When I say "compliance program," what thought pops into your head? Paperwork? Waste of time? Turkish prison?
The Patient Protection and Affordable Care Act, better known as Obamacare, mandates that physicians participating in Medicare or Medicaid have operating compliance programs. Note that these programs must operate at the practice level -- compliance cannot simply be outsourced to a billing company.
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| Healthcare business and legal affairs expert Mark F. Weiss. |
On September 23, 2010, the Centers for Medicare and Medicaid Services (CMS) took the first step in attempting to define what those mandatory compliance programs must look like by issuing proposed regulations.
Consistent with the probable first thought that popped into your head, the great majority of radiology groups will view mandatory compliance programs as a necessary evil -- a cost. Not that they don't understand the need to be complaint itself.
Due to the fact that groups will have no choice if they wish to remain Medicare and Medicaid providers, they'll begrudgingly adopt a compliance program. But let's be honest, only some will actually implement the program on an ongoing basis.
Importantly, and this is the central point of this article, a much smaller minority of group leaders will understand that a compliance program can be used as a further lens though which to focus group strategy in order to wring additional profits from, and opportunity for, their group. That should be your goal.
Obamacare and the proposed regulation
The new healthcare reform law requires that physicians, as a condition to enrollment as Medicare and Medicaid providers, establish compliance programs that meet specific core requirements to be adopted by the Secretary of the Department of Health and Human Services.
The proposed regulations announced in late September are the Secretary's initial step in adopting those core elements. The proposed regulations solicit comments from the public on the draft core elements. Specifically, the Secretary proposes to adopt the Federal Sentencing Guidelines' "elements of an effective compliance and ethics program" as the basis for the core elements of the new, mandated Medicare/Medicaid compliance program.
The proposed regulations state those core elements (in language that varies from the actual language of the Sentencing Guidelines) as:
The development and distribution of written policies, procedures, and standards of conduct to prevent and detect inappropriate behavior.
The designation of a chief compliance officer and other appropriate bodies (for example, a corporate compliance committee) charged with the responsibility of operating and monitoring the compliance program and who report directly to high-level personnel and the governing body.
The use of reasonable efforts not to include any individual in the substantial authority personnel whom the organization knew, or should have known, has engaged in illegal activities or other conduct inconsistent with an effective compliance and ethics program.
The development and implementation of regular, effective education and training programs for the governing body; all employees, including high-level personnel; and, as appropriate, the organization's agents.
The maintenance of a process, such as a hotline, to receive complaints and the adoption of procedures to protect the anonymity of complainants and to protect whistleblowers from retaliation.
The development of a system to respond to allegations of improper conduct and the enforcement of appropriate disciplinary action against employees who have violated internal compliance policies, applicable statutes, regulations, or federal healthcare program requirements.
The use of audits and/or other evaluation techniques to monitor compliance and assist in the reduction of identified problem areas.
The investigation and remediation of identified systemic problems including making any necessary modifications to the organization's compliance and ethics program.
Prior guidance on physician compliance programs
Although Obamacare imposes mandatory programs, the federal government has previously issued a number of pronouncements related to providers' healthcare compliance efforts.
Obviously, the Federal Sentencing Guidelines have, for years, used the existence of an operating, effective compliance program as a factor supporting reduced punishment.
And, importantly, on October 5, 2000, the Office of Inspector General of the Health and Human Services Department officially announced its Compliance Program Guidance for Individual and Small Group Physician Practices. The 2000 physician guidance is one of several directed at various segments of the healthcare industry. It continues to provide a relevant roadmap to compliance efforts.
The obvious choice your competitors will not make
Under nearly any scenario other than a total repeal of Obamacare and no replacement legislation, it's a near certainty that mandatory compliance program requirements are here to stay.
Your competitors will almost certainly regard compliance programs as aggravation forced upon them and as costs they must endure. That viewpoint is entirely consistent with the fact that most radiology groups -- in fact, most professional practices -- are purely tactical, that is, purely reactive, to business events. The hospital indicates it has a problem with their quality -- what to do now? The administrator says that she's thinking of issuing a request for proposal rather than directly entering into renewal negotiations with your group -- what to do now?
But the most successful groups are strategic: They have an overall business strategy, carry through with consistent substrategies, and deploy coordinated implementing tactics. In essence, strategy is the filter through which all of their actions and activities are focused.
Yes, one purpose of a mandatory compliance program under Obamacare will be to assure qualifications for participation in government healthcare programs. Another will be to reduce the chances of errors that lead to audit or to prosecution. And, the existence of an operating compliance program in conformity with the Federal Sentencing Guidelines will help to reduce the consequences of criminal conviction. Each of these purposes is a "pure" compliance program goal and you, too, will incorporate them in designing and implementing your compliance program.
But when viewed strategically, your compliance program is a tool for you to do more than simply ensure "compliance" for compliance's sake.
It is a pivot point around which you can improve your group's financial performance. For example, the framework of your program can be used proactively to examine and optimize the billing and coding process; to minimize billing mistakes; to drive the faster completion of billing materials and increase speed of the billing cycle; to examine the efficiency of the practice's outsourced, or in-house, billing and collection operation; and to examine options for postbilling service collections.
It is also a pivot point around which to design additional business relationships. In this light, compliance prohibitions are highly useful "negative guides" for what can be done.
Conclusion
One of the core principles of business most often ignored in practice, and almost always ignored by practices, is the advantage of leverage, a business multiplier.
You are going to be forced to have a compliance program. You are going to be forced to expend the funds and devote the time and effort necessary to establish and operate it.
Obtain leverage and utilize that same program and those same funds, time, and effort in a strategic, proactive, profit-making way, rather than simply treat them begrudgingly as efforts and expenses to be tolerated.
By Mark F. Weiss
AuntMinnie.com contributing writer
November 15, 2010
Mark F. Weiss is an attorney who specializes in the business and legal issues affecting radiology and other physician groups. He holds an appointment as clinical assistant professor of anesthesiology at University of Southern California's Keck School of Medicine and practices nationally with the Advisory Law Group, a firm with offices in Los Angeles and Santa Barbara, CA. Mr. Weiss provides complimentary educational materials to our readers. Visit www.advisorylawgroup.com for his free newsletter. He can be reached by e-mail at [email protected].
Related Reading
The Profit Center: Part 16 -- Countering pressure in hospital negotiation, October 8, 2010
The Profit Center: Part 15 -- Success requires managing risk, August 13, 2010
The Profit Center: Part 14 -- Accountable care organizations: Accountable to whom? June 10, 2010
The Profit Center: Part 13 -- Radiology as factory work? April 13, 2010
Copyright © 2010 Mark F. Weiss
