1. Frequently Asked Questions About Compliance
Presented by: Penny Osmon
Coding & Reimbursement Educator
Wisconsin Medical Society

2. History of Compliance
Coding and compliance continue to be “hot topics” within the health care industry.
On September 25, 2000 the OIG issued its final “Compliance Program Guidance for Individual and Small Group Physician Practices” to assist physicians in developing compliance programs for their practices.
A direct result of HIPAA

3. What is a Compliance Program?
Management commitment to play by the rules
Not just “words”, on-going management and organizational efforts to prevent fraud, waste and abuse
Each compliance program is custom to the organization

4. What Does an Effective Compliance Program Need?
The compliance program guidance contains seven components which will provide a foundation in which a practice can create a voluntary compliance program.
This guidance provides a step-by-step approach to follow while developing and implementing a compliance plan.
The key = due diligence, culture and ethics

5. What Does an Effective Compliance Program Need? (cont’d)
A compliance program is a centralized process to promote honest, ethical behavior in the day-to-day operations of an organization, which will allow the organization to identify, correct, and prevent illegal conduct.
Good compliance is good business.
It is a system of:
FIND IT – FIX IT – PREVENT IT

6. The Seven Components Conducting internal monitoring and auditing
Implementing compliance and practice standards
Designating a compliance officer or contact
Conducting appropriate training and education
Responding appropriately to detected offenses and developing corrective action
Developing open lines of communication; and
Enforcing disciplinary standards through well-publicized guidelines.

7. The Seven Components
The OIG has acknowledged that full implementation of all 7 may not be feasible.
They suggest that the steps be implemented gradually and recommend Step 1 be auditing and monitoring.
Utilizing the OIG’s yearly work plan is a good basis for identifying areas to focus an audit on.

8. Getting Started
The first step to designing a compliance program is to perform a needs assessment.
This assessment is to identify areas which may be at significant risk.
These may include:
Medicare and Medicaid billing requirements
Anti-Kickback and Stark self-referral laws
State laws which regulate physician practices
Coding and documentation rules

9. Getting Started (cont’d)
Most physician compliance programs focus on billing, coding and documentation.
Perform a risk assessment to determine areas of highest risk.
Identify existing policies and procedures and review for accuracy.
Develop an action plan.

10. Why Perform a Risk Assessment?
Risk areas need to be addressed based on each practice’s specific needs.
Risk areas may differ substantially between a primary care practice and a general surgical practice.
OIG states that risk areas be tailored to the specific physician practice.

11. Coding & Billing Areas of Risk
Billing for services or items not rendered
Medical Necessity
Double billing
Billing for non-covered services
Misuse of provider identification numbers
Upcoding
Incorrect modifier usage
ABN’s
Incident-to

12. Chart Audit First step in identifying potential risks
Recommend chart notes per physician be reviewed
Analyze coding patterns
Review the charge ticket

13. What is the Standard for Developing the Standards?
Written policies and procedures addressing proper coding should reflect the current requirements described in the applicable statutes, regulations, federal, state and private payers requirements.
The standards should be clear and communicated to all employees.

14. Development of Standards
Review existing policies and procedures
Develop a plan based on specific practice needs
Draft polices and procedures and obtain appropriate approvals
Educate staff

15. “Any health care entity which does not have a compliance program is institutionally nuts’” Karen Morrisette Deputy Chief of the Criminal Division Division Fraud Section of the U.S. Department of Justice 15

16. Fact or Fiction?
There are many myths regarding what you can and cannot do about compliance issues, fees and charges.
There is some fact in the myths; however, there is much distortion from these being interpreted by many people.
Lets explore some of these…

17. You Can’t Ask a Colleague at Another Physician Office What They Charge for a Service
In some cases you can ask a colleague their charge.
If you are not “competitors” with the other practice, no antitrust issues arise.
Same specialty in the same community may pose a riskier situation and may violate Section 1 of the Sherman Antitrust Act.

18. You Can’t Charge Self Pay Patients Less Than Your Standard Fee
You may charge your self-pay patients less than your standard fee.
You may even apply “no charge” to an uninsured or self-pay patient.
The OIG states that it does not use your discounted or free care in the calculation of your usual charge.

