Why Compliance Plans Make Sense

Clipboard with Checklist and Red PenHas your practice implemented a compliance program or considered improving an existing one?  Is it really necessary?  Prior to the Patient Protection and Affordable Care Act (ACA), the necessity for physician practices to develop compliance plans was merely voluntary.  However, the ACA will now require physician practices to have a fraud and abuse compliance plan in place as a condition of continuing to participate in Medicare or Medicaid programs.  Because the government first published guidelines in the year 2000 for the voluntary use of compliance plans in physician practices and has subsequently enacted a mandate in the ACA for compliance plans, many physician practices are proactively implementing them.  While this compliance plan mandate may be viewed by physicians as yet another administrative burden and expense to the practice, 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.  In fact, it could be more costly for the practice not to have one!

From a liability standpoint, having a compliance programs can:

–          Reduce innocent billing mistakes and exposure to fraud and abuse allegations

–          Allow a practice to avoid governmental audits

–          Identify weaknesses of internal policies and management

–          Prevent criminal or unethical conduct

–          Create an environment that encourages employees to report concerns, where an investigation and immediate corrective action can be taken if necessary

–          Reduce exposure to criminal and civil penalties and damages or administrative sanctions, including exclusion from federal programs

–          Enhance practice communication and potential whistleblower claims

These benefits all help protect the practice from the risks and expenses associated with potential fraud and abuse violations.  Consider also the damage to a practice’s reputation that can result from fraud and abuse allegations, the costs associated with the defense of an investigation, impact on operations of the practice, and the expenses of any overpayment recoveries.  Fraud and abuse related expenses may be avoided or minimized if effective policies are in place to guard against non-compliance.

Other benefits to the practice for having a compliance program extend beyond liability risks.  In addition to minimizing the risk of fraud and abuse allegations, compliance plans may:

–          Help identify under coding

–          Reduce claim denials

–          Facilitate prompt submission and payment of claims

–          Ensure practice employees know the rules and what is expected of them

–          Improve medical record documentation

–          Improve staff education and practice efficiency

Any office that takes measures to improve its efficiency and billing practice accuracy will likely see corresponding monetary benefits to its bottom line.  Using a compliance program as a way to improve business efficiency will also comply with the government’s position that a compliance program should be used as a living, breathing document – and not drafted to sit on a shelf.  It should be tailored to each individual practice, and reviewed and updated periodically to address any changes in the laws or regulations.

Although the existence of a compliance program will not excuse any crime, a practice that has a compliance program in place prior to any investigation will demonstrate it has asserted efforts to detect, address, and correct compliance issues.  These efforts will be taken into account by both the Office of Inspector General and Department of Justice when determining any level of sanctions, penalties or exclusions to be imposed against a practice, and will use these efforts to lower the practice’s liability.

In considering that a physician practice compliance plan will soon be mandatory in order to participate in Medicare and Medicaid programs, proactively implementing such a plan is a sound investment.  A compliance plan makes good business sense when it can reduce fraud and abuse liability risks of a physician practice, thereby avoiding expenses that will be incurred from an investigation, as well as potentially increase profits to the business.  Legal counsel can assist practices in implementing compliance plans tailored to meet specific needs.  Other experts, such as coding specialists, can assist as well.  Any expense associated with initiating a compliance plan that a practice will actually use will likely be offset by the benefits received.

29 thoughts on “Why Compliance Plans Make Sense

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