.
IMPLEMENTING A SUCCESSFUL
COMPLIANCE PROGRAM
Presented by
Jeffrey S. Baird, Esq.
© 2015 Brown & Fortunato, P.C.
Introduction
• The HME industry is young.
• The industry grew up relatively
unregulated.
• Another challenge is that few people with
CMS and on Capitol Hill have ever set foot
in an HME company.
• As the government is famous for doing, it
overreacted.
Introduction
• The pendulum will eventually swing back
towards the middle.
• Until that time, however, the HME industry
will have to deal with intrusive government
scrutiny.
• The demand for what the industry has to
offer will only increase exponentially.
Introduction
• There are 78 million baby boomers.
• The “irresistible force” (demand) meets the
“immovable object” (reduced
reimbursement).
• And so while we are in strange times, the
future is bright for well-run, innovative HME
providers.
Introduction
• It is crucial that the HME supplier
understand and comply with payment and
coverage policies and comply with the
many anti-fraud laws.
Challenge to the Supplier
• A challenge for the HME provider are the
inquiries and investigations being
conducted by DME MACs, RACs, CERTs,
ZPICs, the NSC, and accrediting
organizations.
Challenge to the Supplier
• DME MACs, and particularly ZPICs, are
aggressively conducting prepayment
reviews and post-payment audits.
• The accrediting organizations (“AOs”) are
being required by CMS to ask probing
questions and report to CMS and the NSC
any activities that the AOs believe are
improper.
Challenge to the Supplier
• The ZPICs are directing DME MACs to
suspend payments when the ZPICs
conclude that improper activities are
occurring.
• In response to reports from the ZPICs, the
NSC is suspending/revoking supplier
numbers.
Challenge to the Supplier
• When conducting post-payment audits, the
DME MACs and ZPICs are asking
questions that go far beyond whether the
provider has complete and accurate
documentation.
• The NSC is aggressively conducting
unannounced on-site inspections; in so
doing, the NSC inspectors are asking
questions that go beyond the rudimentary
questions that have been posed in the past.
The Patient Protection and
Affordable Care Act
The Patient Protection and
Affordable Care Act
• The Senate Health Reform Bill, H.R. 3590,
entitled the “Patient Protection and Affordable
Care Act” (PPACA), was passed by the U.S.
Senate on December 24, 2009.
• The House of Representatives passed the
Senate Bill on March 22, 2010, and the
President signed it into law on March 23, 2010.
• The following is a discussion of some of the
PPACA’s provisions that are relevant to HME
providers.
PPACA Provisions
Sec. 6401 - Provider Screening
• Providers enrolling or re-enrolling in
Medicare, Medicaid, or CHIP will be
subject to screening measures.
• The Secretary is required to determine the
level of screening according to the risk of
fraud, waste, and abuse with respect to
each category of provider.
PPACA Provisions
Sec. 6401 - Provider Screening
• All providers will be subject to licensure
checks and, if the Secretary so determines,
additional screening measures, such as
criminal background checks, fingerprinting,
database checks, and unscheduled and
unannounced site visits.
• The government is moving away from “pay
and chase” to “guarding the henhouse.”
PPACA Provisions
Sec. 6401 - Provider Screening
• The HME and home health industries are
experiencing unannounced site visits from a
variety of sources:
− the NSC
− the OIG
− a state Medicaid program
− an accrediting organization or
− a Medicare contractor
PPACA Provisions
Sec. 6401 – Disclosure Requirements
• Providers enrolling or re-enrolling in
Medicare, Medicaid, or CHIP will be
subject to new disclosure requirements.
PPACA Provisions
Sec. 6401 – Disclosure Requirements
• Applicants will be required to disclose
current or previous affiliations, directly or
indirectly, with any provider that has
uncollected debt, been subject to payment
suspension under a federal health care
program, has been excluded from
participating in a Federal health care
program, or has had its billing privileges
denied or revoked.
PPACA Provisions
Sec. 6401 – Disclosure Requirements
• The Secretary may deny enrollment or
re-enrollment if such affiliations pose an
undue risk of fraud, waste, or abuse.
