July 23, 2014

An Effective Compliance Program: Preventive Medicine for the Individual and Small Physician Group Practice

With federal and state fraud and abuse enforcement efforts on the rise, all health care providers must be vigilant in identifying areas of risk and putting in place mechanisms to ensure regulatory compliance.  This holds true not just for larger institutional providers, but individual and small physician group practices, as well.  With the proliferation of federal and state contractors tasked with performing audits of coding and  billing practices, physician practices must be prepared to demonstrate proper coding and billing practices and proper documentation to support those practices.  The best preventive medicine for the individual and small physician group practice is a carefully drafted compliance program to identify and address areas of risk and to promote a culture of compliance within the practice.

The Office of Inspector General (“OIG”) of the United States Department of Health and Human Services has issued guidance for the development of compliance programs by individual and small physician group practices.  The OIG lists seven (7) elements of an effective compliance program, which are the following:

1.         Conducting internal monitoring and auditing.

The practice should periodically conduct self-audits to determine if bills are accurately coded and accurately reflect the services provided as documented in the medical record.  The practice should also determine whether documentation is being completed correctly and whether services or items provided are reasonable and necessary.

2.         Implementing compliance and practice standards.

The practice should develop written standards and procedures governing the compliance program.  These written standards should identify specific risk areas, such as coding and billing, and have procedures through which any aberrant practices should be addressed.

3.         Designating a compliance officer or contact.

The practice should designate a compliance officer or contact person who oversees the compliance program and addresses compliance issues that arise.  The duties of the compliance officer should include establishing methods to improve the practice’s efficiency and quality of services, and to reduce the practice’s vulnerability to fraud and abuse.  The compliance officer should also be charged with keeping the compliance program up-to-date to comply with new or revised regulatory standards.  In addition, the compliance officer should develop and coordinate a training program for staff to educate them about the compliance program and their duties under the compliance program. Finally, the compliance officer should be charged with investigating any report or allegation concerning possible unethical or abusive business practices or regulatory violations, and implementing and monitoring subsequent corrective action to address the issue.

4.         Conducting appropriate training and education.

The practice should conduct periodic compliance training for all staff covering subjects such as fraud and abuse, coding and billing requirements, documentation requirements, and any updates to the compliance program.

5.         Responding appropriately to detected offenses and developing corrective action.

A compliance program will only work if it has mechanisms to respond to complaints and correct any violations.  If a violation is discovered after an investigation, corrective action should be documented and staff should be educated regarding the corrective action so the same problem does not recur.

6.         Developing open lines of communication.

The practice should develop a system for meaningful and open communication that may include a requirement that all staff report conduct suspected, in good faith, to be erroneous or fraudulent, creation of a user-friendly process (such as an anonymous drop box) to make such reports, and assurances that there will be no retribution or retaliation for reporting conduct that a reasonable person acting in good faith would have believed to be erroneous or fraudulent.

7.         Enforcing disciplinary standards through well-publicized guidelines.

The practice’s compliance program should include procedures for enforcing and disciplining individuals who violate the practice’s compliance program or other practice standards.  The practice should emphasize to all staff that compliance is a critical part of their job description.  Disciplinary standards should be in written form and provided to all staff so that standards are clearly documented in the records of the practice.

Promoting a culture of compliance within the medical practice can prevent large problems before they arise by ensuring that the legal equivalent of a cold does not develop into pneumonia.

© 2014 by McBrayer, McGinnis, Leslie & Kirkland, PLLC. All rights reserved.

About the Author

Christopher J. Shaughnessy, Health Care Attorney, McBrayer Law Firm

Christopher J. Shaughnessy is an attorney at McBrayer, McGinnis, Leslie & Kirkland, PLLC. Mr. Shaughnessy concentrates his practice area in health care and is located in the firm's Lexington office. He has extensive experience in the health care law industry. Mr. Shaughnessy represents institutions such as hospitals and nursing homes as well as individual medical professionals, including physicians, mid-level practitioners and nurses. He also represents small offices and large offices that are part of large networks. Some of the services he commonly provides are in the following...


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