Mid-Atlantic Health Law TOPICS

On June 7, 2000, the Office of the Inspector General of the Department of Health and Human Services (OIG) issued a draft compliance guidance for physicians to prevent fraud and abuse in government health programs, including Medicare and Medicaid.

The draft, entitled Draft OIG Compliance Program for Individual and Small Group Physician Practices, sets forth the elements that physician practices should consider when developing and implementing such a compliance program. Comments on the draft were accepted by the OIG through the end of July, and a final version of the guidance is expected this fall.

The guidance is intended to assist physician practices in developing and implementing internal controls and procedures to promote compliance with statutes and regulations that are applicable to federal health care programs as well as private insurance requirements.

The draft describes how individual and small group physician practices can voluntarily establish internal controls to prevent fraud and other improper activities. The guidance is not mandatory or binding; moreover, it is not intended to be the exclusive guidance as to what should be considered by physician practices when implementing a compliance program.

A. Benefits of Implementation

Benefits from implementing an effective compliance program likely include improved medical record documentation, a reduction in the denial of claims, the avoidance of potential liability arising from non-compliance, and reduced exposure to penalties. Specifically, an effective compliance program should make it easier for a physician practice to ensure the accuracy of claims submitted for reimbursement — hopefully resulting in prompt claim reimbursement.

Compliance programs not only help to reduce fraudulent or erroneous claims, but they also show that the physician practice is making a good faith effort to comply with appropriate laws and regulations. Also, a formal compliance program sends a message to the practice's employees that while mistakes may occur, the practice will not tolerate intentional fraud, and further that employees have an affirmative obli-gation to report any fraud and erroneous errors so that they can be corrected.

B.    Areas of Greatest Risk

The OIG has identified the following poten-tial risk areas which should be the focus of compliance programs: (1) billing for items or services not provided; (2) submitting claims for equipment, medical supplies and services that are not reasonable and necessary; (3) double billing; (4) billing for non-covered services as if covered; (5) knowing misuse of provider identification numbers, which result in improper billing; (6) billing for unbundled services; (7) failure to properly use coding modifiers; and (8) upcoding.

C.    Core Elements

The draft guidance recommends that a physician compliance program contain seven core elements, namely: (1) implementation of written policies; (2) designation of a compliance officer or contact; (3) comprehensive training and education for employees; (4) accessible lines of communication; (5) internal monitor¬ing and auditing; (6) enforcement of standards through well-publicized disciplinary guidelines; and (7) prompt corrective action when offenses are detected.

D.    Big vs. Small Groups

It is evident throughout the draft that the OIG recognizes that solo and small group physician practices may not have the resources to address every element of the guidance. In that regard, the OIG offers flexible suggestions as to how to best implement a compliance program while restricted by limited resources.

For example, while a solo or small physician practice may not be able to establish a confidential hot line to receive complaints, the practice likely could implement an "open door" policy so that employees can report compliance concerns.

The OIG has also suggested that larger physician practices use both the physician com-pliance program guidance along with previously issued OIG guidance, such as the Third-Party Medical Billing Company Compliance Program Guidance and the Clinical Laboratory Compliance Guidance, to create their compliance programs.

E.    How to Get Started

As a starting point in developing a compliance program, physician practices should review the draft physician compliance program guidance - in particular because the guidance includes several useful appendices, including one describing basic information about criminal, civil and administrative statutes related to federal health programs. The physician compliance program guidance is available at the OIG's website.

Robin J. Siegel
(410) 576-4166 • rsiegel@gfrlaw.com