19. What about Medicaid?
Wisconsin administrative code, DHS Chapter 1 defines “usual and customary charge” as the provider’s charge for providing the same service to person’s not entitled to MA benefits (DHS (181)
DHS 106 states that the provider has a responsibility to retain as evidence, a copy of the usual and customary charges to recipients and to persons or payers who are not recipients (DHS (9)(c)

20. For most services, providers are required to indicate their usual and customary charge when submitting claims. The usual and customary charge is the provider’s charge for providing the same service to persons not entitled to the program’s benefits. For providers using a sliding fee scale, the usual and customary charge is the median of the individual provider’s charge for the service when provided to non-program patients. For providers who have not established usual and customary charges, the charge should be reasonably related to the provider’s cost for providing the service.
Source: Forward Health On-line Handbook, 2009

21. You Don’t Need a Compliance Plan If You Are a Small Practice
Small practices are not immune to the rules and regulations pertaining to compliance.
For every entity, whether it’s a one-physician practice or one thousand, the rules and regulations apply to all providers who bill Medicare/Medicaid and third-party payers.

22. You Can’t Charge a Medicare Patient for a “No Show” Appointment
In 2007, CMS issued a transmittal stating that you can bill a Medicare patient for a missed appointment.
Transmittal 1279
CMS also stated in their policy that in order to charge a Medicare patient for a missed appointment, you also have to charge non-Medicare patients for them.
Can’t bill Medicare

23. I Can Waive Co-pays and Deductibles
You are able to reduce the cost of care for Medicare patients in the form of waivers if the patient is experiencing financial hardship.
The Health Insurance Portability & Accountability Act (HIPAA) have listed requirements that must be met in order to waive co-pays and deductibles. 42 USC §1320a-7a(i)(6)(A).
Don’t offer the waiver as part of any advertisement or solicitation and
Don’t routinely waive co-pays and deductibles and
You must either
Waive the co-pay and/or deductible amounts after determining in good faith that the individual is in financial need; or
Waive the copy and/or deductible after making reasonable collection efforts that fail to obtain payment

24. I Can Waive Co-pays and Deductibles (cont’d)
With the exception of hardship, you may not waive co-pays and deductibles for which patients are required to pay under indemnity, HMO or PPO plan
Determining financial need
Are they eligible for Medicaid?
Use customary methods

25. I Have to Bill Medicare My Lowest Fee
Providers are not required to give Medicare their lowest fee.
The law states that you cannot bill Medicare for items or services “substantially in excess” of your usual charges.
But, what’s the point?
You will rarely get more than the “allowed amount”

26. You Have to Charge All Payers the Same
You can have multiple fee schedules.
Verify through contract review for “most favored nation” clause.
Maintaining multiple fee schedules may be more work than its worth.
There is no federal or state documentation to support either way.

27. What About Documentation?

28. What is Documentation?
Medical record documentation is required to record facts, findings and observations about a patient’s health.
This includes past and present illnesses, examinations, tests, treatments and outcomes.
The medical record documents in chronological order the care of the patient.
It is unique to each patient.

29. General Principles of Medical Documentation
The medical record should be complete and legible.
The documentation for each encounter should include:
The reason for the encounter and relevant history; physical exam findings and test results
Assessment, clinical impression or diagnosis;
Plan of care; and
Date and legible identity of the observer

30. May I Bill for Services Not Yet Documented?
Documentation of the service you provided a patient must be documented when you submit a charge.
The CPT and ICD9 codes reported on the claim form should be supported by the documentation in the medical record.
“If its not documented – its not done.”

31. Supervision of Non-Physician Practitioner Documentation
There is no federal statute or benefit under Medicare that requires a physician to co-sign a mid-level’s progress note, APNP or PA.
CMS leaves this up to individual states, each state has its own rule.
Check with carriers also, they may have different requirements.
Wisconsin does not require a co-signature by the supervising physician.

32. Fraud vs. Abuse
Fraud – making false statements or representations of material facts in order to obtain some benefit or payment for which no entitlement would otherwise exist.
Abuse – practices that, either directly or indirectly, result in unnecessary costs to the Medicare program or other payer.

33. False Claims Act
Prohibits knowingly filing a false or fraudulent claim for payment to the government, knowingly using a false record or statement to obtain payment on a false claim or conspiring to defraud the government by getting a false claim paid.

34. False Claims Act
31 U.S.C. §3729
Makes providers liable for both damages and penalties
Civil and Criminal Fines
Criminal (Up to $25,000 and/or up to 5 years imprisonment)
Civil ($5,500 -$11,000 per claim)
Plus an additional up to three times the damages sustained by the government
Most providers are also sanctioned from the program

35. Additional References
Social Security Act
Medicare Claims Processing Manual
Section 42 of the CFR
Documentation Guidelines for Evaluation and Management Services (1995/1997)
Federal Register
6/18/2007
9/15/2003
10/5/2000

36. Questions/Comments/ Discussion Thank You. penny. osmon@wismed
Questions/Comments/ Discussion Thank You!