Healthcare institutions are established in order to meet the health needs of any country's population keen on seeking medical attention. As such, these institutions must make the provision of quality health services the main priority in their line of work. However, this is not usually the case as some healthcare providers engage in unscrupulous deals where they work towards benefiting themselves by offering illegal services. Every year there are numerous reports of health institutions and health providers who earn money illegally without sticking to the ethical guidelines set by involved healthcare agencies. Consequently, such healthcare providers and health institutions find themselves on the wrong side of the legal arena where they are fined or have their licenses revoked. To avoid such case scenarios is important for the administrators of any health care institutions to come up with compliance plans to ensure that the staff sticks to legal and regulatory requirements.
Real-time Fraud Case Example
As discussed, some healthcare providers and institutions defy the set legal and regulatory statutes and instead commit fraud. According to Healthcare Finance (2017), in the year 2017 alone, there have been more than 700 cases involving fraudulent activities in healthcare institutions across the US. These mounting cases of fraud are not only a headache for the healthcare industry but to both the federal and state governments as they deal with the implications that come along with such fraud cases. Most of the fraud cases involved fraud against the national healthcare schemes such as Medicare, Medicaid, and TRICARE. In this connection, the media is awash with reports of the greatest medical fraud of all times involving 412 medical providers flung across the US who together defrauded the government of $ 1.3 billion. According to Ruiz (2017), this mega-fraud occurred in 41 federal districts, and it took at least 1000 law enforcement officers and 350 OIG agents to deal with this mega operation. The involved parties in this fraud including doctors, nurses and pharmacists frauded the government through illegal billings which contravene the set legal and regulatory guidelines. Some of the illegal billings included billing Medicaid and medical for drugs that were never purchased. Additionally, these fraudulent doctors took money for rehabilitation tests and treatments that were never provided as well as selling prescription drugs on cash. Interestingly there were still other donors who wrote excessive prescriptions in a single month, a quantity that exceeded what all hospitals wrote for that one month. Furthermore, in one particular case in Delray Beach, an owner of a drug center recruited some addicts to make his schemes work in return offering them kickbacks in terms of trips to strip clubs, drugs and plane tickets. Perhaps the most visible form of fraud conducted by these particular fraudsters was involved in opioid epidemic with medical professionals distributing opioids and prescription narcotics illegally
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The fraud is a contravention of false claims act as the fraudsters, in this case, ganged up to siphon government funds through illegal billings including excessive prescriptions, nonexistent rehabilitation tests, and treatments among other fake billings. Consequently, they defrauded Medicaid, Medicare, and TRICARE a sum of up to $ 1.3 billion.
Enforced Penalties
Following this mega-fraud, the concerned authorities undertook various steps to avoid the repeat of the same. The most visible form of the actions is filing lawsuits in the department of justice so that the legal procedure can be followed to determine the best cause of action. Consequently, the Helth and Human Services (HHS) initiated suspension actions against more than 290 health care providers including doctors, pharmacists, and nurses for their role in this major scam (Department of Justice, 2017). According to this ruling, it is clear that these medical professionals violated their oaths and led by greed put the life of their patients at risk. The justice team also promised to continue making more arrests as well as incarcerating all the involved parties.
From the above fraud case, it is clear that this is a real issue that is costing the taxpayers a lot of revenue in sustaining the insurance providers who are being defrauded. As a Chief Finance Officer, it is important to ensure that the hospital one is in charge of complies with set statutory to avoid getting into conflict with the government. More so, the staff must stick to their oaths to offer the patients the best medical attention without a desire to satisfy their selfish interests. To achieve this, there must be thorough background checks on employees to ensure that staff with unethical backgrounds and those that have been involved in fraud are not let into work in this hospital.
Importance of Healthcare Finance Compliance
The need for healthcare finance compliance is centered on the rates of all the complications, which enables the hospitals established by the federal officials not to lose 1 percent of total Medicare fee for the year. The policy was in effect from the start of last October. Whereas the government was not able to release the amount in dollars of the penalties, it is anticipated to be more than a million dollars for a majority of big hospitals. Wholesomely, complying with the health finance, the hospital is unlikely not to suffer a loss of $430 million, which is an increase of 18 percent from last year as identified by the Association of American Medical Colleges.