PPACA Provisions
Sec. 6401 – Offset Payments*
• The Secretary may adjust payments to a
provider that has the same tax ID number
as a provider that owes past-due
obligations under Medicare, Medicaid, or
CHIP, regardless of such provider’s
Medicare billing number or NPI.
*From Providers with Same Tax ID Number
PPACA Provisions
Sec. 6401 – Temporary Moratorium
• The Secretary may impose a temporary
moratorium on the enrollment of new
providers if the Secretary determines that
such action is necessary to prevent or
combat fraud, waste, or abuse.
PPACA Provisions
Sec. 6401 – Compliance Programs
• By a date determined by the Secretary,
certain providers will be required to
establish a compliance program.
• Such compliance program must contain
core elements, which will be established by
the Secretary in consultation with the OIG.
PPACA Provisions
Sec. 6402 – Medicare and Medicaid*
Reporting and Returning Overpayments
• Any provider that receives an overpayment
must
(i) report the overpayment to the Secretary,
carrier, or other appropriate person and
(ii) provide written notice of the reason for
the overpayment.
*Enhanced Medicare and Medicaid Program Integrity Provisions
PPACA Provisions
Sec. 6402 – Medicare and Medicaid*
Reporting and Returning Overpayments
• An overpayment must be reported and
returned no later than 60 days after it is
identified or the date of any corresponding
cost report (if applicable).
• Failure to do so may result in civil money
penalties.
*Enhanced Medicare and Medicaid Program Integrity Provisions
PPACA Provisions
Sec. 6402 – Medicare and Medicaid*
Anti-kickback Statute and False Claims Act
• A claim that includes items or services
resulting from a violation of the
Medicare/Medicaid anti-kickback statute
constitutes a false or fraudulent claim under
the Civil False Claims Act (31 USC § 3729).
*Enhanced Medicare and Medicaid Program Integrity Provisions
PPACA Provisions
Sec. 6411 – RAC Program
Expansion of the Recovery Audit Contractor (RAC) Program
• States must establish contracts with one
or more RACs for the purpose of identifying
underpayments and overpayments and
recouping overpayments under the state
Medicaid plan or any waiver of the state plan.
Steps to Reduce the Risk of
Being Subjected to an
Enforcement Action
Effective Corporate
Compliance Program
• The OIG stresses the importance of
compliance programs by issuing guidance
to various provider and supplier types
concerning the implementation of
compliance programs.
Why Implement a
Compliance Program
• A very simple answer to this question can
be found by reading the quality standards
for suppliers of durable medical
equipment, prosthetics or products and
supplies issued on August 14, 2006.
Why Implement a
Compliance Program
• According to the final quality standards,
the supplier shall implement business
practices to prevent and control fraud,
waste and abuse by:
− Using procedures that articulate standards
of conduct to ensure the organization’s
compliance with applicable laws and
regulations; and
− Designating one or more individuals in
leadership position to address compliance
issues.
Why Implement a
Compliance Program
• The following are reasons that DME
suppliers should implement corporate
compliance programs…
Ten Reasons to Implement a
Compliance Program
1- Adopting a compliance program
concretely demonstrates to the
community at large that a provider has
a strong commitment to honesty and
responsible corporate citizenship.
2- Compliance programs reinforce
employees’ innate sense of right and
wrong.
Ten Reasons to Implement a
Compliance Program
3- An effective compliance program helps
a provider fulfill its legal duty to
government and private payors.
4- Compliance programs are cost
effective.
Ten Reasons to Implement a
Compliance Program
5- A compliance program provides a
more accurate view of employee and
contractor behavior relating to fraud
and abuse.
6- The quality of care provided to
patients is enhanced by an effective
compliance program.
Ten Reasons to Implement a
Compliance Program
7- A compliance program provides
procedures to promptly correct
misconduct .
8- An effective compliance program may
mitigate any sanction imposed by the
government.
Ten Reasons to Implement a
Compliance Program
9- Voluntarily implementing a compliance
program is preferable to waiting for the
OIG to impose a corporate integrity
agreement.
10- Effective corporate compliance
programs may protect corporate
directors from personal liability.
