Ms. Hill says. Informing physicians and staff members of disciplinary guidelines for compliance violations should be part of annual training.  

The fraud and abuse landscape is full of legal landmines. Physicians may want to seek professional help.

"It might be wise for a practice to secure qualified legal counsel or specialized experts to review coding and billing practices, outside relationships, medical documentation, or the compliance plan itself," Ms. Hill said.

TMA Practice Consulting offers customized coding and documentation training, as well as reviews and chart audits. To inquire about these services, contact TMA Practice Consulting by telephone at (800) 523-8776 or by email  All services are available for a fee based on a practice's needs.  

Crystal Zuzek can be reached by telephone at (800) 880-1300, ext. 1385, or (512) 370-1385; by fax at (512) 370-1629; or by email.


Identify Fraud and Abuse Red Flags

One way to help keep your practice operations squeaky clean and in compliance with fraud and abuse laws is to develop an internal set of warning indicators. These might include:  

  • Significant changes in the number and/or types of claim rejections and reductions,
  • Correspondence from carriers and insurers challenging the medical necessity or validity of claims,
  • Illogical patterns or unusual changes in coding patterns or usage, and
  • High volumes of unusual charge or payment adjustment transactions.  

If any of these warning indicators become apparent, the practice should follow up with an internal assessment and take corrective action, if necessary, as outlined in the practice's compliance plan. This means both: 

  • Setting things right. In the case of overpayments, for example, prompt identification and repayment to the affected payer, or in the case of a potential criminal violation, referral or disclosure to an appropriate government authority or law enforcement agency.
  • Making sure the violation isn't compounded or repeated.

Physicians can access the U.S. Health and Human Services Office of Inspector General's (OIG's) Practitioner Self-Disclosure Protocol online.

Avoiding fraud and abuse and knowing how to respond if a government audit flags your practice for an investigation are serious matters. OIG publishes an annual work plan containing activities the agency will review.

For more information on compliance program guidance for individual and small group physician practices, visit the OIG website.

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Last Updated On

May 13, 2016

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