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Developing an Effective Compliance Process


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Title: Developing an Effective Compliance Process

Developing an Effective Compliance Process
  • November 2008
  • Jeanne Chapdelaine

  • Definition
  • Purpose
  • Elements
  • Implementation
  • Work Plan
  • Case Studies
  • Note All quotes in this presentation are from
    the document
  • DHS/OIG OIG Compliance Program for Individual
    and Small Group Physician Practices

Can You Prove Effectiveness?
  • Do ALL employees know what the compliance program
  • Do they know who their compliance officer is?
  • Is your plan document still dated 1998?
  • Do the receptionists know their role in
    compliance? Do the nurses?
  • Is there an annual work plan?
  • Do your reviews routinely show repeaters?
  • Is a review actually done (vs. talked about)? 

Basic Tenets
  • Compliance efforts must be practical.
  • Compliance efforts must be achievable.
  • 100 compliance is not possible.
  • Compliance should be defined in the most
    positive light.
  • A compliance plan should be fluid changing with
    time and circumstance.
  • A system built around compliance creates optimal
    revenues and operational efficiencies.

Basic Tenets
  • Compliance plans are simply continuous quality
    improvement (CQI) efforts
  • There tends to be a negative perception of them,
    though its really a positive process.

The Elements (OIG Recommendations)
  • 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
  • Enforcing disciplinary standards through
    well-publicized guidelines

First Step The Risk Assessment
  • Organizational Sentencing Guidelines
  • An essential component of the design,
    implementation, and modification of an effective
    program isperiodically assessing the risk of
    the occurrence of criminal conduct
  • Organizations must periodically prioritize their
    compliance and ethics resources to target those
    potential criminal activities that pose the
    greatest threat in light of the risks identified.

First Step The Risk Assessment
  • A compliance risk assessment follows three steps
  • Step 1 Identify risk areas
  • Step 2 Identify compliance risks
  • Step 3 Prioritize risks.
  • Do this once a year, because your risks change
    over time.
  • (Caveat Other compliance efforts
  • should continue throughout the year)

First Step The Risk Assessment
  • A risk area is a general grouping of activities
    that could lead to violations for non-compliance,
    such as HIPAA and Coding and Billing, or
  • A compliance risk is a plain-English statement of
    daily activities that, if not performed
    correctly, could lead to a violation.

First Step The Risk Assessment
(No Transcript)
Risk Areas Identifying Your Risks
  • Previous internal audit findings
  • Issues that showed errors or confusion
  • Pay special attention to recommendations from
    last years audit you should have documented
    your follow through!
  • Production reports Look at frequently provided
    services (volume and dollars) dont focus
    solely on E/M services
  • Payer information/bulletins/LCDs
  • WPS probe reviews

Risk Areas Identifying Your Risks
  • OIG work plan items, especially repeaters
  • OIG work plan findings
  • Fraud alerts
  • Issues common to specialties
  • New circumstances (providers, specialties,
    services, software, tools, staff, etc.)
  • Comments (staff, provider, etc.)

Risk Areas Prioritizing Your Risks
  • Prioritize risks into high, medium, low (or 1, 2,
  • Can be subjectively or objectively determined
    (e.g., points for various aspects)
  • High priority issues should have more intensive
    and quicker reviews than low priority issues

Risk Areas OIG
  • Coding and Billing
  • Billing for services not rendered
  • Provider number issues
  • Up-coding
  • Unbundling
  • Incident to
  • Re-assignment
  • Coding process (authorities, policies, etc.)

Risk Areas OIG
  • Medical Necessity
  • Who determines medical necessity (physician,
  • Does documentation convey medical necessity?

Risk Areas OIG
  • Documentation
  • (OIG One of the most important compliance
  • Forms
  • EMRs
  • Stand alone issue (progress notes must stand

  • The Purpose

The Purpose
  • IOG says A well-designed compliance program can
  • Speed and optimize proper payment of claims
  • Minimize billing mistakes
  • Reduce the chance that an audit will be conducted
    by CMS or the OIG
  • Avoid conflicts with the self-referral and
    anti-kickback statutes.

The Purpose
  • We say While not a sexy undertaking, a
    well-designed compliance program can
  • Identify appreciable risks
  • and opportunities for
  • revenue AND compliance
  • Identify and resolve operational problems
  • Force a continuing improvement program
  • Education
  • Policies and procedures (development and
  • Monitoring.

