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A Renewed Focus on Compliance: Health Care Reform Measures, Increase Audit Scrutiny and More Reasons Why Compliance Matters!

It looks like the days of “voluntary” compliance programs for the health care industry are coming to an end. Specifically, Section 6401(a)(7) of the Patient Protection and Affordable Care Act (“PPACA” or the “health care reform bill”) included provisions mandating compliance programs as part of the Medicare enrollment process.

According to the health care reform bill, providers or suppliers within particular industries or categories, as yet unspecified, must have a compliance program in place as a condition of enrollment. Regulations will be issued which will specify the required elements of compliance, timelines and other details regarding implementation. Until the regulations are actually adopted, we will not know whether and when individual physicians will need to demonstrate that they or their group has a compliance program in place and what that compliance program must look like.

The concept of mandatory compliance is not new. For example, last year, New York providers, including physicians that meet certain financial thresholds with regard to Medicaid billing activity became subject to mandatory compliance obligations as a result of the New York Office of Medicaid Inspector General regulations. The New York regulations closely resemble the compliance program elements recommended by the Office of Inspector General (“OIG”) in its voluntary compliance guidance documents. It will not be surprising if the new federal regulations also closely mirror the compliance program guidance of the OIG.

Although the implementing regulations under the health care reform bill have yet to be issued, we are encouraging physicians and other health care entities to undertake a renewed focus on compliance activities. For those smaller health care providers who never formally implemented compliance, the time has come to make compliance a top priority. We say this not necessarily because of the health care reform provisions mentioned in this article but based on what we as health care attorneys have seen and experienced with health care providers who have been subject to the increased health care enforcement environment and the ramping up of audit activity. Specifically, we have been involved in defending numerous Medicare audits as a result of the Medicare Recovery Audit Contractor Program (RACs), Medicare Program Safeguard Contractor/Zone Program Integrity Contractor audits (PSCs or ZPICs), Medicaid audits and other payor audits. We have also seen an increase in investigative activity and the use of other enforcement tools such as prepayment utilization review. In many cases, the government overpayment demands are extremely significant as a result of the use of statistical sampling and extrapolation techniques utilized in the audit process. Furthermore, the health care reform bill strengthens the federal government’s ability to enforce the federal fraud and abuse laws, including by clarifying aspects the federal Anti-Kickback Law to the benefit of the federal government, requiring providers to report and return overpayments within tight timeframes, providing for the expansion of the Medicare RACs, and requiring the establishment of a national fraud and abuse data collection program.

Top 3 Compliance Tips
Given this health care environment, we recommend that physician practices begin to focus on compliance. Importantly, physicians can begin to proactively undertake compliance activities now without expending a significant amount of financial resources. For example, at a minimum, we recommend that physicians do the following:

1. Improve Documentation – Evaluate Current Documentation Standards and Increase Documentation: We cannot emphasize enough the importance of taking a critical look at your documentation. It is our experience that documentation issues comprise the main reason for overpayment demands made by Medicare or other payors. While physicians may truly believe that they are documenting enough information to support their services, the reality is that Medicare and other payor auditors expect and demand a much higher level of documentation. Given the increased audit and enforcement activity, physicians are well advised to critically evaluate their documentation standards and make improvements in this area.

2. Review and Stay Apprised of Applicable Medicare Local Coverage Decisions: In order to be in compliance, physicians must understand the playing field including knowing the rules that apply to the services billed by the practice. Physicians are responsible from a legal perspective to know the Medicare rules that apply to the services that they render. It is important that you regularly check the policies posted on the Medicare Carrier website to ensure that you are reporting and documenting services consistent with the published rules. You can access this information at www.WPSMedicare.com.

3. Monitor Billing/Coding Personnel: Physicians should understand that they are legally responsible for the services that are submitted to Medicare and other payors under their NPI numbers regardless of whether or not coding and billing responsibilities are delegated to others including billing companies or internal coders and billers. Thus, physicians must carefully monitor coding and billing performed by others to ensure that the services are being submitted in a compliant manner. In some cases, this may involve hiring experts such as compliance auditors to assist in identifying any areas of risk for the physician.

For more information or for any questions, please contact Abby Pendleton, Esq. or Esq. at (248) 996-8510, or visit the HLP website.

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