The reductions will apply to patients stays, lessen the quantity of money health facilities obtain to train medical inhabitants as well as care for people with low returns. According to Kaiser Health News , 40 percent of the hospitals fined this year escaped punishment in the early two years of the program. The 306 hospitals include but not limited to Mount Sinai Hospital in New York, the University of Michigan Health System in Ann Arbor, Cambridge Health Alliance in Massachusetts and University of Miami Hospital in Florida. As stated in the Federal Agency for Healthcare Research and Quality , country-wide, hospital-acquired illness decreased by 21 percent from 2010 to 2015 (Kaiser Health News, 2017). The most prominent decrease was for adverse reactions to drugs, blood clots due to post-surgery and catheter infections. But, hospital hazard is still a threat. AHRQ approximates there were up to 3.8 million health facility-based injuries in the past year. The number explains the 115 injuries during each 1,000 patient hospital stay throughout that duration.
The Potential Criminal and Monetary Fines
A resistant bacterium that Medicare incorporated into its formula for establishing financial penalties for hospitals is Staphylococcus aureus which is methicillin-resistant. The bacterium has the potential to cause bloodstream and pneumonia including skin infections (Ventola, 2015). MRSA is widespread outside the hospitals, and occasionally individuals suffering from it show no signs of disease. Though, these individuals can bring a germ into the hospital, where providers of healthcare can spread it and be more dangerous for sick and older patients who have the weak immune system and cannot fight the infection. Hospitals have attained some achievement in lessening MRSA infections to 13 percent from 2011 to 2014 as highlighted to CDC. According to AHRQ approximates presence of 6,300 incidences in hospital last year (Kaiser Health News, 2017).
The second bacteria that will be measured for penalties are Clostridium difficile. C. diff can multiply in the gut as well as colon when patients take certain antibiotics to kill some germs. The bacteria can as well spread through contaminated hands and surfaces. Whereas antibiotics can treat it, it can as well be so severe that certain patients are supposed to have some portion of their intestines surgically removed (Ventola, 2015). The bacterium can cause diarrhea and can lead to death for vulnerable patients and the elderly.
The rate of infection from colon surgery, central line tubes, urinary tract catheter and hysterectomies are factored by the Hospital-Acquired Condition Reduction Program. The infection has the most significant weight in determining penalties; however, the formula considers the frequency of hip fractures, bed sores, blood clots including other problems. Specialized hospitals, for instance, those that treat psychiatry, children, and veterans are exempted from penalties. Also exempted are hospitals with critical access label for being specialized in an area. For the remaining hospitals, it is required the Medicare penalize 25 percent that underperforms the measures as required by the Affordable Care Act regardless of the reduced rates of infection from previous years (Kaiser Health News, 2017).
In conclusion, due to the penalties as well as other efforts imposed by Medicare, hospitals should, therefore, think about more effective and appropriate use of antibiotics. However, there are still challenges towards the effort since hospitals lack suitable programs for antibiotic stewardship.
Part Two: Seven Fundamental Steps of a Compliance Plan
The suggested element by following guidelines is a process that can be used in hospitals. The elements can be included into management model of a multi-hospital and integrated system of delivery. The guidelines have been tailored to fit the requirements and financial needs of a hospital. The Office of the Inspector General is aware that with adherence to the compliance programs, a model is not effective for each hospital. Thus, each hospital irrespective of the structure or size can gain from the principles highlighted in the guidelines.
Every successful program starts with a formal commitment to the hospital's body of governance including the entire applicable elements as shall be listed. The elements are founded on seven steps outlined in the Federal Sentencing Guidelines. A full adoption of all the elements is all not likely to be feasible for all the hospitals. But, to begin with, a good faith as well as meaningful commitment on the hospital’s administration or the governing body including the Chief Executive Officer, CEO can significantly contribute the successful implementation of the program. At least, a comprehensive compliance model must incorporate the seven elements.
Element One: Implementing Written Policies, Procedures, and Standards of Conduct
Policy: The practice staff shall adhere to high values of ethical conduct. The personnel is expected to adhere to and assist the practice in adhering to all applicable laws as well as regulations including the third party financier program prerequisites. This is vital as it ensures that the risk of getting involved in fraudulent deals are minimized and reduces the chance of lawsuits.
Standards of Conduct
The procedure of practice personnel is expected to adhere to the following standards and policies.