  • The Elements
  • (What the OIG Really Says)

The Elements 1 Monitoring
  • Conduct internal monitoring through the
    performance of periodic audits. Efforts assess
  • Whether the practices standards and procedures
    are in fact current and accurate
  • Whether the compliance program is working, i.e.,
    whether individuals are properly carrying out
    their responsibilities and claims are submitted

The Elements 1 Monitoring
  • There are two types of reviews that can be
  • performed as part of this evaluation
  • A standards and procedures review
  • It is recommended that an individual(s) in the
    physician practice be charged with the
    responsibility of periodically reviewing the
    practices standards and procedures to determine
    if they are current and complete.

The Elements 1 Monitoring
  • A claims submission audit
  • Ideally includes the person in charge of billing
    and a medically trained person (e.g., registered
    nurse or preferably a physician (physicians can
    rotate in this position).
  • Each practice needs to decide for itself whether
    to review claims retrospectively or concurrently

The Elements 1 Monitoring
  • A baseline review helps monitor improvements
    over time.
  • Dont do this when you KNOW problems exist
    attempt to resolve them first otherwise, youre
    documenting your current bad state.
  • The OIG recommends that claims/services that were
    submitted and paid during the initial three
    months after the education and training program
    be examined.

The Elements 1 Monitoring
  • The baseline should also examine the claim
    development and submission process, from patient
    intake through claim submission and payment, and
    identify process elements that may contribute to
    non-compliance or that may need to be the focus
    for improving execution.
  • The baseline review also establishes a
    consistent methodology for selecting and
    examining records, which serves as a basis for
    future audits.

The Elements 1 Monitoring
  • Following the baseline audit, periodic audits
    should be conducted at least once each year
  • Although there is no set formula to how many
    records should be reviewed, a basic guide is five
    or more records per Federal payer
  • or 5-10 records per physician.
  • Of course, the larger the sample size, the
    larger the comfort level.

The Elements 1 Monitoring
  • Many practices conduct an annual audit and then
    report to providers about where they are failing.
  • Better a proactive program that continually
    assesses, educates, and mentors one that
    prevents coding and billing problems before they

The Elements 1 Monitoring
  • The OIG is aware that this may be burdensome for
    some physician
  • practices, so, at a minimum, we
  • would encouragea review of
  • claims that have been reimbursed by Federal
    health care programs.
  • If problems are identified, determine whether a
    focused review should be conducted on a more
    frequent basis and what efforts will mitigate the
    problem (e.g., education).

The Elements 1 Monitoring
  • Practical monitoring efforts
  • Compare coding/billing to
  • Own patterns over time
  • Same-specialty peers patterns
  • Within/outside the practice
  • Create a schedule and stick to it (even if its
    only two cases per month per provider)
  • Keep it simple (or it wont get done)

The Elements 1 Monitoring
  • Ensure your reviews include
  • Process
  • Outcomes.

The Elements 1 Monitoring
  • Develop a set of warning indicators. These might
  • Significant changes in the number or types of
    claim rejections or reductions
  • Correspondence from carriers/insurers challenging
    claims medical necessity or validity
  • High volumes of unusual charge/payment adjustment
  • Illogical patterns or unusual changes in the
    pattern of CPT/HCPCS or ICD9 code utilization.

The Elements 1 Monitoring
  • Scan CPT frequency reports

The Elements 1 Monitoring
  • Assess E/M Utilization
  • Depending on the size of your practice, this can
    be a time consuming effort do well, but once you
    do it the first time, its easy to update.
  • By provider
  • By department
  • Clinic total

The Elements 1 Monitoring
The Elements 1 Monitoring
Source CMS National E/M Utilization Summary
Report Surgery, January through December 31,
The Elements 1 Monitoring
  • Assess bread and butter services
  • Include the services that comprise each
    physicians typical schedule
  • Its OK to use the 80/20 rule as long as you
    dont ignore the 20
  • Document successes!!

