A new federal government publication is designed to help physicians in solo or small group practices avoid running afoul of fraud and abuse statutes in the Medicare and Medicaid programs.

Developed by the Office of the Inspector General (OIG) in the Department of Health and Human Services, the document describes a program that these small medical practices can put in place to identify and avoid compliance risks. It covers areas such as coding and billing, services that fit the definition of "reasonable and necessary," documentation standards, and "improper inducements, kickbacks, and self-referrals," according to a June 7 press release from the OIG.

Inspector General June Gibbs Brown likened the compliance program, which the government refers to as a "guidance," to "practicing preventive medicine." Its intent, she said, is to "identify and treat small problems before they become big problems."

The recommendations in the document, which is titled Compliance Program Guidance for Individual and Small Group Physician Practices, help physicians set up a program of internal controls and procedures to flag both inadvertent errors and deliberately fraudulent statements in Medicare and Medicaid claims. Should the government question a physician’s claims, having such a program in place will also show that the practice has made "a good-faith effort" to submit correct claims for the services it provides.

"An effective compliance program also sends an important message to a physician practice’s employees that while the practice recognizes that mistakes will occur, employees have an affirmative ethical duty to come forward and report fraudulent or erroneous conduct, so it can be corrected," the guidance document points out.

The guidance emphasizes that despite the perception among some physicians that the government’s focus is on ferreting out innocent billing errors and sending offending doctors to jail, the OIG states that that is not the case.

"We do not disparage physicians," the guidance states, and the OIG’s primary enforcement tool, the False Claims Act, "covers only offenses that are committed with actual knowledge of the falsity of the claim, reckless disregard, or deliberate ignorance of the falsity of the claim."

In an effort to allay physicians’ anxiety about penalties they face if they inadvertently submit an incorrect Medicare or Medicaid claim, the guidance explains that "When billing errors, honest mistakes, or negligence result in erroneous claims, the physician practice will be asked to return the funds erroneously claimed, but without penalties."

Elements of Effective Programs

The guidance describes seven elements that all effective compliance programs should contain. These are the following:

• Establishing compliance standards through the development of a code of conduct and written policies and procedures that indicate areas where the practice could be at risk for fraudulent or erroneous conduct. These potential risks include billing for services not rendered, submitting claims for equipment and supplies that are not reasonable and necessary, billing for noncovered services as if they were reimbursement eligible, knowing misuse of provider identification numbers, and upcoding the level of service provided.

• Assigning compliance monitoring efforts to a designated compliance officer or contact.

• Conducting comprehensive training and education on practice ethics, policies, and procedures.

• Conducting internal monitoring and auditing focusing on high-risk billing and coding issues through performance of periodic audits.

• Developing accessible lines of communication, such as discussions at staff meetings regarding fraudulent or erroneous conduct issues and community bulletin boards, to keep practice employees updated on compliance activities. It should be clear that there will be no retribution for reporting errors and confidentiality will be maintained.

• Enforcing disciplinary standards by making clear or ensuring employees are aware that compliance is treated seriously and that violations will be dealt with consistently and uniformly. Employees should understand that termination of the offending individual is an option and that employees who fail to report errors of which they are aware are also subject to discipline.

• Responding appropriately to detected violations through the investigation of allegations and the disclosure of incidents to appropriate government entities. Frequent rejection or suspension of submitted claims or the government’s decision to place a medical practice on "pre-payment review" should be signs that a compliance program is not achieving its goals.

The suggested program guidelines are not mandatory nor are they an exhaustive list of principles and procedures physicians should follow, the OIG report notes. It points out as well that the office recognizes that "full implementation of all elements" of the recommended compliance program "may not be feasible" for all solo and small group practices.

Appendices

Appendices to the guidance describe additional risk areas of which physicians should be aware, the civil and administrative statutes that relate to fraud and abuse in Medicare and Medicaid claims, and how to go about reporting or getting clarification on incorrect claims.

The guidance on compliance programs, which is still in draft form, was scheduled to be published in the Federal Register in late June. From that time the public will have 45 days to submit comments to the OIG, which intends to issue the final version later this year. Brown, the HHS inspector general, made a strong pitch in her press release for physicians to convey their responses about the guidance to the OIG. "We know physicians are busy," she said, "but we hope they will take the time to review the draft guidance and provide us with thoughtful comments. Practicing physicians can offer invaluable insights about how they and their colleagues can put voluntary compliance plans into place in their practices."

APA’s Office of Healthcare Systems and Financing is sending copies of the draft guidance to APA committees that have expertise on related issues. Once APA receives input from those committees, it will develop a response that will be forwarded to the OIG in the comment period.

"Our goal is to provide APA members with appropriate information and useful resources as they comply with the OIG’s program guidance," said Sam Muszynski, director of the Office of Healthcare Systems and Financing.