Providing and receiving valued items to persuade referrals
: State and federal laws forbid paying, receiving or offering any valued item to persuade referrals for hospital business until some conditions are met. The practice staff shall not solicit, offer, accept or pay items of value in exchange for hospitals referrals without initially getting authorization from the Compliance Officer (Richardson, 2015). The provision applies to receiving or offering gifts, money, discounted or free items and services, professional considerations or other arrangements with the commitment to induce referrals. It also applies to any transactions pertaining sources of referrals, such as transactions with some healthcare providers, patients, and vendors. Violations of the laws are likely to expose the practice and its workforce to criminal as well as administrative penalties.
Financial Relations with Physicians including other sources of referrals
: State and federal laws influence contracts, and agreements alongside other financial relations with practitioners, physicians, vendors and other sources of referrals. A practicing staff is expected to enter a contract or financial arrangement with or receive or give a valued item from or to, an outside practitioner, member of the physician family, or other sources of referral without the earlier confirmation of the Compliance Officer (Pascu, 2016). Besides, in case the practice has a contract and/or financial relations with an outside practitioner or a family member of the practitioner, the practice staff is expected not to bill Medicare for a given item or services mentioned by that practitioner without the confirmation of the Compliant Officer (Richardson, 2015). Further, practice staff must strictly adhere to the terms of a given confirmed contract or any financial arrangement in the absence of outside physicians, their members of the family, or sources of referrals. Improper improvements of the contracts and agreements can infringe applicable laws (Walton, 2015).
Improper Billing Activities
: The practice staff is expected not to involve in fraudulent, false, questionable or improper billing activities. The improper practices include but not restricted to a billing for items and services that have not been rendered. Rendering or billing for items and services when non-practitioner rendered the services, or in case of a physician failing to offer the level of supervision needed by applicable laws as well as regulations. Submitting claims for payment with insufficient documentation to substantiate the claim (Bush et al., 2017). Other improprieties are, appending signature on the form for a practitioner without the authorization of the physician and inappropriately altering medical records, for example, prescription of medications alongside procedures without authorization. Also, the improprieties include the use of billing codes to provide a high rate of payment than the stipulated billing code such as upcoding. Last but not least, submitting bills in the disjointed mode to maximize reimbursement, however, third-party payers need the billing together procedure and submitting more than a claim for similar service.
Element Two : Designating a Compliance Officer and Compliance Committee to Provide Program Oversight
The policy requires that the Compliance Committee in charge of practice is expected to ensure that practice has a successful Compliance Program by appointing an eligible Compliance Officer as well as Compliance Committee members. The Compliance Officer should hold a degree in either Economics, Law or Business studies to be able to make critical decisions regarding the compliance of set regulations. On the other hand, the Compliance Committee members should also have related skills to enhance the working of these committees.This is important since the CFO shall be receiving frequent reports alongside taking suitable action to make sure that the practice adheres to Compliance Program.
The practice is anticipated to have a Compliance Officer. The Compliance Officer is expected to report directly to the Chief Financial Officer, and appropriately to the Compliance Committee. Due to the resistance of Compliance Committee, the Compliance Officer will be responsible for executing, monitoring and not limited to coordinating activities such as necessary and sufficient to facilitate a suitable Compliance Program (Baselski, 2016).
The duties of Compliance Officer will be to fulfill the purpose of the Compliance program.
The Compliance Officer shall adhere to the compliance program of the general standards of the policy of conduct.
He shall supervise, monitor and coordinate the execution and maintenance of a successful compliance program.
He is expected to serve act as the chairperson of the Compliance Committee.
He shall report directly to Chief Finance Officer and the Compliance Committee regarding financial compliance activities.
He is expected to report directly to the Compliance Committee on financial activities on a quarterly basis or more frequently as may be needed by the Compliance Committee or Chief Financial Officer.
The Compliance Officer will have the authority and the obligation to report directly to the Compliance Committee if he believes the Chief Financial Officer is not sufficiently addressing compliance program.
His reports are expected to summarize the outcome of compliance assessments, reviews as well as audits.
He shall continuously revise the compliance program necessary to meet the requirements of practice and to adhere to applicable laws, regulations and the third party payer program necessities.
He shall make sure that financial arrangements, activities of marketing and any other transactions that are likely to implicate abuse or fraud laws and regulations are revised for compliance.
