Compliance Plan…Sure, but what’s in it for me?

By Robert E. Perry, Esq.

Any Chiropractor who has had the misfortune of being called before the Board of Registration of Chiropractors already knows the value of a good documentation.  If you didn’t have a Compliance Program in place before your Board appearance, you have one now.  But what about the Chiropractor who up until now, has never  had an issue with the Board?  Their practice seemingly has been running for several years and (knock on wood) has been getting along “just fine” without a compliance plan in place.  Sure, everyone suspects that health care reform will bring change, but if the practice hasn’t encountered difficulty up until now does it really need to go through the time and expense of implementing a compliance plan now? What can a compliance plan really do for a practice?

The first obvious answer is that in not so distant future you may not have a choice. The law would appear to require a plan for every Chiropractic practice.  Sections 6401 and 10603 of the PPACA and Section 1304 of the HERA require that all providers, including physicians, and suppliers must adopt compliance plans as a condition of enrollment in the federal health care programs. (Patient Protection and Affordable Care Act §§ 6401 and 10603. Health Care and Education Reconciliation Act § 1304.)  The Secretary of HHS and the OIG are directed to develop the core elements of the compliance plans for each type of provider and supplier.31 Once HHS and the OIG publish the necessary guidance for these compliance plans, physician practices should take this opportunity to re-evaluate their current compliance plans to ensure that they fulfill the requirements set forth in the guidance. If a practice currently has no compliance plan, it should immediately seek to develop one in accordance with said guidance. Due to the myriad of health care regulations, and the steep penalties for simple violations, a compliance plan should be an essential part of any physician practice.

 Since the Office of Inspector General (“OIG”) released its “Compliance Program Guidance for Individual and Small Group Physician Practices” back in September of 2000, the idea that a small or solo practice could still “fly under the radar” has been reduced.  While the OIG recognizes the revenue differences between a hospital, a large, multi-specialty practice and a small practice, these guidelines clearly served notice that the Feds expected all to participate in compliance efforts.  With this release, the OIG made it clear that even a solo practice could and should begin to adopt at least some of these guidelines into their practice on a volunteer basis (Federal Register, Vol 65, No. 194, Thursday October 5, 2000). 

As all chiropractic “facilities” are acutely aware, The Board of Registration of Chiropractors mandates the implementation and maintenance of a compliance plan.  (233 CMR 5.02(8)

Beyond appeasing “big brother”, there are many other ways in which a compliance plan can actually benefit a practice.  According to the OIG, voluntary compliance programs offer many benefits to a small practice (www.oig.hhs.gov/reports).  At The Law Office of Frank E. Biedak, P.C. it has been our experience that compliance plans, once implemented, start to return

benefits to a practice almost immediately.  The Federal Sentencing Guidelines suggest that practices prioritize its compliance risks and implement a plan accordingly.   For our chiropractic clients, we generally focus on:

Documentation/Coding/Billing:  A good compliance plan is routed in the education and training of all staff responsible for billing.  Where some plans fall short is that they fail to continue the training with new employees or even update training with existing ones.  Increased billing efficiency means faster payments, fewer mistakes and reduced denial rates.  All of this adds up to increased cash flow, something every business can benefit from.  Better billing practices also reduces the chance of having an audit or at least greatly improves your chances coming through favorably.

As every health care “consultant” and billing practice should now be aware, the Board of Registration mandate that chiropractic “facilities” complete audits (233 CMR 5.02(8)(c ) ; however, the timing of these audits, and how they are conducted might be more critical than ever.

PPACA (Patient Protection and Affordable Care Act) mandates the timely return of identified overpayments.  In fact, FERA,

(Fraud Recovery and Enforcement Act of 2009 § 4(b)(3), Pub. L. No. 111-21, 123. Stat. 617, amending 31 U.S.C. § 3729), takes it one step further and defines said overpayments as “obligations” as that term is used in the False Claims Act (FCA), and as amended by FERA.  What this may mean to the provider community is that the failure to timely return overpayments could result in an obligation that could subject the provider to the Government as “reverse false claims” and subject you to the FCA’s standard treble damages and penalty provisions. With changes in the law, when a practice performs “audits,” for whom said audits are performed, and what is done with the findings of the same are serious questions for Massachusetts chiropractors.

