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Class 10 -     Compliance Plans:    For Physicians

Compliance Plans for Individual and Small Group Physician Practices

    In September, 2000 the Department of Health and Human Services (HHS) Office of Inspector General ("OIG") issued Compliance Program Guidance for Individual and Small Group Physician Practices.  

    This final guidance is  a "roadmap" to help physicians in individual and small group practices design voluntary compliance programs that best fits the needs of that individual practice.  Inspector General June Gibbs Brown claims that "The guidance itself provides great flexibility as to how a physician practice could implement compliance efforts in a manner that fits with the practice's existing operations and resources."  

    Inspector General Brown further stated that, "We are encouraging physician practices to adopt the active application of compliance principles in their practice, rather than implement rigid, costly, formal procedures. Our goal in issuing this final guidance was to show physician practices that compliance can become a part of the practice culture without the practice having to expend substantial monetary or time resources."

    According to the HHS-OIG this final guidance specifies that:
"Under the law, physicians are not subject to civil, administrative or criminal penalties for innocent errors, or even negligence. The Government's primary enforcement tool, the civil False Claims Act, covers only offenses that are committed with actual knowledge of the falsity of the claim, reckless disregard or deliberate ignorance of the truth or falsity of a claim. The False Claims Act does not cover mistakes, errors or negligence. The OIG is very mindful of the
difference between innocent errors ("erroneous claims") and reckless
or intentional conduct ("fraudulent claims")."

    Further, according to the HHS-OIG, "a voluntary compliance program can help physicians identify both erroneous and fraudulent claims and help ensure that submitted claims are true and accurate. It can also help the practice by speeding up and optimizing proper payment of claims, minimizing billing mistakes and avoiding conflicts with the self-referral and anti-kickback statutes."

    HHS-OIG also specifies that "unlike other guidance previously issued by the OIG, the final physician guidance does not suggest that physician practices implement all seven standard components of a full scale compliance program.  While the seven components provide a solid basis upon which a physician practice can create a compliance program, the OIG acknowledges that full implementation of all components may not be feasible for smaller physician practices.  Instead, the guidance emphasizes a step by step approach for those practices to follow in developing and implementing a voluntary compliance program. As a first step, physician practices can begin by identifying risk areas which, based on a practice's specific history with billing problems and other compliance issues, might benefit from closer scrutiny and corrective/educational measures.

    The step by step approach is as follows:  

1) conducting internal monitoring and auditing through the performance of periodic audits; 

2) implementing compliance and practice standards through the development of written standards and procedures; 

3) designating a compliance officer or contact(s) to monitor compliance efforts and enforce practice standards; 

4) conducting appropriate training and education on practice standards and procedures; 

5) responding appropriately to detected violations through the investigation of allegations and the disclosure of incidents to appropriate Government entities; 

6) developing open lines of communication, such as discussions at staff meetings regarding erroneous or fraudulent conduct issues and community bulletin boards, to keep practice employees updated regarding compliance activities; and 

7) enforcing disciplinary standards through well-publicized guidelines.

    The final guidance identifies four specific compliance risk areas for physicians: 

1) proper coding and billing; 

2) ensuring that services are reasonable and necessary; 

3) proper documentation; and 

4) avoiding improper inducements, kickbacks and self-referrals. These risk areas reflect areas in which the OIG has focused its investigations and audits related to physician practices.

    The final guidance also provides direction to larger practices in developing compliance programs by recommending that they use both the physician guidance and previously issued guidance, such as the Third-Party Medical Billing Company Compliance Program Guidance or the Clinical Laboratory Compliance Program Guidance, to create a compliance program that meets the needs of the larger practice.

    The final guidance includes several appendices outlining additional risk areas about which various physicians expressed interest, as well as information about criminal, civil and administrative statutes related to the Federal health care programs. There is also information about the OIG's provider self-disclosure protocol and Internet resources that may be useful to physician practices."

   In October, 2000, the Committee on the Budget, U.S. House of Representatives, Waste, Fraud and Abuse Task Force Release Final Summaries, See Task Force on Healthcare that starts off by quoting Uwe E. Reinhardt, professor of political economy at Princeton University, stating in The Wall Street Journal (January 21, 2000) that "[T]he statutes and rules governing Medicare... now run the risk of becoming themselves a form of waste, fraud and abuse."  The following lists the Task Force's major finding on fraud measurement techniques in the Medicare Program:  

    The Task Force highlighted "two wasteful, burdensome regulations that do not even comply with the law" stated that "Considering Medicare is subject to more than 130,000 pages of regulations and supporting documents, further investigation is warranted." 

For physicians what can you do: 

    According to Bob Nobles, the Assistant Regional Inspector General for Investigations for the Illinois area, the two most common violations by physicians in Illinois are: (1) billing for services not rendered and (2) mail fraud - sending the bill or receiving payment by mail.  Nobles says that physicians now have to take an active role that billing clerks have the right kind of training and are not hired just because they are a cousin or need a job. Physicians need to spot check their bills, understand the billing and procedure codes, keep current in the business side of medical practice and not just the medical side.  Nobles advice to physicians is to "Expand the quality control on the business side and payback is to lose some anxiety."

    Many consultants recommend in addition there are other ways physicians can protect themselves such as to:  Delegate responsibilities wisely and be proactive - review regularly;  Implement Compliance Program - Beef Up Internal Controls; and Get involved - follow, be involved with new legislation.  Many doctors have a tough time documenting Medicare claims.  Before a Congressional Committee on Government Reform and Oversight some doctors told the congressmen that: Medicare regulations were taking over their lives; doctors were hiring extra staff to process claims; they were taking seminars on how to fill out forms, rather than learning new medical procedures; they were spending more time filling out forms and less time seeing patients.  Some physicians claim that they are practicing in fear and being intimidated with constant threats of heavy fines for noncompliance.  Doctors can find out what their associations are doing for them.

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