The federal government last week handed hospitals what they say they've been asking for: a common-sense Medicare billing compliance model that's voluntary and can be tailored to fit various types of institutions.
And while HHS Inspector General June Gibbs Brown said she "can't give any guarantees" that implementing a compliance program will get a hospital off easier if Medicare billing problems arise, she did say it would help.
"If a provider has an effective compliance program in place, it is taken into account in determining the nature and level of administrative sanctions, penalties and/or exclusions to be imposed," Brown said.
Hospitals, which had a mixed response to the first draft of the guidelines, praised the latest version. Referred to as an "evolving document," the compliance plan will be updated periodically to address changes in the law.
"The model will help hospitals establish better internal safeguards," said American Hospital Association President Richard Davidson.
On the surface, the easy-to-follow model is obvious, offering such guidelines as:
Every physician at a teaching hospital should document his or her physical presence during treatment rendered by a resident.
Hospitals should submit claims for only services they believe to be "medically necessary," not merely "appropriate."
Periodic training of employees is critical.
Hospitals should screen applicants to avoid hiring people who have recently been convicted of a criminal offense related to healthcare or who are excluded from participating in federal health programs.
The model plan, released by HHS last week, stays true to the major themes of an earlier draft obtained by MODERN HEALTHCARE (Sept. 22, 1997, p. 2).
The guidelines also address how and when a hospital should report any problems it finds on its own.
Brown said a hospital that "discovers credible evidence of misconduct from any source" will be given time to make a "reasonable inquiry" into the matter. If after that the hospital "has reason to believe that the misconduct may violate criminal, civil or administrative law," the hospital must report it to law enforcement officials within 60 days.
HHS was careful to note that a compliance plan "may not entirely eliminate fraud, abuse and waste" from the hospital system, and a bad program could be worse than no plan at all. A shoddy compliance plan "could result in greater harm or liability to the hospital than no program at all," the guidelines state.
Just as regular screenings can catch cancer early on, hospitals can significantly cut their legal vulnerability through a good compliance program, the model plan states.
"An effective compliance program may be a factor toward reducing a provider's risk of criminal, civil or administrative liability" in the event of an investigation, the plan states.
Brown said the government's compliance guidelines are meant to be voluntary and therefore won't be incorporated into the Medicare conditions of participation, but she made it clear that she expects all hospitals to implement a program as soon as possible. "It is reasonable to expect that every hospital would have something in place," Brown said. "I would hope that everyone would take from this guidance things that can apply to their hospital."
Brown could not estimate how much implementing a compliance program would cost. She did say that it would "cost some money for a first-rate program," but by avoiding fines and penalties the program "will probably be a savings in the long run."