Viewpoints

Rx for Physician Practice Compliance Programs

Nedra Keller

During 2006, federal and state legislation significantly increased the chances that solo and small group physician practices may be subject to audit and recoupment efforts for government-sponsored health care programs.

Most significantly, the legislation created the NYS Office of the Medicaid Inspector General (OMIG) in statute and also created a new Social Services Law which requires that Medicaid providers develop and implement compliance programs aimed at detecting fraud, waste, and abuse in the Medicaid program. And the federal government has provided New York State with the funding stream to aggressively pursue Medicaid provider audit recoupments. The Federal-State Health Reform Partnership Medicaid Demonstration Agreement (F-SHRP) increased the spending and effort toward fraud and abuse recoveries in specific amounts. In fiscal year 2008, for example, it starts out with $215 million increasing to over $644 million for fiscal year 2011. Prior to 2006, it was fair to assume that recoupment efforts would be directed toward those entities with “deep pockets”. This is no longer the case and smaller providers of Medicaid Services (and potentially other federal/state sponsored programs) are likely to be subject to the audit and recovery process.

As you begin thinking about creating a Compliance Plan, keep these points in mind. A compliance plan is a written plan that:

• Tells what you are doing to make sure you are in compliance with governing regulations, and is
• An accurate representation of what you are already doing – not a promise to do something.
• The Compliance Plan should be updated periodically

Your Compliance Plan should reflect your office size, complexity, resources and culture. A solo practitioner or small group practice doesn’t need the same compliance plan as a health system, clinic or ambulatory surgical center. It should be scaled to your individual setting and be easy to use. Written accurately and followed diligently by you and your staff, it will prove to auditors that:

• You will catch your mistakes while they are still small
• Your systems will prevent big mistakes from happening
• You will respond appropriately to what you find
• You know what you’re doing
• You’re acting ethically and
• You don’t stick your head in the sand!

At a minimum, your Compliance Program should be applicable to billing and payments from Medicaid and Medicare and contain the following statutory elements:

• Written policies and procedures
• Designation of a Compliance Officer (or an employee compliance “contact”)
• Training for all
• Established lines of communication to the Compliance Officer/contact
• Disciplinary policy
• A system for routine identification of risk areas
• A system for responding to compliance issues
• Policy of non-intimidation and non-retaliation

We recognize that provider offices already face voluminous documentation requirements imposed by payers and regulators. Creating a compliance program is likely not a high priority among all the other administrative duties that are needed to keep a busy practice running smoothly. However, there are severe consequences for failing to adopt an effective compliance plan and will subject the provider to any sanctions or penalties permitted by federal or state laws and regulations, including, but not limited to, revocation of the provider’s agreement to participate in the Medicaid program and subsequent posting of that information on the publicly available OIG Exclusions Database. It’s at this point in the discussion that we sometimes get the reaction, “It would just be easier to stop accepting Medicaid patients”. But let’s think about this. A compliance program can actually be an important tool for physician practices of all sizes and does not have to be costly, resource-intensive or time-intensive. It can provide benefits by not only helping to prevent erroneous or fraudulent claims, but also by demonstrating that the physician practice is making additional good faith efforts to submit claims appropriately. And the quality of care provided to patients is enhanced by an effective compliance program that emphasizes employee training, continued self-assessment and prompt response to identified deficiencies. Physicians might view a compliance program as being analogous to practicing preventive medicine for their practice.

And as the old adage goes….”an ounce of prevention is worth a pound of cure”.

Disclaimer: The Bonadio Group provides the information in Viewpoints for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in Viewpoints are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.