Compliance Obstacles
• Following are ten obstacles that suppliers
may face in implementing effective
compliance programs…
Ten Obstacles in Implementing a
Compliance Program
12345-
Creating buy-in and enthusiasm
Changing past behavior
Lack of or poor communication
Too many roles for compliance officer
Not enough financial support
Ten Obstacles in Implementing a
Compliance Program
6-
Integrating compliance with other
systems
7- Overcoming fear of retaliation/retribution
8- Finding qualified people
9- Lack of procedures
10- Education and training
How a Corporate
Compliance Program
Should Be Structured
Seven Required Elements of
OIG Compliance Guidelines
The OIG’s compliance guidelines for DME
suppliers lists seven required elements of an
effective compliance program.
1. Written Policies and Procedures
2. Designation of a Compliance Officer and
Compliance Committee
3. Conducting Effective Training and
Education
Seven Required Elements of
OIG Compliance Guidelines
4. Developing Effective Lines of
Communication
5. Enforcement of Disciplinary Standards
6. Auditing and Monitoring
7. Response to Offenses and Corrective
Action
Identifying Risk Areas
• It is not enough for suppliers to implement
policies and procedures generally geared
at educating staff and identifying potential
regulatory and statutory violations.
• The organization is required to implement
policies and procedures targeted at
specific risk areas of concern to the
individual company.
Compliance Program Follow-Up
• Once the corporate compliance
program is implemented, the supplier
must continue to take steps on an
on-going basis to ensure that the plan
remains effective.
Table of Contents
I. CODE OF CONDUCT/INTRODUCTION
A. Relationships with Physicians and Others in a
Position to Influence Our Business
1.
2.
3.
4.
5.
6.
Stark Law
Anti-Kickback Law
False Claims Laws
Civil Money Penalty Law
Contracts and Contract Administration
Referrals to Other Providers
Table of Contents
B. Inappropriate Relationships Between and
Among Employees and/or Patients
C. Conflicts of Interest
1. In General
2. Prior Approval for Potential Conflicts
D. Receipt of Improper Payments or Gifts
E. Use of ABC Medical Funds for Improper
Payments or Gifts
Table of Contents
F. Honesty in Business Dealings
G. Confidentiality
H. Employment Practices
I. Reporting Abuse
J. Quality of Care
K. Physician Orders and Certificates of
Medical Necessity
L. Billing Practices
M. Medical Documentation
Table of Contents
N. ABC Medical Property
1. Propriety Information
2. Use of At Home Medical Property
O. At Home Medical Organizational and
Financial Records
1. General Information
2. Transaction Records
3. Audit Procedure
Table of Contents
P.
Q.
R.
S.
T.
U.
Licenses, Permits and Certifications
Marketing
Document Retention
Education and Training
Investigations and Corrective Action
Program Monitoring and Auditing
Table of Contents
II. ENFORCEMENT AND DISCIPLINE
A. Persons Subject to Action
B. Consideration
C. Legal Actions
III. COMPLIANCE PROGRAM OPERATION
A. Compliance Officer
B. Compliance Committee
C. Officer Reports
Table of Contents
IV.
A.
B.
C.
D.
E.
F.
G.
POLICIES
Certificate of Medical Necessity
Claim Review
Compliance Training
Conflict of Interest
Employee Screening
Enforcement
False Statements
Table of Contents
H. Marketing Expense Budget and Gift Policy
1. Marketing Mission Statement and Underlying Law
2. Marketing Expense Budget
3. Gifts to Individuals Who Are Not Physicians or
Patients
4. Gifts to Physicians
5. Gifts to Patients
6. Gift Certificates/Cash Equivalents
7. Disciplinary Guidelines
Table of Contents
I. HCPCS Coding
J. Inexpensive or Other Routinely Purchased
DME Items and Capped Rental Items
K. Internal Reporting
L. Investigations
M. KX Modifier
N. Medical Necessity
O. Medicare Assignment
Table of Contents
P.
Q.
R.
S.
T.
Payment Likely to Be Denied
Physician Orders
Plan Auditing
Refusing to Submit a Claim to Medicare
Routine Waiver of Deductibles and
Coinsurance
U. Wiretapping
Table of Contents
V. Forms
A.
B.
C.
D.
E.
