Draft Compliance Program Guidance

By Gregory J. Naclerio

On June 7, 2000, the Office of the Inspector General for Health & Human Services issued a DRAFT Compliance Program Guidance for Solo and Small Group Physician Practices.  The goal of this document is to have physicians adopt a plan to establish internal controls and procedures designed to “promote adherence to statutes and regulations applicable to Federal health care programs and private insurance program requirements.”  Thus, the solo and small group practices have joined labs, hospitals, billing companies and nursing homes in receiving the Government’s “suggestions” on how to avoid violating the law.

As this Compliance Guidance is still in draft form, physicians are encouraged to read the Guidance and submit their comments to the OIG.  Clearly, the OIG would benefit greatly from the real world insight of the small practitioner.  Moreover, as you will be “encouraged” to adopt such a program, items which are onerous in nature need to be brought to the attention of the OIG.  To obtain a copy of the draft Guidance go to www.hhs.gov/oig/new.html.

In addition to the Draft Guidance, the OIG is gratuitously providing you with applicable criminal statutes, civil and administrative sanctions and its Self Disclosure Protocol just in the event you think they are “just kidding” with this draft Guidance.  The Guidance itself is not new as it requires a practice to establish a Code of Conduct, a method by which violations of the Code can be brought to the practice owner and training of the staff in quality of care and billing issues.  As Inspector General June Gibbs Brown said, “Adopting a voluntary compliance program is a lot like providing preventive medicine; it helps identify and treat small problems before they become big problems.”
As the Guidance does identify certain “Risk Areas,” physicians should take the “word to the wise” and review these areas on their own practices.

(a) Coding and Billing.  The areas the OIG is centering on are:  billing for services not rendered, double billing and upcoding.  Upcoding is definitely of interest to the OIG as confirmed by the letters HCFA sent to physicians with respect to CPT Codes 99214 and 99233.  Upcoding is also one being scrutinized by the private insurance carriers as witnessed by the recent Oxford “overpayment” demand letters.  Also, remember that a Compliance Program is also designed to stop private payor fraud as well.  Thus, if a small practice has only one of its physician members in a HMO panel, it must take care to avoid non-plan physicians rendering the service and billing it under the approved provider.  To test your practice, take a random sample of patient billing and have an independent third party trace the billing back to the patient chart.  A review of the chart should produce sufficient documentation to support the bill.

(b) Reasonable Necessary Services.  Physicians should only bill Medicare for services which are documented in the patient chart as reasonable and necessary.

(c)  Documentation.  Appropriate documentation is one of the most important compliance issues for a physician’s practice.  The records should be complete and legible and should include reason for the encounter, any relevant history, physician exam findings, prior diagnostic tests, assessments, clinical impression or diagnosis, plan of care and the date and legible identity of the provider.   Based on physician records seen by this practitioner, physicians miserably fail this test and improvement will be expected, if not demanded, by the Government to justify payment.

(d) Kickback, Inducement and Self Referrals.  Physicians should not pay or get paid for their referrals.  The attempts at covering a kickback with some type of “deal” that looks kosher will be subject to closer scrutiny in the future and the wise guys who are pushing the envelope will be easy targets for the OIG.  If you are thinking of a “way” to “capture your referrals,” you should only do so after a careful review of the Federal Anti-Kickback Law, Federal (Stark) on State Self-Referral Laws and issues of professional misconduct, i.e., fee splitting, paying for referral fees, etc.  Remember, there is no such thing as a free lunch.

The Draft Guidance will also require you to conduct annual training for your staff and new hires as well.  As outlined by the OIG, the training sessions should take three to four hours of staff time.
The cost of a Compliance Program should be considered as insurance as the cost of defending a criminal or civil case by the Government or a private carrier is vastly more costly.  After you read the Draft Guidance, feel free to contact the OIG and tell her what works and what doesn’t work because whether you want it or not – it’s here to stay.

Gregory Naclerio, is a senior partner at Ruskin Moscou Faltischek, P.C., and  Chair of the firm’s Health Regulatory Department, is formerly the Director of the Long Island Regional Office of the Deputy Attorney General’s Medicaid Fraud Control Unit. He can be reached at (516) 663-6633 or gnaclerio@rmfpc.com.