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Mandatory Compliance Plan Requirements – Operationalizing Compliance

Mandatory Compliance Programs – Is Your Practice Ready?

The Office of Inspector General has encouraged health care providers to adopt compliance programs since the late 1990s.  Most larger organizations have implemented compliance programs as a way to detect and mitigate risk of non-compliance and to reduce penalties if a problem is detected.  However, many smaller providers, such as physician practices, have not adopted any type of formal compliance program.  The Patient Protection and Affordable Care Act (the “PPACA”) makes compliance programs mandatory for the first time  for all suppliers and healthcare providers enrolled in federal healthcare programs. Providers of all sizes will be required to certify that they have an effective compliance program in place as a condition of participation of federal healthcare programs.

The Office of Inspector General is charged with issuing regulations that define the core elements that providers must implement in order to certify compliance with the mandatory compliance program requirement.  The first set of regulations have been issued relative to nursing home who must certify their compliance programs as of 2013.  Regulations addressed at other provider types have not yet been issues but are expected soon. We can expect that the regulations will be similar to the guidance that has been provide by the OIG covering various industry sectors over the years.

Requirements for nursing home compliance plans have been released.  The nursing home regulations require the following:

  • The adoptions of formal written compliance policies, standards and procedures that are effective at reducing the risk of compliance violations.
  • The assignment of compliance responsibility to a Specific individual within the organization.  The individual should be a high ranking member of the management team and should report directly to the governing body.
  • The compliance program must be adequately funded to assure its proper operations.
  • Systems must be put in place to assure that authority is not delegated to individuals who may show a propensity to commit compliance violations.  For example, a program should be put in place to screen employees, staff members, vendors and others against OIG and GSA exclusions lists.
  • The program elements and the ability to report compliance violations must be stressed and an atmosphere of compliance should be created.
  • A strong system of anti-retaliation for individuals reporting compliance concerns must be maintained and communicated throughout the organization.
  • Effective communication of the standards and procedures to all employees and required participation in training programs.
  • Systems of monitoring and auditing should be put in place to help detect potential practices that could lead to compliance violations.
  • Disciplinary processes must be maintained in order to enforce the compliance program.  Discipline should be coordinated with existing policies and procedures regarding employee discipline.
  • The compliance program should “learn from itself.”  In other words, systems of corrective actions should be put in place that includes revisions of policies and procedures based on compliance concerns that are detected or reported.
  • Continued review of the effectiveness of the compliance program should be undertaken.  Simply having a compliance program in place is not sufficient.  The organization must assure that the program is effective by continually reassessing and testing the program.

The exact date that compliance programs will become mandatory is not yet certain.  Nevertheless, enforcement activity is on a rise.  Prudent providers will take proactive efforts to reduce their compliance risks.  This includes that creation of an effective compliance program that is specifically tailored to the compliance risks associated with the specific provider.  Many smaller providers have never contemplated creating such a program in the past.  Mandatory requirements, increased enforcement activities and penalties, are all factors forcing providers to take proactive steps to reduce their exposure.  This creates a disproportionate burden on smaller providers such as small group practices.  At the same time, the OIG has in the past recognized that smaller organizations do not need to go to the same extremes as larger systems to meet their compliance obligations.  In other words, compliance programs are permitted to have a degree of scalability and allow for the size and resources of the organization.  It is critical for small providers to know where to place their compliance resources.  A “shotgun” approach will provide very little benefit.  Creating an overbroad plan that can never be operationalized does nothing more than create a roadmap leading authorities to the actions that your organization is not taking.

It is most prudent for providers of all sizes to have some level of compliance plan in place sooner rather than later.  A well focused plan scaled to your biggest risk areas is much better than a robust plan that you can never operationalize.  The point is to start with your compliance efforts and build upon them as time passes and new risk areas are identified.  Your plan should be structured to operationalize the identification of risk areas and address them as they arise in your practice.

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John H. Fisher

Health Care Counsel
Ruder Ware, L.L.S.C.
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P.O. Box 8050
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