Hospitals should have in-house Medicare billing compliance programs, including special training on federal fraud laws, if they want to earn some slack from federal regulators investigating billing irregularities.
That's one of the key components of recommendations being drafted by HHS' inspector general's office, which is charged with enforcing Medicare billing rules. MODERN HEALTHCARE*last week obtained a draft copy of the recommendations, which outline a model hospital compliance program.
HHS is expected to release the model compliance program publicly within weeks. Following the program would be voluntary for hospitals, but considering the enormous attention federal law enforcement officials are giving hospital billing practices, it could be a wise move.
In fact, the board of the American Hospital Association recently passed a resolution urging all hospitals to implement internal Medicare billing compliance programs to ward off the feds (See related story, p. 6).
HHS worked with hospital and physician groups in developing the program and considered comments from HCFA and the U.S. Justice Department. It will be the second such program designed by HHS' inspector general's office, which released a model compliance plan for clinical laboratories earlier this year.
According to the draft, the model program can be used by all hospitals regardless of size, location or ownership status.
The program is big on self-auditing and self-reporting of errors.
While the draft plan doesn't make any promises, an effective compliance program is touted as a "mitigating" factor in reducing a provider's administrative liability. The plan said HHS will support reduced penalties for providers if a compliance program was in place before a criminal or civil investigation began.
But Thomas Scully, whose Federation of American Health Systems worked with the inspector general on the program, still has some concerns.
"If you self-report to the (inspector general's office), and you are being a good guy, that does nothing for you with the Justice Department," said Scully, the federation's president.
He said people will be less likely to self-report because there's no guarantee federal prosecutors won't use the information against them.
Depending on the severity of the billing problem, violations can be civil, punishable by fines or suspension from Medicare; or criminal, punishable by fines, exclusion from Medicare and imprisonment.
In the draft, HHS acknowledged that starting a compliance program can be expensive, but it said the benefits of doing so will outweigh the costs of settling a civil, criminal or administrative complaint.
In one component of the plan, HHS recommended that hospitals employ a compliance officer to ride herd over an organization's billing procedures. It said the person should be a high-ranking executive not subordinate to the general counsel or comptroller's office.
That's one of the most controversial suggestions, said Michael Peregrine, an attorney with Gardner, Carton & Douglas in Chicago. Peregrine reviewed the draft compliance program at the request of MODERN HEALTHCARE.
"Individual institutions need to weigh for themselves the benefit of having the general counsel or a (delegate) thereof be the compliance officer because of the enormity of legal issues, including confidentiality and privilege, that arise in the compliance process," he said.
Among the other components of the model compliance program, HHS recommended that:
In-house training and education programs include reviews of federal fraud-and-abuse laws.
Internal audits at a minimum should look for illegal kickbacks for patient referrals.
Hospitals set up "hotlines" so employees can report problems.
And that hospitals report any problems to the feds no more than 30 days after discovering violations.