The issues of documentation, coding and billing are tied directly to payment.  These issues are also directly connected with the State’s Insurance Fraud laws because insurers have statutory protection to report suspected fraudulent providers to the Board.  At the Law Office of Frank E. Biedak, P.C., we have represented providers who have entered the quagmire of Board scrutiny after an auto insurer’s Record Review, or IME. Unlike years ago, when very few lawyers were involved in “PIP Recovery,” today numerous, lawyers and consultants profess to be expert in challenging these insurance company tactics.  Only the foolish go into this “game” blindly because reckless litigation against auto-insurers can have serious backlash to the provider. Knowing when to challenge an insurer, when to seek compromise, and when to realize that a claim has failed and not to pursue the auto insurer is vital to a practice and its providers.  Having represented  numerous chiropractors in both PIP collection matters and in front of the Board, I can tell you that winning a $2,500.00, PIP case pales in comparison to having to defend an Order to Show cause arising from an insurance adjuster’s frustration that a particular chiropractor’s law suits have increased their caseload.

Operational: While tied to billing, the operational side of the practice benefits tremendously from compliance plan implementation.  Improved documentation means more accurate and more consistent patient records, quicker payments from insurance companies, fewer denials by insurance companies.    According to the OIG, all of this adds up to improved patient care.

As a former Director of Medical Records, understanding the complicated areas of HIPAA, and HITECH, release of information, and the smooth transition to filing protected health information, i.e., your medical records are all critical elements to the success of your practice.

Legal Risk:  A sound compliance plan examines all areas of the practice from patient intake to discharge and beyond.   Ongoing self monitoring of the day to day operations, once a plan is in place, reduces the exposure any practice has to the legal pitfalls that are all around. Understanding such complicated issues as Anti-Kickback, Stark, relationships with Designated Health Services’ providers, the Federal and State False Claims Acts, are all critical in providing our clients with the comfort that goes along with ongoing legal support.

A Word of Caution Regarding “Plans” – One Size Doesn’t Fit All:

The Federal Sentencing Guidelines provide relief for an entity convicted of a crime when that practice or practitioner has implemented an effective compliance plan. In determining the amount of any fine, the Guidelines would require a Court to determine a “culpability score” that is reduced by the presence of an effective Compliance Plan.   The problem is that the culpability score is increased if the practice does not have one, and problems further arise if the practice has a compliance plan that simply sits and collects dust.  The OIG has actually published that having a plan and letting it “collect dust” is even worse than not having such a plan.  Let that be a word of caution to all small practices that have a Compliance Plan from a consultant, or firm that contains hundreds of pages of policies and procedures that will never, ever be read, yet alone understood and actively used.

Hospital Board of Trustees and Administration Under the Gun?

The State’s Attorney General is now investigating whether Beth Israel’s President, Paul Levy acted properly, and whether the Non-Profit’s Board of Trustees handling of the same was consistent with its duties under the law. Specifically, Attorney General Coakley is to investigate whether the nonprofit hospital broke any state charitable-funds laws during the incident.

While this matter needs to be fully reviewed, it does raise the general question of accountability and transparency in our State’s Non-Profit hospital s.  Aaccountability and transparency cannot be a quaint notion or buzz-line for our State’s non-profit hospitals.  Public records indicate that “non-profit” leaders make millions annually.   The Boards of these institutions have a fiduciary duty to their institutions, not their high powered administrators.  If healthcare is truly to reform itself, questionable conduct by high level administrators need to be dealt with swiftly and with severe sanctions to all having knowledge of the same.

In fact, in 2007, The State’s Attorney General published its Guide for Board Members of Charitable Organizations.   The Attorney General warned Board Members against contracting with their hospital, (ex. Leasing property to a health system to build a physician practice area, or Rehabilitation Center, or Cancer Center), and advised Board Members to pay close attention the finances and to requests, receive and carefully look over information concerning the organization.

