Corporate compliance for home care: It’s not the law, but it might as well be

Have you developed a compliance plan for your agency yet? Why not?

Does the law require you to have a corporate compliance plan for your hospital-affiliated home health agency?


At a time when the federal government watches allegations of Medicare fraud like a motorcycle cop with a radar gun, can your agency afford not to have one? Probably not.

Bill Gates and others may have ushered in the Information Age, but crooked home health providers and the Department of Health and Human Services have introduced the Age of Scrutiny. Home care administrators now are forced to spend nearly as much time checking Medicare and Medicaid regulations as they do reviewing care plans or nurses’ notes.

A written corporate compliance plan can help your agency prevent fraud. Moreover, demonstrating that your employees follow a written compliance program can even mitigate any penalties your agency might incur for Medicare fraud, according to experts Hospital Home Healthconsulted for this special report.

What are you waiting for?

We asked attorneys and providers for their advice on compliance plans, and, not surprisingly, we discovered good, though differing ideas. But one common theme clearly emerges. All the experts say that if you don’t already have a corporate compliance plan for your agency, you’d better start working on one.

"A few years ago, the government began pushing the idea that home health agencies should become partners with the government in rooting out fraud," says John C. Gilliland II a health care attorney based in Crestview Hills, KY. "A compliance plan is a means to do that."

Gilliland notes that the Office of Inspector General (OIG) sees home health as "particularly vulnerable" to fraud and abuse for several reasons:

• Medicare covers an unlimited number of visits per patient.

• Beneficiaries carry no responsibility for payment (no copayment).

• Agencies are not required to explain the Medicare home health benefit or their billing process to beneficiaries.

• Non-medical home health services receive limited direct medical supervision.

And if you or any director you know has undergone an Operation Restore Trust Wedge Audit, you know the OIG means business. Inspector General June Gibbs Brownhas boasted that ORT recovers $17 of Medicare’s money for every dollar spent for investigation.

"If you have a bona fide plan in place and were convicted of fraud, under the Federal Sentencing Guidelines your sentence would be lighter," says Gilliland. "In home care, the most common problem of fraud and abuse is a falsified visit. An employee claims to have made a visit he or she didn’t make. The point of a compliance plan is to put in place procedures to see to it that doesn’t happen. A compliance plan address what can be done to avoid and detect falsified visits. A compliance program ensures you comply with the [Medicare] rules."

There is an equally compelling reason to have a corporate compliance plan, says Elizabeth Hogue a health care attorney in Burtonsville, MD. "We are seeing qui tam[whistleblower] suits suits. Many are brought by employees or former employees," says Hogue. "A compliance plan can be a mechanism to discourage those suits."

Protect yourselves from false accusations

Hogue explains that she helps clients develop specialized exit interviews to protect an agency from false accusations by disgruntled workers who resign or are fired. Hogue advises clients to open the interview with a statement such as, "According to our company compliance plan, now that you are leaving us, you have an obligation to tell us anything that you may know about fraud or abuse. And we are going to check to see if there’s anything you haven’t told us."

Hogue explains, "We ask a series of pointed questions and document everything. If they lied at an exit interview, then reported fraud and abuse, their credibility is shot. When were they telling us the truth? At the exit interview or later when they’ve made some accusation?

"We don’t mince any words," she continues. "When we implement a compliance plan at an agency, as part of the training, we tell them this is policy and procedure, and we tell them why. We put it in the context of you owe it to your colleagues and the agency to come first to us with any problem.’"

So as the OIG turns up the heat and as new Administrator Nancy-Ann Min De Parleearmarks $50 million more of the Health Care Financing Administration’s FY 98 budget to fight Medicare fraud, perhaps you are considering the need for a plan. But where do you turn?

There are several choices — your agency’s or hospital’s attorneys, other providers’ plans, and seminars. There’s even a resource from the feds, the OIG’s Model Compliance Plan for Clinical Laboratories1 But forget trying to find a ready-made compliance plan.