Stark Law Compliance Checklist
Supervisor’s Compliance Certificate
Employee’s Compliance Certificate
Compliance Report Form
Document Retention Schedule
Compliance Manual Summary
• Code of Conduct
− Stark
− Medicare/Medicaid – Anti-Kickback Statute
− False Claims Laws
− Civil Monetary Penalties
− Contracts
− Referrals to Other Providers
− Inappropriate Relationships with Patients
Compliance Manual Summary
• Code of Conduct
− Conflict of Interest



In General
Prior Approval for Potential Conflicts
Examples
− Improper Payments
− Confidentiality
− Employment Practices
Compliance Manual Summary
• Code of Conduct
− Reporting Abuse
− Quality of Care
− Physician Orders and Certificates of Medical
Necessity
− Medical Record Documentation
− Company Property and Proprietary
Information
− Corporate and Financial Records
Compliance Manual Summary
• Code of Conduct
− Marketing
− Document Retention
− Education and Training
− Duties of Compliance Officer
• Enforcement and Discipline
− Reporting
− Persons Subject to Action
− Consideration
Compliance Manual Summary
• Compliance Program Operation
− Compliance Officer
− Corporate Compliance Committee
− Officer Report
• Additional Policies
− Auditing
− Background Screening
− Claim Review
Compliance Manual Summary
• Additional Policies (continued)
− HCPCS
− Telephone Solicitation
− Advance Beneficiary Notice (“ABN”)
Marketing Expense Budget
and Gift Policy
• Marketing Mission Statement and
Underlying Law
• Marketing Expense Budget
• Gifts to Individuals Who Are Not
Physicians or Patients
• Gifts to Physicians (Gifts to physicians who are also
patients must meet the requirements of Sections D and E)
Marketing Expense Budget
and Gift Policy
• Gifts to Patients
(Gifts to patients who are also
physicians must meet the requirements of Sections D and E)
• Gift Certificates/Cash Equivalents
• Disciplinary Guidelines
Self Audits
Why Perform a Self-Audit?
• One of the primary advantages, if the
supplier has a corporate compliance
program, is to provide evidence that the
corporate compliance program is
effective.
• This is important because an effective
corporate compliance program can
greatly reduce any fines or penalties that
might result from a government
investigation.
Why Perform a Self-Audit?
• An effective corporate compliance
program may also result in the
government not requiring the supplier to
enter into a corporate integrity agreement
as part of a settlement resulting from an
investigation.
Hallmarks of Effective Self-Audits
Routine
• An effective internal audit process will
become part of what the supplier does.
Hallmarks of Effective Self-Audits
Periodic
• An effective audit procedure takes place
periodically.
• The exact period does not matter so
much as that an audit happens at defined
time intervals.
Hallmarks of Effective Self-Audits
Periodic
• Also, note that how often self-audits occur
is influenced by and, in turn, influences
the scope of the audit.
Hallmarks of Effective Self-Audits
Eventually cover all areas of exposure
• Whether the audits are monthly,
quarterly, or annually, the audits should
address all risk areas for the supplier.
Hallmarks of Effective Self-Audits
Individuals held accountable
• Individuals should be held accountable
both for the performance of the audits
and for implementing any changes that
result from the audits.
Hallmarks of Effective Self-Audits
Documentation of the audit
• Proper documentation of the audit must
be maintained and the documentation
must include the following:
– the specific risk areas the audit addressed
– the individuals performing the audit
– the time frame of the audit
Hallmarks of Effective Self-Audits
• Proper documentation (continued):
– a copy of the audit tool
– the results of the audit
– recommendations for changes to policies
and procedures
Hallmarks of Effective Self-Audits
• Proper documentation (continued):
– specific changes that were, in fact,
implemented as a result of the audit
– a subsequent re-audit to verify that the
changes in policies and procedures took
root
Specific Self-Audit Areas
and Procedures
• Review denials received from the MACs
to determine if there are any patterns to
the denials.
• Review the supplier's accounts
receivable history.
• Review the OIG's annual workplan.
Specific Self-Audit Areas
and Procedures
• Review recent reports published by
various HHS departments.
– Reports on abuses in the marketing of
diabetes testing supplies should have
prompted suppliers providing diabetes
testing supplies to review and evaluate
their marketing practices.
Specific Self-Audit Areas
and Procedures
• Review the results of Medicare hearings,
appeals, and reviews.
– These will often pinpoint, with laserlike specificity, any problems in the
supplier’s underlying medical
necessity documentation.
