Kansas City physicians have been frustrated for years over federal investigations into alleged fraudulent billing activity by medical practices. Billing for Medicare services is a complex and sometimes contradictory process; in light of this, many physicians simply concentrate on providing quality care (a noble priority) and hope the billing process takes care of itself.

Unfortunately, too many physicians have paid for this approach. It's no longer enough for physicians to hope that the federal government will not view a billing mistake as fraud. In fact, doctors could argue the federal approach to fraud presumes guilt and that they are held to a higher standard than other businesses.
Fair or not, though, doctors now must take proactive steps to prove their practice is complying with Medicare billing standards.

OIG Compliance Guidelines
On June 7, 2000, the Office of the Inspector General (OIG) for the Department of Health & Human Services released long awaited draft compliance guidance for individual and small physician group practices. These guidelines are designed to assist individual and small group physician practices in developing and implementing internal controls and procedures to prevent fraud and abuse in government health programs, including Medicare and Medicaid.

Over the last several years, the OIG has issued similar guidance for other health care entities, including hospitals, home health agencies, durable medical equipment companies, and nursing homes. In each case, the OIG outlined the seven elements of an effective compliance program with expectations for the provider under each of the seven areas.
Consistent with past guidance, the government emphasized that all health care providers, regardless of size, should have a system in place which will ensure no intentional violations of the laws which regulate their practice.

The government asserts that a physician practice would accomplish this goal by implementing a compliance plan based upon the seven elements set forth in the Federal Sentencing Guidelines:
• Establishing compliance standards through a code of conduct and written policies and procedures.
• Assigning monitoring efforts to a designated compliance officer or contact.
• Conducting comprehensive training and education on practice ethics and policies and procedures.
• Conducting internal monitoring and auditing focused on high-risk billing and coding issues.
• Developing accessible lines of communication to keep practice employees updated regarding compliance activities, such as community bulletin boards or discussions at staff meetings regarding fraudulent or erroneous conduct issues.
• 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.
• Responding appropriately to detected violations through the investigation of allegations and the disclosure of incidents to appropriate government entities.

Sound burdensome and expensive? It certainly can be, and many physicians have resisted compliance programs for just those reasons. The OIG attempts to address these issues by acknowledging compliance programs for small physician practices will have a substantially different structure than most other health care entities. They recognize that a small practice compliance program will not have a substantial annual budget, nor employees solely devoted to compliance, nor significant in-house training resources.

Still, the government emphasizes this does not allow physicians in small practices to ignore compliance recommendations. Specifically, the OIG encourages physician practices to participate in other compliance programs, such as those established by hospitals or other settings in which the physicians practice.
Given the enormous volume of business transactions conducted by physician practices every day, the risks of operating a non-compliant medical practice have never been higher. Physicians remain ultimately responsible for the legality and accuracy of what happens in their medical practices.

Therefore, it is incumbent upon physicians to take appropriate steps to ensure their business is run
according to the law.

Daniel Peters practices in the corporate and health law
practice groups of Husch & Eppenberger, LLC. Phone: 816.283.4676 or e-mail: daniel.peters@husch.com