What is compliance? According to the World Book Dictionary, compliance is “The act of complying; act of doing as another wishes; act of yielding to a request or command.” The Jane's Billing & Consultation Services definition of compliance is “Do it right the first time and you will not have to pay later!”

Corporate compliance plans are not a fad such as hula-hoops or drive-in theatres. Although compliance plans are not yet mandatory, operating a home medical equipment business or pharmacy without one is ill-advised. And you must have a compliance plan specific to your company, not an off-the-shelf plan.

Your company must follow everything written in the plan — if you are not going to follow a certain procedure, do not have it written in the plan. This plan will be adopted into your company and followed daily. Consider it a daily diary. When you learn something you did not know before, note it in your compliance plan and write a policy detailing how you are going to correct the mistake and how to prevent the same mistake from happening again.

To follow are seven key elements to include in a successful corporate compliance plan.

WRITTEN POLICIES AND PROCEDURES

Design and distribute written standards of conduct, including policies and procedures that identify specific areas of potential fraud. This demonstrates your organization's commitment to compliance. And make sure that these policies and procedures are readily accessible to all employees and that all employees are regularly educated on the written policies. Also, ensure that any updates and changes to the policies and procedures are distributed to all employees so they may implement the changes accordingly.

DESIGNATE A COMPLIANCE OFFICER

Specific high-level employees should be assigned the overall responsibility of overseeing compliance with the standards and procedures outlined in your plan.

The corporate compliance officer and/or corporate compliance committee should be in direct communication with the chief executive and the governing body of your company. The compliance committee should meet with the compliance officer regularly, and all meetings should be recorded in the compliance plan. The committee should change every year, giving all qualified employees the opportunity to serve on the committee.

CONDUCT EFFECTIVE TRAINING

This is one of the most important elements of every HME provider's compliance plan. You must take reasonable steps to effectively communicate your compliance standards and procedures to all employees and agents, either by requiring participation in training programs or by disseminating publications that explain what is required of the employees. It is vital to document all seminars and educational classes your employees and owners attend and what was learned. Each time a Medicare Advisory is published or an update made to the Medicare Manual, employees should receive a copy and learn the documentation changes.

All employees should learn about each piece of equipment or supply and should be tested for their knowledge of these items regularly. If you do not know what your employees know, how can you pass a compliance audit? Ignorance is not an acceptable excuse for auditors. Sure, we all make mistakes, but we must learn from and make the necessary changes to rectify those mistakes.

DEVELOP LINES OF COMMUNICATION

Establish a hotline or other forms of communication to receive complaints from and establish open access to the compliance officer. Complaints regarding compliance cannot be ignored. Complaint must be thoroughly researched and both parties should be satisfied that the results meet compliance guidelines. If not, then both parties may wish to seek legal advice. You must document all actions taken in accordance with the compliance plan.

RESPONSE AND ENFORCEMENT

Develop a system to respond to allegations of improper or illegal activities, and develop a plan for enforcement of disciplinary actions against violators including, as appropriate, discipline of individuals responsible for failure to detect an offense. This plan must be followed as written on a non-discriminatory basis.

AUDITING AND MONITORING

Take reasonable steps to achieve compliance with the standards of your compliance plan by using monitoring and auditing systems designed to detect criminal conduct by your employees and agents. Have in place a reporting system that allows employees to feel confident that they can report criminal conduct by others within the organization without fear of retribution. I suggest using an outside consultant or healthcare attorney who is educated in corporate compliance plans to conduct your yearly audits and to help you write the audit procedures for your compliance plan.

RESPONSE AND CORRECTIVE ACTION

After an offense is detected, take reasonable steps to respond to the offense and prevent similar offenses from occurring in the future. It may be necessary to modify the compliance plan in order to detect and prevent future violations of the law.

Although these seven elements are required for a successful compliance plan, these alone will not serve as a complete plan. Compliance plans should meet my “Come To Jesus” meeting status: Ask for forgiveness of your past sins, try not to sin in the present, meet each day with your compliance plan as your morning devotional and sin no more! The management that is responsible for the daily operations of the corporation must be held accountable for and be an active part of the implementation of the compliance plan or it will not be carried out properly.

The following areas of exposure for HME companies should be discussed in detail in your plan:

• Upcoding
• Improper completion of the CMN
• Billing for items or services not actually provided
• Routine waiver of deductible and co-payments
• Claims for duplicate payments for the same item or service
• Billing Medicare/Medicaid more than non-Medicare/Medicaid patients for items or services
• Claims for medically unnecessary services
• Providing items that do not meet federal program guidelines

In addition, the following examples should be closely examined pertaining to the kickback statutes that can result in violations to the False Claims Act:

• Cash and non-cash payment for referrals
• Contracts for medical directors which provide for little or no work by the physician
• Free or deeply discounted items or services to potential referral sources
• Discounting equipment or real property below fair market value
• Paying for continuing education and travel expenses of potential referral sources

Considering the degree of complexity of most billing, accounting and purchasing systems of large and even medium-sized DMEs and pharmacies, the potential for criminal liability creates a significant risk for the most conscientious of companies.

The implementation of a corporate compliance program can minimize the risk of a conviction and the amount of a penalty imposed in the unfortunate event of a civil or criminal enforcement action.

If a DME company has implemented an effective corporate compliance program, the Federal Sentencing Guidelines provide for a mandatory reduction of the culpability score, which can result in an ultimate penalty reduction of 50 percent or more.

Without an effective compliance program, a company risks court-imposed corporate integrity agreements, Medicare/Medicaid exclusion, management liability (including fines and imprisonment) even if management had no actual knowledge of a violation, and qui tam lawsuits by company employees and others (“whistle blowers”), who receive a percentage of the recovery.

With this in mind, do you still have a question regarding whether or not you need a compliance plan in your company?

Jane Bunch is chief executive officer of Marietta, Ga.-based Jane's Billing & Consultation Services. A reimbursement specialist, Bunch delivers educational seminars worldwide, helps develop corporate compliance plans, and serves as a consultant on fraud and abuse cases. She can be reached at 678/445-1221 or via email at BILLHME@aol.com.