From complex coding requirements to strict patient referral rules, physicians are scrambling to avoid entanglements in a broad net of federal, state, and commercial payer requirements. Get ideas on how you can help protect your practice. For more resources and information: http://sites.mckesson.com/practiceconsulting/kc_coding.htm

1. Compliance Programs
A Critical Safeguard for
Physician Groups
By Bess Ann Bredemeyer, BSN, RN, CHC, CPC, PCS
Practicing medicine has become increasingly difficult for many
physicians, thanks to an ever-expanding web of healthcare
rules and regulations. From complex coding requirements to
strict patient referral rules, physicians are scrambling to avoid
entanglement in a broad net of federal, state and commercial
payor requirements.
The stakes are high. Federal law Comprehensive Compliance
enforcement efforts have become Programs
more aggressive as the volume of To protect themselves in this
rules has increased. Highly publicized unforgiving environment, a growing
cases involving fraud – along with number of physician groups are
soaring healthcare costs – have fueled creating comprehensive compliance
suspicions from both regulators programs. These programs help ensure
and the public about the intentions an organizational commitment to
and integrity of many provider compliance while offering a systematic
organizations. means for monitoring, understanding
and complying with specific rules and
For those organizations found to have regulations.
intentionally violated the law, the
penalties can be catastrophic. Large Compliance programs have the
fines, exclusion from participation in added benefit of mitigating fines and
state and federal insurance programs penalties if a violation is found by a
and even prison time all are potential regulatory agency. When a violation
remedies for mistakes the government is identified, regulators generally are
deems to be fraudulent in nature. more willing to give the offending
organization the benefit of the doubt
if a compliance program already is in
place and operational.
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2. Moreover, by helping ensure the Services (CMS). OIG enforcement are frequently most familiar with
submission of clean and timely claims, efforts are conducted through audits, regulations affecting coding, billing
a well-designed compliance program investigations and inspections. and reimbursement.
can speed payment and reduce billing
errors and denials. In today’s climate As part of its mission, the OIG Identifying the Risks
of flat or falling reimbursements, publishes guidelines for establishing With leadership in place, the next task
optimizing revenues arguably is just voluntary compliance programs is to identify and prioritize risks facing
as critical for physicians as reducing for different kinds of healthcare the organization. For physician groups,
regulatory exposure. organizations. These guidelines offer a areas of highest risk typically include
framework for creating a program that coding and billing, reasonable and
Many physician groups that rely on incorporates elements the OIG deems necessary services, documentation and
an outsourced vendor for their billing essential. In late 2000, for example, improper inducements, kickbacks and
services erroneously believe the the OIG published OIG Compliance self-referrals.
vendor’s compliance plan fully protects Program for Individual and Small
and indemnifies the practice against Group Practices. One of the best ways to define risk is
regulatory problems. Although the to become familiar with the current
vendor’s program may serve as an Although some compliance specifics activities, plans and policies of the
important safeguard, in the eyes of will differ depending on the physician’s HHS OIG. Each fall, the OIG publishes
regulators, it is no substitute for a plan specialty and the organization’s areas a document called the Work Plan. The
that is designed and managed by the of highest risk, the guidelines offer Work Plan provides a detailed roadmap
group. an ideal introduction to the overall of the areas and topics the OIG will be
subject and detailed suggestions for focusing its enforcement efforts on in
Making the Commitment creating an effective program. The the coming fiscal year. The document is
It is important to remember that model compliance programs can
creating a viable compliance program found at www.oig.hhs.gov/fraud/
requires a commitment of both time complianceguidance.html.
and resources, whether the initiative is
developed internally or with the help
of an outside expert. Essential Program Elements
This commitment must be sustained Designating a Leader
once the program is completed to One of the first steps in creating
ensure effective implementation a viable compliance program is to
and genuine buy-in throughout the designate an individual who will have
organization. A plan that looks perfect primary responsibility for overseeing
on paper but gathers dust on a shelf the creation, implementation and
is hardly worth the effort required to operation of the initiative. This
create it. In fact, it can be counter- person may be a physician with an
productive. Federal investigators take interest in compliance or perhaps an
a dim view of inactive compliance office manager. Whoever is selected, organized by type of healthcare service
programs, since regulators may the person should be trustworthy, and offers a wealth of information
logically assume that the plan was respected and have enough authority about the specific kinds of regulatory
created for show only. In addition, they to ensure proper implementation and scrutiny provider organizations can
will hold an organization accountable execution of the program. expect. A careful reading of the Work
to its own standards, even if those Plan will give compliance directors
standards are not operational and Those who should not be considered
for compliance leadership are invaluable insight regarding aspects of
even if they exceed the government’s their practice that may attract scrutiny
requirements. individuals who are intimately involved
in the financial aspects of the practice. in the months ahead. The Work Plan
While these persons may have the can be found at http://oig.hhs.gov/
OIG Compliance Guidelines
necessary skills, the perception of publications.html.
