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Effective Compliance Plans for Physicians Part IV Print E-mail
Written by Benjamin L. Frosch   
Monday, 16 April 2012 13:04

What Does A Compliance Plan "Look Like"?

One goal of every compliance plan should be to demonstrate the practice's commitment to complying with Medicare/Medicaid and third party payer regulations, guidelines, and laws. Developing and implementing an effective compliance program provides a physician practice the means to detect coding and billing problems, minimize and voluntarily correct the problems detected, and quite possibly reduce the penalties imposed by a state or federal agency or other third party payer in the event billing problems are uncovered during an audit.

A supporting goal of every compliance plan should be to ensure that the practice's employees, independent contractors and vendors understand the billing rules and feel comfortable raising questions if they think any billing problems exist. Thus, it is prudent to encourage billing personnel to ask questions. An effective compliance plan must be a user-friendly if it is to ensure that the practice's employees, independent contractors, vendors, patients and physicians are committed to achieving its objectives.

There is no such thing as a "form" effective compliance plan. Notwithstanding the seven elements discussed above, every physician practice's plan must be developed and implemented in light of its unique circumstances. For a number of reasons, a practice that is looking to develop and implement an effective compliance plan should seek the assistance of experienced legal counsel and appropriate consultants. A practice's management needs to recognize that the development and implementation of a compliance plan is likely to require a significant amount of time, effort and resources. In addition, an effective compliance plan represents an ongoing commitment. In the current health care climate, however, a corporate compliance plan must be viewed like malpractice coverage, as one of the costs of doing business every practice needs to incur.

Click HERE to view part I. Click HERE to view Part II. Click HERE to view Part III.

Mr. Frosch is the President of Frosch Medical Consultants in Plantation, FL. If you have a question for Ben, please send your message to ASK BEN

Last Updated on Monday, 14 May 2012 07:28
Effective Compliance Plans for Physicians Part III Print E-mail
Written by Benjamin L. Frosch   
Saturday, 31 March 2012 14:21

The Elements of An Effective Compliance Plan

An effective compliance plan includes seven (7) elements.  The remainder of this discussion provides the reader with a brief overview of each element, as it is discussed in the OIG’s draft “Compliance Program for Individual and Small Group Practices.”
  First Element:  Adoption of Compliance Policies and Procedures:

     a.    Adopt a written code of conduct that makes clear the practice’s commitment to an effective compliance plan.

     b.    Develop policies and procedures to address various areas of potential fraud and abuse risk.  For example, policies and procedures for the practice’s billing activities might include the following:

       1.    Compiling a written policies and procedures manual that commits the practice to accurate coding and billing for all services, distributing the manual and any updates or revisions to finance, registration staff, billing personnel, physicians, medical record coders, the charge master review team and others involved with the billing process.

       2.    Preparing, maintaining and periodically updating and distributing policies and procedures addressing other issues, including:

         i.      Use of charge documents and the physician’s responsibility for providing clear and accurate information;

         ii.    Process for obtaining accurate, updated demographic and insurance information;

         iii.   Description of the coding check and balance process;

         iv.   Payment processing (i.e., receipting, balancing and documenting, etc.);and

         v.    Coding and documentation of -

          ·         E/M levels of services,

          ·         Medical necessity,

          ·         Consultations,

          ·         Preventive medicine,

          ·         Global surgery,

          ·         Proper use of modifiers, and

          ·         Bundling issues.

         vi.   Other pertinent physician policy issues which should be addressed include:
          ·         The “incident to” provision,

          ·         “Waiver of liability” (advance notice to beneficiaries),

          ·         Non-covered services (physical examinations),

          ·         Waiver of coinsurance and deductible obligations,

          ·         Misuse of provider numbers,

          ·         Billing of services not rendered or provided as claimed, and

          ·         Medical necessity.
  Second Element:  Designation of a Compliance Officer.