The Attorney General reminded Board Members that The law imposes upon then two primary duties: the duty of care, and the duty of loyalty. The duty of care means that each Board Member  must act with such care as an ordinarily prudent person would employ in your position. The duty of loyalty means that you must act in good faith and in a manner that you reasonably believe is in the best interest of the

organization. 

If the Attorney General actually reviewed the Board’s of our Commonwealth’s Hospitals and Health Systems, how many would pass those mandates?

Implementing Internal Controls Can Save Practice’s Reputation and Help Bottom Line

A former administrator of a 12 physician practice was terminated years ago for suspected theft.  The former administrator of Pediatric Center in Glen Alle, VA, was charged with mail fraud and aiding and abetting and pled guilty in January 2007.  She was sentenced to 15 months in prison, 2 years supervised released and ordered to pay back close to $100,000.00, in restitution.

The new administrator has implemented increased controls, and oversight to prevent the same

According to data from the Association of Certified Fraud Examiners, it is estimated that some $990 billion is lost each year to employee fraud nationally. Close to 50% of all known events occur when an employee steals cash receipts either before or after they were recorded on the practice’s books.  The Medical Group Management Assoc. states that the median amount of theft in a practice was $5,000.00, over an 8 months period of time. Small practices are susceptible to such abuse because they operate with few employees and that over time, a trust is built that tends to restricts proper operational checks and balances.

Problems occur because by and large, physicians want to practice medicine and spend less time managing their business affairs.  It is important for physicians to ensure that there are proper checks and balances.  The person who processes invoices should not apply payments.  The person responsible for bank deposits or paying bills should have a different individual reconciling the books.  Even this becomes difficult in smaller practices that have one, or two individuals performing “accounting duties.”

The importance of monitoring is critical to protecting a practice’s assets. In smaller practices the culture is one of trust.  It is important that employees involved in the monitoring, and those performing the day-to-day tasks understand that the functions are there to protect the practice.  A company can thrive when all employees act in the “best interests of the practice.”  Surprise mini-audits, cross-training and even implementing a hot-line for employees to anonymously tip-off suspected conduct are key items for a practice to consider.  After a surprise audit, involved staff know that “big brother” is watching over them and the likelihood of such conduct wanes.

 A difficult issue for practices is that employees who appear to be the most trustworthy are sometimes the ones who end up stealing money.    This issue, often borne in the culture of trust, and a longing to avoid confrontation, can make it difficult for practices to identify the culprit.

Some common indicators include extreme personal financial problems, lavish purchases that appear to be beyond one’s means, disgruntled employees, employees who seek control and rebel against those questioning their authority, and those who work odd hours or seldom take vacations.

Physicians need to be aware of these issues and obtain professionals to assist them as necessary.

Watch Those “Discount Plans:”

Federal and state law enforcement agencies are working together to crack down on fake “medical discount plans.” These purported plans often  target the uninsured with the promise of cut-rate health coverage and services.

The Federal Trade Commission, along with state attorneys general and insurance commissioners in 24 states have filed over fifty suits and regulatory actions to stop these scams. The charges include peddling sham insurance, conducting illegal robocalls and fax blasting.

In three cases, companies have been charged with deceptively marketing medical discount plans. These companies are the Consumer Health Benefits Association, Health Care One and United States Benefits. The lawsuits against the three companies were filed in New York, California and Tennessee, respectively. In all three cases, the companies allegedly charged consumers an enrollment fee for fake healthcare-related discounts, and then did not allow customers to disenroll.

“With so many Americans struggling to deal with the costs of healthcare, these medical discount benefit plans sound appealing because they masquerade as health insurance,” said David Vladeck, director of the FTC's Bureau of Consumer Protection, in a statement.

It goes without saying that physicians, chiropractors, rehab. Professionals should always look at health insurance plans closely.  Look at all plans, but remember, if it seems too good to be true, it just might be.   Do not hesitate to contact counsel, the Attorney General, the State Insurance Commission to inquire as to the legitimacy of a purported insurer.  Do not let your practice, or your patients become prey to these illegal programs.