The Elements 1 Monitoring
  • Caution Consider your comparative data sources
  • Payer-specific reports might not be consistent
    with the practices patient or case mixes
  • External data includes everyone elses mistakes
  • The message benchmarks should not be your goal

The Elements 2 Policies Procedures
  • Implement compliance and practice standards by
    developing written standards and procedures.
  • Document your plan
  • Keep it general regarding tactics. Tactics
    should be in your annual work plans, not the plan
    document, which should contain statements like

POLICY It is the responsibility of every
physician and employee to report, through
internal reporting mechanisms, incidences they
believe might be in violation of applicable rules
and laws.
The Elements 2 Policies Procedures
  • POLICY It is the responsibility of every clinic
    physician and
  • employee to abide by applicable laws in this
    Compliance Plan
  • and to support our compliance efforts. It is the
    clinics responsibility
  • to provide the education and resources to make
    that possible and
  • to provide an open door that facilitates
    comments from all.
  • POLICY The Clinic will take appropriate action
  • substantiated claims of wrongdoing, which could
    include discipline,
  • termination of employment, and criminal charges.
    No intentional
  • violation of Medicare or other applicable law
    will be tolerated.
  • POLICY Employees making a report will not be
    subjected to
  • reprisal, discipline, or discrimination due to
    making a report.

The Elements 2 Policies Procedures
  • Follow the 7 elements
  • Dont suffer over it so much it gets put off
    just get it done. You can always add
  • Document each years Risk Areas (attachment to
  • Document each years Work Plan (more later)
  • Develop Policies and Procedures for
  • Coding
  • Revenue Cycle processes

The Elements 2 Policies Procedures
The primary compliance documents a practice
would want to retain are those that relate to
educational activities, internal investigations
and internal audit results.
The Elements 2 Policies Procedures
  • Document your
  • Compliance efforts
  • Policies and procedures
  • Education (including attendance)
  • Communication
  • Monitoring
  • Progress reports (point out successes!)
  • Corrective actions and special efforts
  • Discipline
  • Resources

The Elements 2 Policies Procedures
  • Maintain files for each provider/department (much
    like a medical record)
  • Information to include
  • Problem list or log
  • SOAP progress notes
  • Compliance review results and follow-up efforts
  • Intervening communications (phone notes)

The Elements 2 Policies Procedures
  • E/M statistical reports compared to previous
    results, internal and external benchmarks
    (include the reviewers interpretation)
  • Summaries of meetings and discussions
  • Action item lists
  • The providers
  • The reviewers

The Elements 3 Compliance Lead
  • Designate a compliance officer or contact(s) to
    monitor compliance efforts and enforce practice
  • Ideally one senior level person (i.e., having
    authority) needs to accept the responsibility of
    developing a plan and overseeing adherence to
    that plan.
  • This person can be in charge of all compliance
    activities or play a limited role merely to
    resolve the current issue.

The Elements 3 Compliance Lead
  • In a formalized institutional compliance program
    there is a compliance officer responsible for
    overseeing the implementation and day-to-day
    operations of the program.
  • Resource constraints often make it impossible to
    designate one person to be in charge of
    compliance functions in a smaller clinic.

The Elements 3 Compliance Lead
  • It is acceptable to designate more than one
  • employee with compliance monitoring
  • responsibility the practice could describe in
  • standards and procedures the compliance
  • functions for which designated employees would
  • be responsible.
  • For example, one employee could be responsible
  • preparing written standards/procedures. Another
  • could be responsible for arranging periodic
  • and ensuring billing questions are answered.

The Elements 4 Training/Education
  • Conduct appropriate training and education on
    practice standards and procedures.
  • There are three basic steps for setting up
    educational objectives. Determine
  • Who needs training (coding/billing and
  • The type of training that best suits the
    practices needs (e.g., seminars, in-service
    training, self-study or other programs)
  • When and how often education is needed and how
    much each person should receive.

The Elements 4 Training/Education
  • Training may be accomplished through a variety of
  • In-person training sessions (on-site or outside
  • Distribution of newsletters
  • Webinars
  • Online or module training
  • Even a readily accessible office bulletin

The Elements 4 Training/Education
  • Regardless of the training method used, education
    must be communicated effectively. Make sure
    attendees come away with a better understanding
    of the issues covered. To do this
  • Conduct interactive meetings
  • Ensure feedback and education builds on itself
    (continuing education, not solo events)
  • Ensure education is policy driven (not Sally
    teaching Barb how shes always done it).

The Elements 4 Training/Education
  • For providers, the best learning tools are
  • The results of documentation reviews (their own
  • E/M utilization reports (with an interpretation).

The Elements 5 Responding
  • Respond appropriately to detected offenses and
    develop corrective action by investigating
    allegations and disclosing incidents to
    appropriate government entities.
  • When a practice detects a possible violation, the
    next step is to develop a corrective action plan
    and determine how to respond to the problem.