Element Three: Using Due Diligence in the Delegation of Authority (Completed)
Element Four : Educating Employees and Developing Effective Lines of Communication
Educating employees shall entail an education and training program. The policy states that practice shall offer appropriate training to practice staff regarding compliance problems, such as relevant laws, the regulations, third-party payer program necessities and policies of practice. New governing Compliance Committee and employees: All the new practice staff, as part of the initial orientation, shall receive training applicable to the individual’s position and duties with regards to compliance program (Grant, 2016).
There shall be periodic training and updated training geared towards practice personnel and suitable for the individual’s position and duties. The training shall take place often as suitable, though at least once in every two years. There shall be extra training for some departments. Practice staff whose actions influence the accuracy and validity of claims reported to the state and federal government shall receive more training. The staff may include billing, coding, marketing, and cost reporting personnel. The training shall comprise overall bans on paying and receiving remuneration to persuade referrals. Also included are the private and government payer reimbursement principles, and improper billing activities.
Communications regarding compliance problems shall uphold an open line of communication between the compliance officer and the practice staff. Communication compliance is intended to make sure that effective enforcement of the compliance program minimizes any possibility for abuse, fraud, and waste. No individual shall be subject to disciplinary action or vengeance for good faith reporting. Practice staff can seek clarification from the compliance officer, and compliance committee members in case they have questions concerning relevant regulations, law, third-party payer program prerequisite, practice procedure or policy. Essential questions, as well as responses, shall be documented, dated and shared among other practicing staff to allow for updating of policies, standards, and procedure (Henry, 2016).
The practice staffs are required to report suspected violations of the Compliance Program, regulation, and law and third-party payer program necessity applicant to the compliance program. The reports must be available as soon as possible to make sure the practice complies with effective deadlines for responding to alleged concerns. The practice staffs may choose any of the reporting options.
Report to a member of the compliance committee or supervisor. Practice staffs can report issues regarding compliance problems directly to their supervisor or member of the compliance committee. If the complainant's reason is not being addressed, they can direct their genuine issues to the complaint officer.
Individuals receiving a complaint shall direct the report to the compliance officer. Such individuals shall not begin any investigation nor describe the issues with any individual other than the compliance officer.
On receiving compliance complaint, the compliance officer will investigate as well as respond as highlighted in the investigation and response policy regulations.
Where identified, practice staff shall attempt to keep the identity of the practicing staff whose report is confidential; the practice cannot assure that the information will be confidential in case the government body is involved.
The compliance officer will report essential and verified issues of suspected abuses to the compliance committee and the chief financial officer. In any event, the compliance officers get a fraud alert, the Office of the Inspector General or advisory body that can implicate the activities at practice shall immediately investigate.
Element Five : Conducting Internal Monitoring and Auditing
There shall be a compliance program on auditing and monitoring. The practice will execute self-examination program to monitor and assess the compliance program. Proof of continuous supervision shall be maintained by the compliance officer as well as regular reports shall be given to the compliance committee.
Design of a healthcare fraud, abuse, and compliance calendar template
Written Policies and Procedures and Standards of Conduct | ||||
| No. | Description | Yes/No | Documentation (include section, location, page no., brief explanation | Department Responsible |
| 1. | Do you have written procedures and policies and/or Standards of Conduct that: (A-E) | |||
| A. | Express the hospital’s commitment to adhere to all applicable State and Federal standards? | |||
| B. | Define compliance prospects as included in the standards of conduct? | |||
| C. | The device the process of the compliance program? | |||
| D. | Deliver guidance to practice staffs on dealing with potential compliance problems? | |||
| E. | Ascertain how to communicate compliance problems to effective compliance personnel? | |||
Element Six : Enforcing Standards through Well-Publicized Disciplinary Guidelines
Develop a generic outline that addresses the following:
A five (5) Q&A handout for the intent of distributing to employees with regards to healthcare finance, fraud, abuse and compliance
What is a compliant program?
A compliant program refers to a sequence of internal measures as well as controls to make sure that the design sponsor is adhering to federal and state laws alongside regulations that govern the program.
Name the compliance program prerequisite?
The compliance program requirements entail seven elements including documented standards of conduct, duties of a compliance officer, successful compliance training, and internal monitoring and auditing. Further, it includes mechanisms of disciplinary, appropriate communication lines and processes for responding to the offenses detected and corrective action.
What does the compliance program require?
Compliance program necessitates fraud, abuse, and waste.
Name three compliance considerations.
The compliance considerations include anti-kickback statute, civil financial penalties, and stark law.