Specific Self-Audit Areas
and Procedures
• Upon hiring new individuals, and at least
once per year thereafter, verify that the
individual does not appear on the OIG's
list of excluded individuals.
• Test various employees (especially
billing personnel) to verify their
knowledge of correct procedures.
Specific Self-Audit Areas
and Procedures
• Review the size and age of the supplier’s
credit balances.
• Review the OIG's Corporate Compliance
Program Guidance for DME Suppliers.
• Review the audits conducted and
develop statistics.
Post-Audit Follow-Up
• The audit summary should be reported to
the supplier’s president on a routine basis.
Post-Audit Follow-Up
Other follow-up actions may include, but are
not limited to:
• Revising policies and procedures. This
can be helpful in correcting systemic
errors.
• Providing additional training in specific
areas.
• Making refunds, if appropriate.
• Taking disciplinary action, if necessary.
Post-Audit Follow-Up
Other follow-up actions (continued):
• Changing the focus of the audits.
– Audit plans should be flexible and
revised based upon the results of
previous audits.
– There is no magic formula for how
many internal audits must be
conducted and what each audit should
contain.
Post-Audit Follow-Up
Other follow-up actions (continued):
• Documenting specific changes that were,
in fact, implemented as a result of the
audit, and subsequent re-audits to verify
that the changes in policies and
procedures and that corrective actions
have been implemented successfully.
Post-Audit Follow-Up
• All audit plans, audit summaries and
completed audit tools should be
maintained and secured in an organized
manner .
• The supplier should also review its denials
received from the MACs and other payor
sources to determine if there are any
patterns to the denials.
Post-Audit Follow-Up
• The accounts receivable history, hardship
waivers, co-payments and deductible
payments and usage of the KX modifier
are items that should be reviewed during
audits.
• The supplier should become familiar with
the major investigative targets.
Post-Audit Follow-Up
• Key sources of information on “hot”
targets include the annual work plan
from the OIG, fraud alerts issued by the
OIG, and focused medical reviews
described in payors’ provider bulletins.
Preparing for a
Government Investigation
Introduction
• Assume that a DME company suspects
it is under investigation.
• Perhaps the clues were a series of
particularly detailed or expansive
documentation requests or audits.
Introduction
• Or perhaps referring physicians reported
receiving telephone calls from Medicare
or another governmental agency
inquiring about the relationship the
physicians have with the DME company,
what kinds of equipment were ordered
and the names of the patients.
Introduction
• Or perhaps patients were interviewed in
person by FBI agents.
• In any case, the DME company fears a
larger investigation is under way and
wishes to minimize the shock and fallout
of further investigative actions.
Preparatory Steps
• There are a number of steps the DME
company can take to prepare itself for a
possible government investigation.
Preparatory Steps
• Corporate Compliance Program
• Regular Computer System Backups
– The company should regularly back up
its computer system and keep the
backup files in a secure offsite
location.
Preparatory Steps
• Comprehensive Document Inventory
– The company should maintain a
detailed inventory of documents and
their locations on the premises, e.g.,
a list of patient files, and which office
and/or file cabinets they are kept in.
• Appoint a Company Spokesperson
Preparatory Steps
• Employee Training
– It is important to remember that the company
should not instruct its employees to refuse to
speak with investigators, because this could
be construed as obstruction of justice.
– Rather, the company should instruct
employees that it is their choice whether or
not to answer the investigator’s questions,
and that they have the right not to do so.
– It is also their right to request that an attorney
be present during questioning.
Preparatory Steps
• Rehearsal
– Too frequently, investigators take advantage of
situations where unsuspecting, frightened
employees act impulsively to release information
that may be outside the boundaries of the
investigation.
– It is easy, after the fact, for government agents to
claim that the employees released the information
voluntarily.
– A “fire drill” approach to rehearsing such a scenario
is an effective way to prepare employees for the
real thing.
Preparatory Steps
• Retain a Health Care Attorney
THE END
A production of:
Brown & Fortunato, P.C.
905 S. Fillmore, Suite 400
Amarillo, TX 79101
806-345-6300
www.bf-law.com
Jeffrey S. Baird, Esq.
jbaird@bf-law.com
806-345-6320