The Elements 5 Responding
  • If noncompliance is suspected, the practice must
    investigate to determine whether a significant
    violation of applicable law (or compliance
    program requirements) has occurred. If so, it
    must take decisive steps to correct the problem,
    which may include
  • Corrective action plan
  • Return any overpayments
  • Report to the government
  • Refer to law enforcement authorities.

The Elements 6 Communication
  • Develop open lines of communication.
  • This truly sets the tone for all employees about
    the importance the clinic places on compliance.
  • Regular staff meeting agenda item (discussions on
    how to avoid erroneous or fraudulent conduct)
  • Clinic bulletin boards
  • Compliance Idea of the Week

The Elements 6 Communication
  • Compliance hot lines or email addresses
  • Compliance Comment box
  • Widespread sharing of payer updates
  • Communicate the likelihood of anonymity, but do
    not promise it.
  • Ensure safety That there will be no retribution
    for reporting conduct a reasonable person acting
    in good faith would believe to be erroneous or

The Elements 7 Discipline
  • Enforce disciplinary standards through
    well-publicized guidelines.
  • Sanctions should be
  • Consistent and appropriate
  • Flexible enough to account for mitigating
  • Also, consider sanctions for those who should
    have, but did not, detect or report an issue.
  • Including disciplinary guidelines in training and
    procedure manuals is sufficient.

The Elements 7 Discipline
  • Disciplinary actions could include
  • Warnings (oral)
  • Reprimands (written)
  • Probation
  • Demotion
  • Temporary suspension
  • Termination
  • Restitution of damages
  • Referral for criminal prosecution.

The Elements
  • as recognized by the OIG and the health care
    industry, there is no one size fits all
    compliance program, especially for physician
    practices. Rather, it is a set of guidelines that
    physician practices can consider
  • This suggests its better to do something
    anything than nothing.
  • If resources are an issue, consider taking on
    only two of the seven elements the first year and
    adding one each year

  • Implementation

Implementation Internal vs. External
  • Clinics can conduct much of the internal baseline
    review themselves.
  • Involve different staff from different
    departments to conduct different sections of the
  • This helps spread the message across the
  • Also consider team reviews
  • Pro cross functional education and input
  • Con can be more costly in time investment.

Implementation Internal vs. External
  • Outside risk assessment and reviews should be
  • To verify the internal process is working
    (review the reviewer studies)
  • If the practice does not have the resources or
    expertise to perform baseline or subsequent

Implementation Options Work Plan
  • Again, focus on your Risk Areas
  • To assist physician practices in performing this
  • assessment, the OIG has developed a list of four
  • potential risk areas affecting physician
  • Coding and billing
  • Reasonable and necessary services
  • Documentation
  • Improper inducements, kickbacks and
  • This list of risk areas is not exhaustive, or all
  • encompassing. Rather, it should be viewed as a
  • point for an internal review of potential
  • within the physician practice.

Implementation Options Sample Work Plan
  • A positive program gets better results
  • Keep it simple (or it wont get done)
  • Monitor effectiveness
  • Communicate and educate

  • Case Studies

Case One Hospital/Clinic System
  • Rotating interdisciplinary team conducts
    quarterly reviews of claims
  • Lab/nursing/physician/coder (ad hoc members PRN)
  • Results shared with compliance committee and
    employees involved with each case themes shared
    in staff meetings
  • Pro Education for many
  • Cons Lack of consistency, except for coder
    reviews get delayed for scheduling reasons

Case Two 30-Provider Clinic
  • Coding team conducts quarterly reviews of claims.
    Results are shared with revenue/compliance
    committee (cross-functional team) themes shared
    in staff meetings.
  • Pro Education for many
  • Cons Lack of objectivity reviews get delayed
    for time reasons different communication
  • Recent alteration Same team, but one person
    focuses on audits and communication others
    handle day-to-day coding issues.

For More Information
This presentation was prepared by Jeanne M.
Chapdelaine, Director 952.548.3374 jchapdelaine_at_wi Partners Healthcare Consulting A
Service of Wipfli LLP 7601 France Avenue South,
Suite 400 Minneapolis, MN 55435 952.548.3400
Fax 952.548.3500
2009 OIG Work Plan Table of Contents
Full document http//
s/docs/ workplan/2009/WorkPlanFY2009.pdf
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