Compliance Plans: Doctors’ Best Friend?

By: Albert R. Meyer, JD, MHA

Does your practice have a good compliance program in place? Do you really need such a thing? Provisions of the Patient Protection and Affordable Care Act (ACA) and accompanying regulations say so. In fact, a compliance plan will now be required as a condition of participation to become and continue to be a Medicare provider. While this compliance plan mandate may be viewed by physicians just another cost and burden with no financial upside, it can have many benefits as well. Implementing an effective compliance program can have the result of not only reducing liability risks, but can also allow a practice to reap monetary benefits.

The benefits of a well thought and implemented compliance program include:
• Development appropriate coding and billing systems that reduce up-coding AND down-coding resulting in less claims denials and better cash flow
• Detection of innocent billing mistakes and the ability to rectify such mistakes, thus reducing exposure to fraud and abuse allegations
• Reduce the risk of government audits and to withstand the scrutiny of one
• Discover and address deficiencies in clinical and operational policies
• Discover and address issues relating to management and employee awareness
• Through education and training, foster a culture that encourages prompt reporting of potential issues allowing for quick investigation and remedial action
• Mitigation of any potential criminal or civil sanctions
In addition to the prospect of losing Medicare participation credentials, there are additional consequences for not having a good compliance program. Claims of fraud and abuse could damage a once solid reputation. Further, the costs of defending investigations, administrative proceedings and court actions can be in the hundreds of thousands of dollars, regardless of the size of your practice. Remember, the federal False Claims Act will consider each inappropriately coded line item on a CMS 1500 billing form as a separate violation, meaning that one inappropriate billed and coded patient episode may have with it 3, 4, 5 or more false claims violations. Each date of service for one patient may result in tens of thousands of dollars in civil monetary penalties as well as the potential for substantial jail time.
A compliance program and written compliance plans is not a magic pill in and of itself. It must be a living, breathing document, not just another big heavy binder that collects dust on a shelf. Since no clinical practice is the same, the plan and its implementation should be customized to fit the needs of an individual practice. Annual or semi-annual reviews should be done to include new issues facing the practice and to update the plan in response to any changes in state or federal laws or regulations.
As stated above, a compliance program is not a magic pill that will whisk away any problems. Criminal and intentional acts will not be excused. However, an organization having a working compliance program before any type of investigation may be able to use such a tool in mitigating any penalties that may be assessed. The Office of the Inspector General and Department of Justice will consider these efforts in its enforcement and sanction protocols and the compliance plan will be looked at as an effort on the part of the organization to discover and correct compliance issues.
There are many other benefits to having a compliance plan. The bottom line is it just makes good business sense. Just as your organization will not go without insurance, nor should it go without a good compliance program. In some ways a compliance plan is better than some insurance policies in that not only will it assist you in reducing liability exposure, but a good compliance program will identify actions that could be done to increase revenues. While there are many publications to help set up a compliance plan, it advisable to discuss your specific needs with experienced attorney who can assist in the development of a compliance working, sound compliance plan. Other experts, such as coding specialists, may also be called upon in this process.
Mr. Meyer is an attorney with over 20 years experience in health care law focusing on regulatory and transactional matters. His clients include physicians, medical equipment companies, surgery centers and diagnostic centers. Mr. Meyer works with chiropractors and other similar professionals throughout the country in integrating their practices. He can be reached at