"Home care agencies must recognize they can’t adopt a cookie cutter plan," contends Gilliland. "You have to develop your own. Although your goals may be the same as the agency’s down the street, the worst thing in the world is off-the-shelf compliance programs. We give guidance, steps, specifics, but you’ve got to do it. If somebody approaches you with an off-the-shelf compliance plan, don’t just walk, away, run."

A do-it-yourself approach

Gilliland explains that process begins with forming a compliance committee that represents the departments of the agency. Headed by a compliance officer, someone in a high-level management position appointed by the agency director, the committee conducts an internal audit of an agency’s policies and procedures, Gilliland says.

"Again, you have to do this yourself," he reiterates. "But the value of a consultant is in giving directions. For example, I would ask a trusted nurse, How would I get a false claim through this agency if I wanted to?’ I’d learn how to close that loophole."

One provider who opted on its own to develop its own plan was Ruth Constant and Associates of Victoria, TX. Founded by Ruth Constant RN, BSN, MSN, EdD, who serves as president and chief administrator, the organization organization comprises three full-service, freestanding home health agencies. All are located in Texas — Beaumont Home Health Services, Port Arthur Home Health Services, and Wichita Falls Home Health Services. (See related story, p. 22.)

As compliance officer, Larry Leahy who also serves as director of program integrity, relied heavily on the Federal Sentencing Guidelinesand other resources to write his plan. Working for two years, from 1995-97, he gathered information from any source he could — the state home care association in Texas, HCFA, the OIG, and legal experts. He attended seminars and worked his way though piles of reading materials.

The first step in writing a compliance plan was to get the agency’s board of directors behind the effort, Leahy says. The board issued a resolution stating its support. (See Board of Directors Resolution, pp. 19-20.)This established the legitimacy of the agency’s intentions, not only for any government inspectors who might turn up but also for the employees. This way, a culture of compliance is also established, Leahy says, if it’s not already present.

Although the board of directors approved paying for legal advice, both Leahy and Constant thought they could create their own plan at a fraction of the cost. "It’s part of my job as administrator to comply with all applicable laws," says Constant, who has been in home care for more than 30 years. "Any administrator should be steeped in health care law anyway."

She has also survived a lengthy federal investigation, which was based on an employee’s false accusation, but over the course of 15 months between 1989 and 1991, she became painfully aware of tactics used by the FBI and the U.S. Attorney to prove home care fraud, even if there is no evidence. (See Hospital Home Health May 1997, pp. 59-62.)

"Why did we need an attorney? We got the FBI’s Good Housekeepingseal of approval. And if you’ve got the culture of compliance at your agency, why spend the money?"

Still, Constant does not suggest that all agencies eschew legal advice. "We recommend that a compliance plan go through your lawyer, but we did not elect to do that. We felt like we had everything in house," she says, referring to their policies and procedures manual. "All we needed to do was reduce the compliance plan to a document."

An advantage of using an agency, says Gilliland, is the "value of the attorney-client privilege. With consultants, like CPA’s who do it, you lose that attorney-client privilege."

Gilliland says his process begins with a review from a legal perspective of all the agencies documentation. "Everything from personnel policies, employee handbooks, writing billing procedures, contracts with any vendors, all contracts with the emphasis on doctors, providers. We’re looking for safe harbors, leases, surveys for the past two years, cost reports for the past two years, admission procedures. We often are asked, do you really need all this?’ Yes."

Employee education is a major factor in the success of any compliance program, Gilliland and others say. Gilliland can conduct the training, "or the client can do it, or the compliance officer. Sometimes, however, an outsider has greater impact on employees."

Compliance plan legal fees vary widely, experts say. Some consultants reportedly have been charging $30,000 to $40,000, but this is excessive, says Gilliland. He says his fees "run in the $5,000 to $10,000 range if an agency has a plan in place. The fees include a site visit. They have to do the internal study." Hogue declines to give a price range, saying it depends entirely on what she and her associates must do.

No matter what the cost, a compliance plan is a necessity these days, not a luxury. The important thing to remember, experts say, is that one size doesn’t fill all. Even the OIG model is only to be used as a guideline, Gilliland says. Your compliance plans must come from within your agency and its culture.


1. 62Fed Reg ,435 (March 3, 1997). n