Final OIG compliance guidance eases small-practice concerns

In an attempt to resolve fears that small physician practices would be overwhelmed by trying to meet federal recommendations, the government says its voluntary compliance program is simply a road map for practices to follow.

But the actual map shows plenty of twists and turns. The Department of Health and Human Services Office of Inspector General (OIG) maintains the program is intended "to provide a road map to develop a program that best meets the needs of the individual practice. The guidance provides great flexibility as to how a physician practice could implement compliance efforts in a manner that fits with the practice’s existing operations and resources."

When a draft guidance first was issued in June (see State Health Watch, August 2000), health care attorneys said it was remarkable for its depth of detail on how individual and small- group physician practices could combat fraud and abuse in government health programs, especially Medicare and Medicaid. Although nothing in the draft was mandatory, there was a clear intention for physicians to implement a seven-step program designed to reduce the overall billing error rate. At that time, the Medical Group Management Association (MGMA) in Englewood, CO, said it had asked the OIG not to issue the guidance out of fear that many small practices would have difficulty meeting its expectations.

Aaron Krupp, government affairs representative for MGMA, had told State Health Watch that the organization was concerned about suggestions that practices conduct a baseline audit, which could be too costly for many small practices, and maintain a library of regulations and other materials, since practices don’t have the financial or human resources to spend on researching and assembling materials.

Overall, he tells SHW, the association was concerned that while the OIG said the guidance was not mandatory, the way it set forth recommended essential elements of a compliance program sent a mixed message, raising the possibility that practices that didn’t have all the
elements in place would be considered to not have a good compliance program.

In releasing the final guidance, Inspector General June Gibbs Brown said the agency is "encouraging physician practices to adopt the active application of compliance principles in their practice, rather than implement rigid, costly, formal procedures. Our goal in issuing this guidance was to show physician practices that compliance can become a part of the practice culture without the practice having to expend substantial monetary or time resources."

The OIG reiterated its assumption that the majority of physicians are honest and committed to providing high-quality medical care to Medicare beneficiaries.

The agency said a voluntary compliance program can help physicians identify both erroneous and fraudulent claims and help ensure that submitted claims are true and accurate. A program also can assist a practice by speeding up and optimizing proper payment of claims, minimizing billing mistakes, and avoiding conflict with self-referral and anti-kickback statutes.

Recognizing the concerns raised by MGMA, the OIG said the final guidance does not suggest that physician practices implement all seven standard components of a full-scale compliance program. While saying the seven components provide a solid basis upon which a physician can create a compliance program, the OIG acknowledged that full implementation of all components may not be feasible for smaller practices. So it emphasized a step-by-step approach for those practices to follow in developing and implementing a voluntary compliance program.

As a first step, the OIG said, physician practices could begin by identifying risk areas that, based on a practice’s specific history with billing problems and other compliance issues, might benefit from closer scrutiny and corrective or educational measures.

The seven steps suggested by the OIG include:

1. conducting internal monitoring and auditing through performance of periodic audits;

2. implementing compliance and practice standards through development of written standards and procedures;

3. designating a compliance officer or contact to monitor compliance efforts and enforce practice standards;

4. conducting appropriate training and education on practice standards and procedures;

5. responding appropriately to detected violations through investigation of allegations and disclosure of incidents to appropriate government bodies;

6. developing open lines of communication such as discussions at staff meetings regarding erroneous or fraudulent conduct issues and community bulletin boards to keep practice employees updated on compliance activities;

7. enforcing disciplinary standards through well-publicized guidelines.

The final guidance identifies four specific compliance risk areas for physicians:

• following proper coding and billing procedures;

• ensuring that services are reasonable and necessary;

• using proper documentation procedures;

• avoiding improper inducements, kickbacks, and self-referrals.

Those are areas in which the OIG has focused its investigations and audits related to physician practices.

MGMA president and CEO William Jessee, MD, says small medical practices "are pleased to see that the final compliance guidance is now more realistic and doable, especially for groups that lack the extensive resources needed to set up formal compliance programs."

He says the document reflected a number of suggestions the association had made, including emphasizing that following the guidance is voluntary rather than mandatory and clearing up confusion about the role of a compliance officer.

Due to the nature and responsibilities of an office manager in a small practice, MGMA had told the OIG it would be virtually impossible for one individual to serve as both office manager and compliance officer without violating the language in the draft guidance on conflicts of interest. That language was dropped from the final guidance.

Mr. Jessee says the association "will continue to urge the OIG to make laws and regulations relevant to compliance more accessible on the Internet since the guidance suggests that practices could develop their own written standards and procedures by creating a binder containing relevant Health Care Financing Administration (HCFA) directives and carrier bulletins and summaries of all informative OIG documents."

Mr. Jessee says that it would be difficult for many small medical groups to find the time to research and locate all relevant documents to put in such a binder and adds that he hopes the OIG "will strongly consider working with HCFA to establish one central location on the Internet where practices can access all pertinent documents."

[Access the final guidance at http:// www.hhs.gov/oig/new.html. Contact MGMA at (303) 397-7870.]