Mandatory Compliance Programs Are Coming

Does your medical practice or healthcare entity have a compliance program in place?  If not, the organization could be at significant risk of violating relevant healthcare laws, even just through inadvertence.  If there is a compliance program, have the policies been updated and are the policies followed?  Having a program without amending as necessary or following the applicable policies can be worse than not having anything at all.

Why is compliance so important in healthcare in the first place?  An expansion contained in the Affordable Care Act mandates compliance, which builds upon voluntary efforts over the last decade or so.  Essentially, any physician, hospital, durable medical equipment company and any other organization that provides medical services or supplies needs a compliance plan.  This requirement was highlighted by the Centers for Medicare and Medicaid Services in its July 2014 publication: Avoiding Medicare Fraud and Abuse: A Roadmap for Physicians, which is one of the first instances of guidance about the mandate.

Specifically, Section 6401(a)(7) of the Affordable Care act requires any provider of medical or other items or services or a supplier within a particular industry sector or category will need to implement a compliance program as a condition of participation in Medicare.  Before panic sets in though, the effective date of the requirement is to be determined by the Secretary of the Department of Health and Humans Services.  As of the date of publication of this article, no general rule implementing this requirement has been finalized or even proposed at this point in time.

One reason for the government to emphasize this new requirement is the increased atmosphere of enforcement that the government has been pursuing over the recent years.  Almost weekly there is an announcement from the Department of Justice about a large new settlement where a healthcare organization engaged in some type of improper conduct.  While kickbacks in the form of paying patient recruiters or billing for unnecessary or services not provided appear often, there are other settlements involving seemingly innocuous conduct.  For instance, one healthcare organization had to return money because the parties forgot to sign a lease and another settled a potential violation for misrepresenting the basis of compensation to providers.

Another reason is that the healthcare regulatory scheme is complex and it is easy to miss a required step.  The regulations force the healthcare industry to operate in a way that is nearly completely contradictory to how almost every other industry works.  It is a common refrain to say that if an idea sounds good and would work in any other industry, then it will likely violate a statute or regulation in healthcare.

While the government works on rules to implement the compliance mandate, healthcare organizations can develop and implement comprehensive compliance programs in anticipation of the mandatory requirement.  Pursuing such a course of action is clearly advisable because it will allow a healthcare organization to get ahead of the government and address the other concerns identified above that should encourage adoption of a compliance program.

In the absence of the regulations implementing the Affordable Care Act requirement, what should go into a compliance program?  The Office of the Inspector General of the Department of Health and Human Services promulgated advice over the years for many different types of organizations as to what constitutes a good compliance program.  The federal Sentencing Guidelines also offer insight.  Further, the following components will help create a solid foundation for any compliance program:

  1. A policy of internal monitoring and auditing;
  2. Implementation of compliance and practice standards;
  3. Designation of a compliance officer;
  4. Conducting training and ongoing education;
  5. Responding to potential and detected offenses as well as developing a corrective action plan;
  6. Creating and encouraging open lines of communication with and among employees; and
  7. Enforcing disciplinary standards.

These are only the barebones of what should inform a good compliance program.  Every healthcare organization should assess its operations and determine what kind of program will serve its needs.  As suggested by CMS in its publication, it is prudent to seek assistance.  Such assistance can come from knowledgeable legal counsel, professional associations or information provided by the government.

The time is now, do not delay.  Either review an existing program and assess whether updates are necessary, or create a new program if one does not exist.  Even though the government has yet to promulgate the regulations governing mandatory compliance programs, get ahead of the game and do not be caught unprepared.

Jackie Caynon, Esq. of Mirick O’Connell also contributed to this article.

About Matt Fisher

Matt is the chair of Mirick O'Connell's Health Law Group and a partner in the firm's Business Group. Matt focuses his practice on health law and all areas of corporate transactions. Matt's health law practice includes advising clients with regulatory, fraud, abuse, and compliance issues. With regard to regulatory matters, Matt advises clients to ensure that contracts, agreements and other business arrangements meet both federal and state statutory and regulatory requirements. Matt's regulatory advice focuses on complying with requirements of the Stark Law, Anti-Kickback Statute, fraud and abuse regulations, licensing requirements and HIPAA. Matt also advises clients on compliance policies to develop appropriate monitoring and oversight of operations.
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