     a.    Even if the Practice cannot afford to have a full-time Compliance Officer, assign a high-level, respected person within the organization, who is able to accept a great deal of additional responsibility and be accessible to everyone, to oversee the compliance program.  In the Physician Guidelines, the OIG leaves open the possibility that one individual may be the Compliance Officer for several practices.  An appropriately structured outsourcing arrangement may be the most feasible alternative for small practices. 

     b.    The OIG acknowledges that, depending upon the size of the organization, it may not be feasible to create a position for a full or part time “Compliance Officer”.  The Physician Guidelines refer to someone who is designated as the Compliance Officer and, as an alternative to outsourcing, for the first time in its Compliance Guidelines, the OIG suggests dividing compliance duties among multiple staff members, who serve as “Compliance Contacts”.  Possible Compliance Contacts could be the practice’s office manager and the individual with primary responsibility for a practice’s billing and collection.  Notwithstanding its size and resources, however, the OIG expects even a small organization, for example, a solo practitioner, to have an effective compliance plan.

  Third Element:  Education and Training.

     a.    Developing and implementing mechanisms to effectively communicate the practice’s commitment to its compliance plan to everyone (i.e., employees, subcontractors, agents, vendors and patients).

     b.    Maintaining a detailed job description for each employee and his/her job performance evaluations in the compliance plan folder.

     c.    For practices that are large enough to have a compliance committee, consistently providing agendas and minutes for compliance committee meetings and retaining copies in the compliance files.

     d.    Developing and documenting training for the staff that address relevant topics, including:

         i.     How new physicians and staff are oriented to the coding and billing rules;

         ii.    Periodic training on coding accuracy for staff members; and

         iii.   How billing staff and physicians are trained with respect to new guidelines, regulations, and policy.
  Fourth Element:  Monitoring/Auditing and Resource Development:

     a.            In the event of an inquiry from the OIG, another governmental agency (for example, the FBI, Postal Inspectors, IRS, FDA or DEA), or third party payer, a physician practice (or any health care entity) will need to be able to demonstrate the effectiveness of its corporate compliance plan.  Thus, an organization’s or practice’s plan should include “monitoring and auditing systems” reasonably designed to detect noncompliance issues.  For the individual or small practice the OIG suggests that 5-10 charts per physician be audited each year and, if problems are identified, more focused reviews should follow.  OIG would also like to see reviews of the practice’s top 10 denials, 10 most frequently billed services, and more. 

     b.            The individuals who conduct these audits should not be the same personnel who are responsible for that activity on a day to day basis.  Indeed, serious consideration should be given to having an independent third party fulfill this role, in order to protect the objectivity and thoroughness of the audits.[1] 

     c.            The monitoring and auditing functions should include, at a minimum:

         i.              Performing regularly scheduled internal audits of each physician’s use of the E/M, CPT and ICD-CM codes, and their modifiers; the results should be documented and feedback given to the physician(s) involved.
         ii.            Developing and maintaining an internal resource library and developing revenue capture tools, such as registration forms, release of information, waivers, etc.  (Note:  Setting up a resource library can be as easy as gathering all Medicare Updates, Medicare newsletters, bulletins, current CPT and ICD-9 books, and manuals in one location.  These resources should include reference materials that will address a broad range of billing and coding topics which are relevant to that practice.)
         iii.           Documenting how the coding and billing department communicates with practice physicians regarding pertinent coding changes and individual coding behaviors.  Depending upon the size of the practice, consider comparison reports by individual physicians on a quarterly basis.