Press Conference on Health Care Fraud and the Affordable Care Act

May 13, 2010

Washington, DC

Good afternoon.  Thank you all for joining us.

I’m glad to be joined today by Attorney General Holder and members of our department’s senior leadership to provide an update on our efforts to stamp out waste and fraud in our health care system, protect consumers, and safeguard taxpayer dollars. 

As the Affordable Care Act has kicked in over the last few weeks, Americans around the country have been getting some long overdue good news about health care.

Small businesses have been notified that they’ll be receiving tax credits to help them provide health care coverage for their employees. 

Young adults have learned they’ll now be able to stay on their parents’ health insurance plans until they turn 26.

And seniors who have fallen into the prescription drug donut hole are looking forward to rebate checks next month that will help them afford their medications.

Slowly but surely, Americans are getting more control over their health care.  A more consumer-friendly market for health insurance is starting to take shape.

Unfortunately, just as the future of our health care system is looking brighter, we’re hearing reports of criminals trying to exploit these changes.  In states like Delaware and Wyoming, we’ve heard that scam artists are calling up seniors and telling them they need to share their Medicare ID numbers in order to get the law’s new benefits.  In other states, seniors have been asked for personal information in order to get their new “Medicare ID cards.”

These are old crimes with a new spin.  Every year, Medicare, Medicaid and private insurance companies each pay out billions of dollars in fraudulent claims.  To cover these claims, we all pay what amounts to a health care fraud tax in the form of higher premiums. 

Now, some of these criminals see health insurance reform an opportunity to launch new schemes.

My message to them today is this: there has never been a worse time to try to steal Americans’ health care dollars.

What these criminals may not know is that the Affordable Care Act is not just about making our health insurance system work better for families.  It’s also contains some of the strongest anti-health care fraud provisions in American history.

Under this new law, we’re going to attack fraud at every stage of the process.  First, we’re going to strengthen the screenings for health care providers who want to participate in Medicaid or Medicare.  The days when you could just hang a shingle and start submitting claims are over.

Next, we’re going to make it easier for law enforcement to see health care claims data from different government agencies in one place.  Under the old system, it was as if police officers in one town weren’t talking to the officers in the next town over.  Giving law enforcement agents access to the big picture will help them identify suspicious patterns in claims data that can indicate fraud.

Third, we’re going to increase the penalties for fraud.  When you commit Medicare or Medicaid fraud, you’re stealing from every US taxpayer and you should be punished accordingly.

Fourth, we’re going to provide new resources to get more boots on the ground to fight fraud in communities across the country – altogether, we’re adding an extra $600 million over the next ten years.  When experts have studied our anti- fraud programs, they’ve found that they actually pay for themselves in money returned to taxpayers – often may times over.  That means going after fraud is one of the best investments we can make.

These are just a few of the anti-fraud provisions in the Affordable Care Act.  Added together, here’s what the changes look like from the perspective of a potential criminal: it will be harder to submit false claims; you’re more likely to get caught if you do; and when you get caught, you’re going to get a much tougher punishment.

That’s a big deterrent.  And that’s why we believe the Affordable Care Act will not only allow us to identify and prosecute more episodes of health care fraud – we believe it will also help us prevent fraud from happening in the first place.

What’s going to make these steps even more effective is that we’re building on a strong foundation.  Over the last 15 months, the President has led a push to fight fraud and strengthen program integrity across the government.  This January for example, Attorney General Holder and I hosted the first ever National Health Care Fraud Summit.  For the first time ever, we brought together government, law enforcement, and private insurance companies to share their best strategies for fighting fraud.  Out of that conversation, we developed a list of next steps that we are already following up on.

The Fraud Summit was made possible partly by the great progress we made in 2009 with the creation of our joint HHS- DOJ HEAT Task Force.  This first-time-ever Cabinet level partnership between HHS and DOJ has led to vastly improved coordination of our anti-fraud efforts across government and the addition of new Medicare fraud strike force teams in health care fraud hubs like Detroit and Houston.  To learn more about this agenda and our results, I encourage you to visit our website www.stopmedicarefraud.gov.

