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Fall 2008


Planning for Compliance

Abby Pendleton, Esq., and Adele Jorissen, Esq.
Wachler & Associates, P.C.

Most physicians understand that in order to do business in the health care marketplace today, compliance is important and necessary. One key component of compliance involves an appreciation of the rules of engagement for submitting claims to federal and state government programs, including Medicare and Medicaid, as well as other payors. Although many possibilities exist for developing a compliance approach for physician practices, this article will discuss the seven elements provided by the Office of the Inspector General (the “OIG”) in its 2000 publication, Compliance Program Guidance for Individual and Small Group Physician Practices. The seven step plan is neither mandatory nor an all-inclusive discussion of compliance. Rather, it operates as guidance for physician practices when creating and implementing a compliance program.

Auditing and Monitoring

Physician practices are advised to implement an ongoing evaluation process to determine whether the practice’s standards and procedures are current and accurate, whether the compliance plan is working, and whether bills and records comply with applicable requirements.

Establishing Practice Standards and Procedures

In addition to implementing an audit process, physician practices should create written practice standards and procedures to address specific risk areas, such as coding and billing, reasonable and necessary services, documentation, and improper inducements. For example, anesthesia practices may consider drafting policies regarding documentation of medical direction services and documentation regarding anesthesia start and stop time. Similarly, those practices that provide chronic pain services are well advised to establish internal documentation policies.

Designating a Compliance Officer/Contact

Physician practices are advised to designate an individual (or individuals) to act as the compliance officer or contact. The OIG suggests the following duties for the compliance officer(s): (1) oversee and monitor the implementation of a compliance program; (2) establish methods to improve the practice and reduce vulnerability to fraud and abuse; (3) periodically revise the compliance plan; (4) develop, coordinate, and participate in a compliance training program; (5) ensure that employees, staff, and independent contractors are not excluded or debarred from federal programs; and (6) investigate reports and allegations concerning unethical or improper practices and monitor corrective action.

Conducting Appropriate Training and Education

The OIG Guidance suggests that physician practices conduct compliance education and training. The key to enhancing compliance for most physician practices is to focus education on specific risk areas for the specialty. For example, anesthesia practices should focus education on such areas as the seven elements of medical direction, definition of anesthesia start and end time, and other anesthesia specific billing areas.

Responding to Detected Offenses and Developing Corrective Action Initiatives & Enforcing Disciplinary Standards through Well-Publicized Guidelines.

The OIG Guidance discusses the importance of responding to problems and developing a corrective action plan. Every physician practice that conducts compliance audits must be prepared to address the results of the audit. Identifying potential problems but ignoring those problems or failing to take any efforts to address the problems can create significant legal exposure for a practice. Depending on the issues that arise in the audit and the facts and circumstances, corrective action could include without limitation: (1) educating or re-educating providers and billing staff; (2) developing policies and procedures that set forth pertinent information with regard to the requirements for billing certain procedures and codes; and/or (3) determining whether a particular identified problem reflects a pattern of past billing problems that may have to be corrected, refunded or otherwise addressed.

There are times when a physician practice must make important decisions as to how to handle issues or problems that are identified in an audit or otherwise. It is important for physicians to have legal counsel and advice when addressing these sensitive areas.

Developing Open Lines of Communication

According to the OIG, having open lines of communication is an integral part of implementing a compliance program. Such a system for open communication may include any or all of the following: (1) a requirement that employees report conduct that a reasonable person would believe to be erroneous or fraudulent, and that a failure to do so is a violation of the compliance program; (2) a process for effectively reporting misconduct; (3) a procedure for processing reports of noncompliance; and (4) a process for maintaining the anonymity of the person reporting misconduct.

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