A useful place to begin when
developing a compliance program is a conflict inevitably will arise if the Another way to evaluate for potential
with the guidance published by the same individual or department is risks and staying abreast of industry
Department of Health and Human responsible for both reimbursements activities that may potentially affect
Services’ Office of Inspector General and regulatory compliance. your practice is to read advisory
(OIG). The OIG is responsible for opinions published by the government
enforcing laws and regulations That said, it is important that the
billing manager or chief financial as well as updates published by CMS
involving all HHS divisions, including and your Medicare Carrier on their
the Center for Medicare and Medicaid officer play a central role in developing
the compliance program, since they respective Web sites. Commercial
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3. payors will also frequently publish - Discount arrangement After initial training is completed,
potential issues on their Web sites. - Credit balances mandatory refresher courses for both
Advisory opinions published by the general and position-specific training
HHS OIG can be found at www.oig. Training and Education should be offered at least once a year.
hhs.gov/fraud/advisoryopinions.html. Creating training and educational
initiatives for individuals within the Monitoring and Auditing
Policies and procedures organization – including physicians, Tracking or monitoring the efficacy of
Policies and procedures are the billing managers, coders and office a compliance program is accomplished
heart of any compliance program. managers – is next. Training should through regular assessments of work
Generally speaking, policies need to be be developed along two tracks: products and processes. For example,
constructed around specific risk areas. Comprehensive training that includes a supervisor in the billing area could
Clearly defining appropriate procedures general regulatory guidance for pull 10 bills each week to ensure that
and protocols for those aspects of the new and existing employees, and all data fields were properly completed,
business subject to regulatory authority specialized training for unique the diagnoses were appropriately
is critical to successful compliance. job positions and roles within the linked and the information entered
Compliance directors can utilize the organization. matched the charge document
OIG Work Plan, Model Compliance completed by the physician. From this
Guidelines and the appropriate CMS An example of a comprehensive process, areas of deficiency will be
regulations to craft specific rules training topic would be educating readily apparent. These deficiencies,
regarding employee or physician physicians and staff about the in turn, can become the focus of a
performance and expectations. appropriate use of the Advanced more formal and comprehensive audit
Beneficiary Notice (ABN), a Medicare process.
Some examples of policies that should document used to inform patients that
be defined include: a particular service may not be paid Audits provide valuable snapshots of
- Privacy and confidentiality for by Medicare and as a result may be overall compliance performance. It is
the patient’s financial responsibility. An frequently worthwhile to conduct a
- Record retention preliminary or baseline audit before
example of a position-specific training
- Practice standards topic would be educating coders the compliance program is initiated
about the correct use of Modifer 25, a to gain additional insight into specific
- Coding and billing processes
coding designation used to ensure that risk areas and vulnerabilities. Like
- Documentation compliance programs themselves,
a particular office visit is considered
- Standards of contact as “a significantly separate service” audits need to reflect the
from other procedures performed on organization’s highest-risk activities.
- Financial policies
the same patient the same day and
therefore can be billed separately.
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4. Enforcement and Discipline Organizations that take complaints About the author:
Compliance directors should also seriously, thoroughly investigate Bess Ann Bredemeyer, BSN, RN,
formulate clear policies that outline questionable actions and promptly CHC, CPC joined McKesson in
specific consequences for employees act to mitigate violations once they
2005 and is Director of Compliance
who fail to meet or adhere to defined are identified will create a culture of
standards or procedures. heightened compliance awareness Services, responsible for consulting
throughout the organization. services related to physician coding
Disciplinary programs should be and compliance practices. She has
progressive in nature and be linked to An Ounce of Prevention more than 22 years of healthcare
appropriate remedies, ranging from In today’s healthcare environment,
experience and was previously the
additional training and education to regulatory mistakes can enormously
transfer, suspension and termination. damage an organization’s finances Compliance and Privacy Officer for
and reputation. It is therefore critical a large academic health science
For example, if the baseline audit that physicians establish, execute and center. Bredemeyer has also worked
reveals that a specific provider is sustain compliance programs that with healthcare defense attorneys
making significant and/or repetitive effectively address high-risk regulatory
documentation errors, then that and physician state licensing boards
areas. These programs will mitigate
provider should be informed of the providing coding, compliance, billing
compliance risk and also help build
problem and his or her performance good will with regulators. In addition, and privacy consulting services. She
should be included as part of a follow- they can help streamline revenue cycle has guest lectured at physician forums
up audit. If necessary, re-training operations and improve cash flow. and residency programs, and she has
should be provided. If the problem
taught graduate classes including
persists, additional training should be This article is the first in a series of
mandated, along with a requirement three articles by Bredemeyer on health law and physician practice
that the provider reimburse the compliance and physician practices. management. Bredemeyer received her
group for the cost of audits and Bachelor of Science degree in nursing
in-service. A letter of reprimand and chemistry from Texas Christian
may also be appropriate. Continued University in Fort Worth, Texas. She is a
difficulties could result in suspension or
certified professional coder (CPC) and
termination.
member of the American Academy
Mitigation and Prevention of Professional Coders (AAPC) where
The success of any compliance she has held several senior positions
program ultimately depends on the including local chapter president. She
extent to which the organization is
is an active member of the Health Care
committed to actively identifying and
resolving regulatory problems. One Compliance Association and is certified
way to build this commitment is to in healthcare compliance (CHC).
create channels of communication that
allow employees, business partners
and others to easily convey regulatory
concerns to the appropriate individual
or department without fear of penalty
or retaliation. Anonymous hotlines are
useful tools in this regard.
McKesson Provider Technologies
5995 Windward Pkwy. www.mckesson.com/practiceconsulting
Alpharetta, GA 30005 1.800.789.6409
Copyright © 2007 McKesson Corporation and/or one of its subsidiaries. All rights reserved. ART601-11/07
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