The Importance Of Hospital Compliance

Friday, August 12th, 2016

In the healthcare industry, compliance is something everyone in a hospital should focus on. The U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) publishes a Work Plan every year that outlines new and ongoing healthcare reviews. This Work Plan is a how-to guide on everything the OIG plans to review, which allows you to come into compliance well ahead of inspections.

Compliance should be accomplished by every employee in your hospital. A wrong report or incorrectly filed document could mean the difference between compliance and possible fines. Running your own internal checks and drills is a good way to prevent accidental misfiling. Luckily, the Work Plan allows you to develop compliance plans before any inspections occur.

The Work Plan cites specific code sections, enabling your compliance attorneys to quickly reference the law while they develop a compliance plan. Compliance is especially important for Medicare Parts A and B and for Medicaid, or your hospital could face CMS investigations.

Compliance regarding Medicare Parts A and B

The OIG will review major areas like general hospital policies and billing practices, medical equipment standards, and prescription practices. Participating hospitals must submit reports to the Centers for Medicare and Medicaid Services (CMS) for reimbursement.

According to the Work Plan, the OIG will also review reimbursement practices. For example, hospitals are entitled to reasonable reimbursement of employee salaries. So, you cannot submit a reimbursement request for a $450,000/yr salary for a first year nurse. Hospitals may also submit reports for expenses spent on defective medical equipment, assuming that they took reasonable measures to ensure quality control.

The OIG also reviews hospitals for best business practices. The review compares pricing and services offered by other freestanding clinics in the area to assess whether or not there is a great disparity in price and quality. You may want to develop compliance procedures to ensure that your hospital meets all of the paperwork and filing requirements for these various claims.

The OIG will review reimbursement claims for validity. For example, only a few dental procedures are covered by Medicare, like tooth removal prior to radiation therapy. This also includes reimbursements for stem cell therapy, radiation treatment, and several other procedures. Finally, the OIG will examine the billing practices for prescription drugs. Particularly, your hospital’s sales price will be compared with the manufacturer’s price. A good general rule for your hospital is to keep your prices within a fair market price.

Medicaid compliance

Similar to Medicare reviews, the OIG will also review hospital programs under Medicaid coverage. For example, reviews are done of payments for multi use of the drug Herceptin and for adult health care services such as therapeutic and social programs. Another area the OIG identified for review was HCBS waiver program payments. Specifically, Medicaid will reimburse for these expenses if provided under a written plan of care, but not for generic room and board expenses.

The OIG will only review for general compliance with regulations. The group will not examine every single program to ensure that every paperclip is counted. Reviews target a handful of programs to ensure that hospitals and states are generally following the rules.

CMS investigations due to non-compliance

If your hospital is found to be out of compliance, you may be subject to fines, exclusion from programs, or even criminal prosecution. The OIG has excluded hospitals and entities for a variety of reasons including non-compliance with program rules, patient neglect, and abuse and license suspensions.

The OIG also cooperates closely with the Department of Justice (DOJ). If a serious discrepancy or fraud is uncovered, it will forward that information to the DOJ. For example, if the OIG discovers that your hospital submitted a fraudulent claim for Medicare reimbursement, it will refer the case to the FBI. You can expect the OIG to investigate for fraud, waste, and abuse in many areas, including diagnostic radiology and labs, ambulance services, and durable medical equipment. Formal investigations may also be done regarding prescription drugs and home, community, and personal care agencies.

The Work Plan outlines the OIG’s entire audit process. You can carefully review this report to get all the answers you need to bring your hospital into compliance. Attorneys experienced in healthcare policy can help your hospital craft a reasonable implementation plan and schedule to ensure you are in compliance.

If you have questions about compliance for your hospital, call the experienced healthcare attorneys at Brown & Fortunato in Amarillo, Texas today. You can reach us at 806-345-6300 or Contact Us by email to learn more about our practice areas. We welcome you to visit our offices located at 905 S. Fillmore, Suite 400, Amarillo, TX 79101.

This information is subject to change. Please check for updates that are more recent than the published date of this article.