  Fifth Element:  Action Plans/Corrective Response and Actions

      a.    Establishing response procedures to be followed when problems are identified.

      b.    Developing and implementing a physician coding peer review procedure, in addition to any existing peer review policies, depending upon the size of the practice.

      c.    Implementing problem logs from the coders and payment processors, and how follow-through actions are undertaken and solutions arrived at.

      d.    Educating all pertinent staff about proper billing procedures and documenting the practice’s activities to ensure that all staff understand what happens when they perform their assigned tasks well, and the effects when they perform them poorly.

      e.    Developing documentation of every employee’s training and understanding that the practice intends to comply with all federal, state and third party payer rules and regulations when coding and billing for professional and/or technical component services. 

      f.     Developing and implementing mechanisms to encourage employees to report any questionable coding or billing practice to the Compliance Officer or Compliance Contact.  Employees must not fear or be subjected to repercussions when reporting such concerns, and this fact must be documented in the compliance statement.

     g.    Conducting and requiring attendance at regular meetings with coding and billing staff and encouraging employees to voice their concerns or questions regarding coding or billing issues.

     h.    Taking appropriate corrective actions which may include, for example, voluntarily repaying any amount received in error (overpayment), voluntarily disclosing suspected violations of law to the appropriate federal or state agencies, voluntarily instituting appropriate controls to minimize the likelihood of a recurrence of the improper activities and revising the practice’s compliance plan, both in response to new developments and to reduce the likelihood of fraud and abuse.

  Sixth Element:  Disciplinary Enforcement.

     a.    Consistently enforce rules and discipline those who do not follow them.

     b.    Make clear that management expects total support and cooperation in this effort and will not hesitate to report suspected fraudulent or abusive practices to the appropriate authorities when it is warranted.

  Seventh Element:  Communication.

     a.            As part of every compliance plan, a mechanism should be developed whereby an employee, independent contractor, vendor or any other party including a patient compliance contact, can report suspected noncompliant activities to the Compliance Officer/Compliance Contact; the goals in developing this reporting mechanism need to include:
        i.              The ability to file a report without fear of retribution or adverse consequences;

        ii.            Ensuring that the employees, independent contractors, etc. are aware of how to report suspected violations; 
        iii.           Making the reporting mechanism reasonably available without fear of discovery;

        iv.           Investigating each report in a timely manner; and

        v.            Resolving each investigation by taking appropriate action, which might include notifying and cooperating with a State or Federal investigation and any resulting prosecution.

     b.            Some large organizations have established “hot lines” for this purpose; in a smaller organization a less costly approach may be appropriate.  In the Physician Guidelines the OIG suggests that small practices could implement an “open door policy”, under which employees have no fear of retaliation for revealing what they think is in non-compliance.  The draft Physician Guidelines also suggest anonymous drop boxes would also be acceptable.

Mr. Frosch is the President of Frosch Medical Consultants in Plantation, FL.

[1]           An independent third party who regularly provides compliance auditing also is more likely to be familiar with similar organizations, the areas of greatest potential vulnerability, and the topics and issues on which governmental and third party payer auditors are most likely to focus their attention.

Last Updated on Tuesday, 03 April 2012 07:03
Effective Compliance Plans for Physicians Part II Print E-mail
Written by Ben Frosch   
Friday, 30 March 2012 10:44

Compliance Plans for Physicians: An Overview

One of the most important objectives of a physician practice's compliance plan is to ensure that the practice's physicians and billing staff are familiar and comply with all of the rules and regulations of the Medicare and Medicaid programs and other third party payers (including HMOs). Accomplishing this objective, however, involves a number of steps including, but not limited to periodic training of the physicians and staff, periodic claims audits by persons who are not involved in the practice's day-to-day claims preparation and processing activities, and periodic reviews of the practice's compliance with other relevant administrative instructions and regulations.

The OIG recognizes that even an effective compliance plan cannot guarantee that a practice's personnel will not engage in fraudulent and/or abusive activities. Rather, in this agency's view, an effective compliance program can reduce the likelihood of the practice's personnel engaging in prohibited activities. As a consequence, the benefits of an effective compliance plan include reducing the risk of the OIG taking civil and/or criminal action, thereby reducing any resulting penalties if there is a problem, as well as helping a provider avoid the negative press and business consequences of a fraud investigation.