Today, our department and the Justice Department are releasing a report to Congress that shows just how impressive those results have been. 

Some Facts About “Fraud” and Healthcare Reform

 The revisions include considerable expansion to the government's authority under the federal False Claims Act.   Providers must be cognizant of these changes and be sure that they have an effective compliance program.

The new laws require providers to promptly return funds that were improperly reimbursed to them.  Overpayments must be returned to the Government within sixty days of discovering the same.  The law suggests that retaining funds that were overpaid may create liability under the False Claims Act.  In order to avoid Government scrutiny, possibly severe penalties and the accompanying loss of reputation in the community, providers need to be fully aware of their obligations under the law.

The connection between the FCA and the AKS (Anti-Kickback Statute) has been furthered through Reform.  AKS violations (eg. Fees for referrals, certain marketing techniques and possible even reductions and rebates) no longer require the Feds to prove that the provider had specific intent to break the law. This could further the scrutiny providers are under. One can see where the lowering of the Government’s burden, coupled with the increasing funds to be placed in the areas of Fraud and Abuse, could lead to the “perfect storm” for uninformed providers.

It is not all “doom and gloom.” For the first time, CMS will have the authority to develop regulations for the disclosure of potential violations of Stark laws that would permit the allowance of reduced repayments to the Government.  It is likely that this provision could decrease litigation and encourage quicker resolutions of questionable claims.   

HELPFUL HINTS IN DEFENDING AGAINST RAC AUDIT FINDINGS.

Recovery Audit Contractors (RACs) are here to stay, and with President Obama assigning more funds into the “fraud and abuse” areas, every provider is going to need to become familiar with these missionaries.

1.      Develop and implement a written Compliance Program, and conduct routine audits to pro-actively identify potential defects.   Remember, the RACs “eat what they kill,” so don’t be a low-hanging fruit! (medical necessity, coding concerns, and duplication of services are three critical areas)/  Ensure that records are complete and coding is accurate BEFORE you are audited.

2.      Prepare in advance by identifying key team members to be on the audit team. This could be the lead coder(s), accountant, compliance officer, CFO. Assign specific tasks to each individual.

3.      Print out the OIG’s Annual Work Plan, and visit its Web-site.  Note that the RACS must list their targets here as well!

4.      Stay current and connected, learn from providers that have had the misfortune to be “RAC’d.”

5.      If reviewed, copy all materials received immediately, including the envelope with the date stamp.  Assign a trusted staffer to be responsible for tracking deadlines. Also copy any and all documents, records sent to the RAC.

6.      Education. DO you have copies of Medicare Policies, National Coverage Decisions, Local Coverage Decisions, articles, bulletins?  If not, assign one person to prepare a library of the same.

7.      Involve counsel early in the process.  In fact, given the recent changes in the False Claims law, (mandate to promptly return overpayments) I might suggest asking counsel whether he/she would recommend such a review, and if so, possibly having the same by counsel in his/her analysis.

8.      If the RAC uses a “statistical sampling” methodology to assess financial exposure, immediately retain a qualified statistician.   Extrapolating data is not always a strength of the RACS and a mistake can costs you dearly.  “Don’t be penny-wise and pound-foolish.” 
9. Get copies of and consider having at least one team member become familiar with the rules on statistical sampling Ch. 3 of the Medicare Financial Management Manual and Section 3.10 of the Medicare Program Integrity Manual. 

9.      Be smart in appeals.  Time and resources need to go into every claim appealed.   Challenge only those claims where you think there is a legitimate reason for the bill/service. In short, if your opinion is consistent with the RAC’s finding, i.e., payment was improper, resolve it!

10.   Remember, your practice is yours!   If an Auditor shows up unannounced, you have no obligation to open your office to them.  Refer them to your attorney and let him/her established a date and time for the review.  You want to be professional and courteous at all times; however, the RACs get paid on a contingency basis, they are solely driven to recoup dollars for the Government so that they get paid more!  

       11. Repeat after me... THE RACS AND THEIR STAFF ARE NOT YOUR FRIENDS!

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