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Mandatory Compliance Plans For Physicians

Mandatory Compliance Programs for Physician PracticesHealth care attorneys health law

 Steps Necessary to Implement an Effective Compliance Program

 John H. Fisher, J.D., C.H.C.

 It is no secret that the government is becoming increasingly aggressive in its enforcement efforts against health care providers.  At the same time, regulations are becoming more complicated.  The combination of these two forces means that many unknowing providers are being caught up in costly investigations of their practices.  The government is taking a “return on investment” approach to health care fraud and is seeing a good return on every dollar that they put into the efforts.  As a result, we cannot expect fraud enforcement to decrease any time soon.

 For this reason, it is important that providers, including medical practices, develop and operate systems to help them comply with governmental regulations and third party payer billing requirements.  The development of a formalized compliance program has become an indispensible part of the risk management process of medical practice.  Failure to maintain compliance can lead to an increase in reimbursement disputes, increased uncollectable fees, more demands for repayment, civil litigation and in extreme cases, potential criminal prosecution.  Matters to be addressed in compliance programs include not only billing practices but also anti-kickback compliance, state and federal self-referral prohibitions, state fee-splitting laws, licensure and accreditation requirements, labor relations matters, antitrust and price fixing prohibitions, HIPAA and medical records issues and a whole host of other state and federal laws.

 Formalized compliance programs first began appearing in the late 1990s as a way to minimize risk in primarily large institutions.  Compliance programs are a child of the Federal Sentencing Guidelines which factors in the adoption of 7 pillars of an effective compliance program when a health care organization is facing potential institutional criminal penalties for legal violations.  Formal compliance programs were more deeply woven into the fabric of many organizations as the Medicare Office of Inspector General began releasing compliance guidance directed toward specific segments of the health care industry in the late 1990s and continuing through the mid 2000s.  One of the industry segments that the OIG has specifically addressed in its published compliance guidance are physician practices. 

 Acffordable Care Act Mandates Formal Compliance Programs

 Even though compliance programs have not traditionally been mandatory, over the past ten years, formal compliance has become industry “best practices” for virtually all segments of the health care industry.  Compliance guidance for physician practices was issued by the Office of Inspector General in 2000.  Since that time, many physician practices, especially more complex specialty practices, have developed some sort of compliance plan.  Although compliance plans have not previously been mandatory, they have become “industry standard” as a way to minimize risks associated with health care regulations such as the Health Insurance Portability and Accountability Act of 1996, the Medicare and Medicaid Fraud and Abuse Laws, Anti-kickback Statute, Civil Monetary Laws, False Claims Act, the Clinical Laboratory Improvement Act and all other state and federal statutes, regulations and directives that apply to the operation of a complex physician’s practice.

 Section 6401 of the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care Education Reconciliation Act of 2010 (the “Affordable Care Act”) requires HHS and the Office of Inspector General to promulgate regulations that require most healthcare providers and suppliers to establish compliance programs.  The compliance programs are intended to be “effective in preventing and detecting criminal, civil, and administrative violations” under the Medicare and Medicaid laws and other laws that govern operations.

Under the Affordable Care Act, physicians and group practices, along with other relatively small providers, will be required to establish compliance programs as a condition of enrollment in the Medicare program.  Early versions of the Affordable Care Act included an exception for physicians which was deleted from the version of the Act that was signed into law.  We know that the mandatory compliance program requirement will apply to physician practices absent further legislative action.

 The Affordable Care Act’s compliance program mandates are divided into two categories: (1) requirements for nursing facilities and (2) requirements for all other providers and suppliers. The nursing facility compliance program provisions in the Affordable Care Act are relatively detailed and contain a specific timetable for implementation.  The statutory requirements pertaining to other types of health care providers do not provide any time frame for implementation but rather leave this issue to the discretion of HHS. 

 HHS is required to issue regulations creating a timetable and basic core compliance program requirement.  These matters are to be addressed in regulations that are yet to be published.  Medicare & Medicaid Services (CMS) officials have made public statements that indicate that the agency expects to issue the mandatory compliance program requirements on a rolling basis. There is no additional information on the expected timetable for application of the mandatory compliance program requirement at this time, but most professionals in the industry expect regulations to be out by early in 2012.

About The Author

This article is part of a multiple part series by Health Care Attorney John Fisher, CHC on compliance programs for physician practices.

John Fisher, JD, CHC  is a seasoned health care attorney and is certified in Health Care Compliance by the Health Care Compliance Association.  Mr. Fisher is available to assist physician groups and other health care providers nationwide in the development and operation of Compliance Programs.

Mr. Fisher has significant experience in the various legal and regulatory matters that are faced by physicians including the Stark Law, Anti-Kickback Statute and Safe Harbors, Medicare and Medicaid reimbursement rules, HIPAA, False Claims Act, antitrust laws, employment laws, contract matters, business ventures and laws governing financial relationships between physicians, and others.

Mr. Fisher practices with the Ruder Ware law firm in Wausau, Wisconsin.  His practice on compliance and Federal Law issues is nationwide.

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John H. Fisher

Health Care Counsel
Ruder Ware, L.L.S.C.
500 First Street, Suite 8000
P.O. Box 8050
Wausau, WI 54402-8050

Tel 715.845.4336
Fax 715.845.2718

Ruder Ware is a member of Meritas Law Firms Worldwide

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