The OIG views an effective compliance plan as one which is integrated into the practice's daily operational procedures and an integral part of its culture, rather than existing merely as a paper document sitting on a shelf. In addition to reducing the risk of sanction, integrating an effective corporate compliance plan into a practice's day-to-day operations and corporate culture can produce a number of benefits; for example, increased operational efficiency and effectiveness, developing and maintaining a reliable management information system, and increased confidence that the practice is being operated in a manner that is not likely to run afoul of the various federal and state health care laws. An additional but often overlooked benefit of an effective compliance plan is that it involves adopting and implementing a strong system of internal controls, which also can assist a physician's effort to position his/her practice to be more successful.
An effective compliance plan provides a physician practice both a management tool and a means of dealing with many potential risks, thereby reducing its legal exposure. In essence, a compliance plan that is effective, that is, working the way it should, gives the practice's management the ability to know what is going on in the practice, identify issues that need to be addressed, develop responses to those issues, implement those responses and evaluate whether the responses are sufficient. An effective compliance plan also provides a safety net in the event the practice is audited or investigated by Medicare, Medicaid or another third party payer. An important element of this safety net is the development of appropriate documentation that demonstrates clearly the practice's efforts to comply with the various third party payers, state and federal regulations and rules applicable to, for example, the practice's billing and coding procedures for services rendered to a Medicare beneficiary/Medicaid recipient or another third party payer's insured/enrollee/member.

Mr. Frosch is the President of Frosch Medical Consultants in Plantation, FL. If you have a question for Ben, please send your message to ASK BEN.

Last Updated on Tuesday, 03 April 2012 06:30
Effective Compliance Plans for Physicians Part I Print E-mail
Written by Ben Frosch   
Saturday, 24 March 2012 16:16

Part I: Why Do Physician Practices Need Effective Compliance Plans?

As a result of the Affordable Care Act, the health insurance reform legislation, there can no longer be any doubt that the Department of Health and Human Services - Office Inspector General ("OIG") strongly encourages, indeed expects, every physician, supplier and provider participating in the Medicare and Medicaid programs to develop, implement, and maintain an effective corporate compliance plan that is designed to reduce the likelihood of fraudulent or abusive billing and other activities. OIG physician compliance education materials disseminated in 2011 indicate that the Centers for Medicare and Medicaid services (CMS) has not finalized the requirements, but will advance specific proposals at some point, and soon compliance plans will be mandatory. Over a decade ago, the OIG issued the draft "Compliance Program for Individual and Small Group Physician Practices" ("Physician Guidelines"), which outlines the steps the government expects individual practitioners and small group practices to take. The OIG has indicated that the presence or absence of an effective compliance plan is likely to be a significant factor in reaching its decision to prosecute or agree to otherwise resolve an allegation of abuse or criminal activity involving a provider of health care services.

The OIG is requiring providers who are found to be out of compliance with the fraud and abuse laws, for example, by failing to conform to the billing and coding requirements, to establish compliance plans as part of their Corporate Integrity Agreements. In being proactive and voluntarily adopting an effective compliance plan before being required to do so, a provider has the opportunity to better control both the cost of its plan and the plan's implementation. By proactively implementing an effective compliance plan, a physician's practice also creates for itself an opportunity to implement measures designed, for example, to improve the accuracy of the practice's billing, and correct any systemic weaknesses that could lead to erroneous or false claims, and establish effective controls, for detecting, correcting and preventing future billing problems. In short, by implementing an effective compliance plan a provider can reduce substantially the risk of OIG scrutiny. 

Mr. Frosch is the President of Frosch Medical Consultants in Plantation, FL.