Does CMS form part of the federal government that supervises the Medicare program?
[Yes].
Element Seven : Responding Promptly to Detected Offenses and Undertaking Corrective Action
The compliance program shall entail investigation and response. The financial compliance officer shall direct investigations regarding alleged compliance issues and report applicable findings (Bernstein, 2014). Under the basis of a complaint filed, it does not primarily find wrongdoing, though serves the opportunity to assess the compliance program to initiate any amendments. The compliance officer will initiate and follow up on a 4-step corrective action approach as follows:
Upon notice of receiving alleged compliance issue, the financial compliance officer will develop a record as highlighted in the compliance program.
The compliance finance officer will immediately investigate the problem.
In case the investigation shows unintentional errors by practice staff, the compliance finance officer will report the conclusions to compliance committee. The legal institution can be called upon to establish whether disclosure and repayment to a suitable government body should be made (Pascu, 2016).
In case the investigations show what appear to be deliberate violations of the relevant laws, the compliance finance officer shall promptly report the facts to compliance committee. Legal counsel can be called upon to determine whether the repayment to the applicable government is supposed to be made, and if possible, then it should be within 60 days from the discovery time of errors.
State and federal laws, in general, necessitate that practice staff report as well as repay overpayments expected from government healthcare programs within 60 days.
Conclusion
Through in this document, I have endeavored to outline a foundation to the procedure required to develop a successful as well as cost-effective hospital compliance program. Every program shall be tailored to suit the requirements and resources of the hospital, with regards to the corporate structure, staff composition, and mission. The statues, guidelines, and regulations of the state and federal health insurance programs, procedures and policies of health plans are integrated into the hospital’s compliance program. It is my view that the guidelines and compliance help in ensuring the hospital, and healthcare providers attain their commitment to ethical behavior. Lastly, it is my sincere hope that the compliance program shall enable the hospital to meet its goals, advance in patient care quality, significantly reduce the fraud, abuse and waste and the healthcare cost to state, federal and private health insurers.
References
Baselski, V. S. (2016). Chapter 1.2: Procedure coding, reimbursement, and billing compliance. In Leber A (Ed). Clinical Microbiology Procedures Handbook, Fourth Edition (pp. 1-2). ASM Press.
Bernstein, J. (2014). Defending waste, fraud, and abuse. Clinical Orthopaedics and Related Research , 472 (8), 2329-2333.
Bush, J., Sandridge, L., Treadway, C., & Vance, K. (2017). Medicare fraud, waste, and abuse . Retrieved on 21 October 2017, from http://mds.marshall.edu/cgi/viewcontent.cgi?article=1178&context=mgmt_faculty.
Department of Justice. (2017). National health care fraud takedown results in charges against over 412 individuals responsible for $1.3 billion in fraud losses. Retrieved on 28 October 2017 from https://www.justice.gov/opa/pr/national-health-care-fraud-takedown-results-charges-against-over-412-individuals-responsible
Grant, M. (2016). The Importance of Education for Physicians on Clinical Documentation: Developing a Physician Clinical Documentation Program (Doctoral dissertation, The College of St. Scholastica).
Healthcare Finance. (2017). Healthcare frauds and settlements in 2017: Running list . Retrieved on 28 October 2017 from http://www.healthcarefinancenews.com/slideshow/biggest-healthcare-frauds-2017-running-list.
Henry, L. (2016). Fraud prevention: an effective control environment can deter or minimize the occurrence of fraudulent activities. Internal Auditor , 73 (2), 17-19.
Pascu, A. (2016). Corporate compliance in health care: An overview of effective compliance programs at three not-for-profit hospitals (Doctoral dissertation, Utica College).
Richardson, R. W. (2015). Ethical issues in physical therapy. Current reviews in musculoskeletal medicine , 8 (2), 118-121.
Ruiz, R.R. (2017). U.S. Charges 412, Including Doctors, in $1.3 Billion Health Fraud. The New York Times
Ventola, L. C. (2015). The antibiotic resistance crisis: Part 2 management strategies and new agents. Journal of Physical Therapy, 40 (5): 344–352.
Walton, A. (2015). Counteracting fraud, waste, and abuse in drug test billing . Retrieved on 21 October 2017 from http://digitalcommons.lasalle.edu/cgi/viewcontent.cgi?article=1008&context=ecf_capstones.
