Protect Your Practice with a Sound Compliance Program


by Jason E. Lopata, Esq.

On an unsuspecting day, you arrive at your practice to discover your nursing manager wants to discuss a matter she overheard discussed in the billing department.  She states that one of the billers is posting out charges for services with modifiers that result in payment, but her colleague found a coding policy that considers that practice ‘unbundling’ of services, and therefore could prompt an audit and potential penalties if found to be the case. The billing employee brushed it off and stated that this is what she was told to do by one of the senior partners in order to make sure the claims got paid. Maybe it was an honest billing mistake, or perhaps something more sinister is occurring – but what do you do now?  Where do you turn for guidance as to how to investigate and properly handle these alleged fraudulent transactions that may be occurring in your practice?   The answer lies in a well-designed compliance program.

The healthcare industry is currently undergoing increased scrutiny of its billing practices, facility-physician relationships, and even treatment protocols, so it is vital that practices arm themselves with a competent compliance program.  Having policies in place shows an organizational commitment to compliance with state and federal regulations, regardless of the specialty or size of the group. A good compliance program should improve the efficiency of claims payments, minimize billing mistakes and improve the documentation of patient medical records.  Another benefit of such a program is a reduction in the chances that an audit will be conducted by CMS, OIG, and commercial Payers, and at the very least, would give your practice the benefit of the doubt should an audit occur.  The increased use of Recovery Audit Contractors (RACs) shows that government agencies are expanding their budgets to actively review all payments made and pursue those practices receiving reimbursements that appear to be outliers on set algorithms, regardless of the reasons for that.

So what is involved in a proper compliance program? Implementing proper, practice-wide procedures is a means to developing a code of conduct and establishing written policies to enforce it.  Key areas that should be addressed include coding and billing, proper documentation of medically necessary services, improper inducements or self-referrals, and record retention.

First, assign compliance monitoring to a compliance officer in the practice. This could be a senior physician, or your office manager.  As you build out the program, employee training should always been kept in mind, so that practice ethics and the policies and procedures established are followed and understood by your staff.  A good program will help your practice develop effective lines of communication.

Second, and most importantly, establish a protocol for responding to detected offenses and give your practice the ability to take immediate corrective action.  Consider the use of a ‘non-compliance’ report for placement in an employee’s file, conducting additional training to address the non-compliant behavior, and regular reviews of the practice’s procedures to ensure that there is guidance as to how to handle the situation should it arise within the practice again.

The top recommendation for all practices is to make compliance part of every staff meeting, by discussing issues that have come up within the practice or in the news, and make compliance adherence a part of every employee evaluation too. Every employee review should contain a rating on compliance and all training on compliance should be fully documented.  Employees must not only receive training on how to perform their jobs in compliance with the standards of the practice, but each employee must understand that compliance is a condition of continued employment.

While the task may seem daunting to integrate internal monitoring, implement compliance protocols, appropriately train employees, and enforce disciplinary standards – making the effort within your practice is necessary should that suspected misconduct or audit every occur.   And if it doesn’t (and there is no way to guarantee such a thing), your practice should still find efficiencies and sound protocols that will positively affect the bottom line. And in the event of an audit, the totality of all of the documentation evidencing the continual reinforcement of compliance policies and procedures could support your practice’s argument that when a billing or claims mistake was made, it was just an “innocent” mistake, rather than an assumption that some type of fraud was being attempted within your practice.

Practice tip:  Don’t wait for an audit to happen, perform one yourself and make the necessary adjustments now. Select 50 files per physician and see if there is a pattern of high level or modified codes that might raise red flags with Medicare or Medicaid.  With those high complexity codes, is there always supporting documentation in the form of diagnostic results and physician notes or reports to support the submitted claims?  If the answer is no, adjustments need to be made in chart documentation policies and coding training at the provider level.  Think about conducting an “in-process audit,” which uses files for claims that have not yet been submitted for payment.  This provides the added benefit of allowing you to correct any mistakes before they are submitted.

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