Last Updated on Tuesday, 03 April 2012 06:31
2012 Office of Inspector General (OIG) Work Plan Medicare Part B Print E-mail
Written by Benjamin L. Frosch   
Saturday, 21 January 2012 15:18

ben frosch
With the passage the Affordable Health Care Act (Health Care Reform) and the Medicare program in financial jeopardy, the OIG 2012 Work Plan is possibly more important than any of their previous work plans. With a few thousand staff members throughout the United States, the Office of Inspector General (OIG) plans and performs audits, investigations, evaluations, and legal activities pertaining to the Department of Health and Human Services (HHS). With the Issuance of the 2012 OIG Work Plan, there are a variety of important Medicare issues that they will evaluate pertaining to Medicare physicians and other healthcare providers. This may be a good opportunity to evaluate compliance in your practice with respect to the following Part B subjects that are in the OIG Work Plan.   With more federal agencies taking a closer look at Medicare fraud and abuse than ever before, it is very clear that there is a zero tolerance for Medicare fraud and abuse.   The following is a list of what I think are some of the hottest physician subjects targeted in the 2012 OIG Work Plan.


This is going to be a subject under the microscope in 2012 and beyond. The OIG will be identifying providers that exhibit questionable billing for E/M services in 2009.  Medicare paid $32 Billion dollars for E&M services in 2009, representing 19% of all Medicare Part B payments. Providers are responsible for ensuring that the E/M codes that they submit accurately reflect the services they provide and were medically necessary. E/M codes represent the type, setting, and complexity of services of provided and the patient status, such as new or established.

The OIG has and will continue to review physician coding on Medicare Part B claims for services performed in Ambulatory Surgical Centers (ASC) and hospital out-patient departments to determine whether they are coded properly with the correct place of service. Federal regulations provide for different levels of payments to physicians depending on where services are performed. Medicare pays a physician a higher amount when a service is performed in a non-facility setting, such as a physician office, than it does when a service is performed in hospital outpatient department or, with certain exceptions, in an Ambulatory Surgical Center.  

The OIG will continue to evaluate Medicare payments for Part B imaging services to determine whether they reflect the expenses incurred and whether the utilization rates reflect industry practices. Physicians are paid for services pursuant to the Medicare Fee Schedule, which covers the major categories of cost, including the physician professional cost component, malpractice cost, and practice expenses.   Practice expenses are those such as office rent, wages of personnel, and equipment.   For selected imaging services, the OIG will focus on the practice expense components, including the equipment utilization rate. From the 2011 Work Plan, the OIG will continue to review Medicare payments for high cost diagnostic tests to determine whether the tests were medically necessary. The Social Security Act provides that Medicare will not pay for items or services that are not "not reasonable and necessary".

The OIG will review the appropriateness of the use of certain claims modifier codes during the global surgery period and determine whether Medicare payments for claims with modifiers used during the global surgery period were in accordance with Medicare requirements. Prior OIG work has shown that improper use of modifiers during the global surgery period resulted in inappropriate payments. The global surgery payment includes a surgical service and related preoperative and postoperative E/M services provided during the global surgery period.

Physicians: Incident-To Services
CMS and the OIG have always been concerned about proper use of the "incident-to" provision. Therefore, the OIG will review physician billing for "incident-to" services to determine whether payment for such services had a higher error rate than that for non-incident-to services. Additionally, they will assess CMS's ability to monitor services billed as "incident-to." Medicare Part B pays for certain services billed by physicians that are performed by non-physicians incident to a physician office visit. In 2009 the OIG found that when Medicare allowed physicians' billings for more than 24 hours of services in a day, half of the services were not performed by a physician. They also found that unqualified non-physicians performed 21 percent of the services that physicians did not perform personally.

Incident-to services represent a program vulnerability to CMS in that they do not appear in claims data and can be identified only by reviewing the medical records.  Medicare may also be vulnerable to overutilization and expose a Medicare beneficiary to care that does not meet professional standards of quality.                          (ARTICLE CONTINUES BELOW)

Last Updated on Monday, 30 January 2012 09:53
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