Welcome Back to Compliance University! Today we address the Question They Dare Not Ask: “Why should I bother?”

Do you already have in place a working, effective regulatory compliance program, with policies that address how you actually operate your company from the perspectives of billing, medical records, contracting activity, marketing and all of the other areas that implicate regulatory compliance? If you answer “no,” you probably have already asked the Question They Dare Not Ask — whether you realize it or not. At every industry trade show for the past six or so years, I have noticed many advisors talking about compliance programs. I have written dozens of articles about compliance, and there are hundreds, if not thousands, more compliance articles available out there. I even wrote a book about home care compliance.

Nonetheless, many home care providers — maybe you, too — have not created an operational, effective compliance program. Please understand, I certainly am not picking on my home care clients and colleagues. Medical groups, ancillary service providers, long term care organizations and even hospitals continue to operate with no compliance program in place, or with half-hearted attempts at compliance programs that fail the “effectiveness” test. Why? Well, I propose the reason lies in the Question They Dare Not Ask: “Why should I bother?”

Several lines of reasoning may lead home care providers to this question. Here are a few examples:

• “It costs too much to set up.” (Answer: It's a necessary expenditure, like insurance.)

• “It will identify problems that will cost me money to correct.” (Answer: Maybe so, but the benefits are well worth the cost.)

• “If I don't know what I am doing, I won't get into trouble. But if I know it's wrong, the compliance program will get me in trouble.” (Answer: Wrong, wrong, wrong!)

• “They won't go after small guys like me.” (Answer: They already do go after the “small guys,” every day.)

But let's respond to the Question: “Why should I bother?” The short answer is: “Because you are crazy not to bother.” An effective compliance program can improve reimbursement, prevent legal trouble and produce ongoing benefits for the profitable growth of your company.

In fact, during the next few months, I will offer my top 18 reasons for creating and implementing an effective compliance program. The first six reasons, presented here, focus on federal and state laws:

1. An effective Compliance program can reduce the likelihood that a home care supplier will violate reimbursement and fraud rules.

   An effective compliance program establishes, or memorializes, standards, policies and procedures for personnel to follow when carrying out billing, documentation, contract negotiation and operational activities that impact reimbursement rules, and federal and state anti-fraud laws. It also establishes clear procedures for reporting potential violations of law or of compliance procedures, for investigating and resolving concerns, and for disciplining people involved with the violations. Consequently, an effective compliance program should reduce significantly the likelihood of violations, inadvertent or otherwise.

2. An effective compliance program can result in a substantial reduction of penalties under federal law, if violations of the reimbursement rules or violations of anti-fraud laws occur while the company has the program in place.

   According to federal sentencing guidelines released in 1992, federal judges must take into account a company's corporate compliance program when handing down criminal sentences. Lawmakers since have created similar guidelines for civil violations. The government has stated — and has demonstrated — that an effective corporate compliance program can reduce an organization's fines significantly.

3. An effective compliance program can reduce the likelihood of “whistle blowing.”

   Fingerpointing by employees, former employees, contractors and others, can expose home care suppliers to the risks of qui tam litigation, costly investigations, and substantial fines and penalties.

   An effective compliance program can reduce substantially — and often eliminate — these dangers. (Look for a discussion about whistle blowing in future Compliance University columns.)

4. An effective compliance program can help a home care supplier obey its disclosure obligations to the government or third parties, while still protecting itself.

   There are many circumstances in which a home care supplier is obligated to disclose to the government violations of fraud and reimbursement rules. When these circumstances arise, the supplier must identify what information requires disclosure and must determine how to disclose such information, to minimize the supplier's exposure to sanctions or other dangers. Most home care suppliers inadvertently violate reimbursement or fraud rules occasionally.

   However, inappropriate or premature disclosure or nondisclosure of these violations can place any suppliers in serious, long-lasting difficulty.

   An important characteristic of an effective compliance program is the program's ability to help business owners investigate and disclose reimbursement or fraud violations. Such foresight allows legal counsel to get involved at the right time, preserves attorney-client privilege and ensures prompt and thorough investigation. An effective compliance program also puts the problem in the proper perspective and paves the way for a coordinated strategy for communicating issues to the government in the most beneficial manner. Indeed, if a compliance program merely enabled a home care supplier to respond quickly and effectively to disclosure problems, this benefit alone might prove of sufficient value to justify the program.

5. An effective compliance program demonstrates to the government that the home care supplier has its act together.

   An effective compliance program demonstrates a home care supplier's ability to create internal systems that permit ongoing self-assessment and self-policing. Consequently, the durable medical equipment regional carriers and government investigators are more likely to give the benefit of the doubt to a home care supplier with an effective compliance program. Such a program may make the government more likely to infer proper motives for issues that focus on intent and motive, such as those under the anti-kickback statutes. At the very least, the presence of an effective compliance program may make the difference between a long investigation and a relatively short government inquiry.

6. If trouble arises and you have not established a compliance program, the government will establish one for you.

An increasing number of government health care fraud settlements require the wrongdoer to establish a corporate integrity program, including a limited or comprehensive compliance program. Invariably, a compliance program crafted by or with the supervision of the government includes reporting and monitoring obligations that are more burdensome than otherwise would be necessary.

Additionally, a compliance program created by a home care supplier's own initiative will evolve at the company's pace, emphasizing strengths and weaknesses unique to the organization. On the other hand, government-mandated programs must be crafted quickly, without much field testing, and with the substantial burden of ongoing government scrutiny. And, a government-mandated compliance program usually is part of a settlement package that additionally includes fines and penalties of thousands of dollars or more.

Even when resolution of a problem does not involve a corporate integrity program, a supplier who has been subject to investigation will remain, for some time, on the “hit list” of the Centers for Medicare and Medicaid Services' durable medical equipment regional carriers, the United States Department of Health and Human Services' Office of Inspector General, and the Department of Justice. Recurring scrutiny of the supplier is likely, because of the government's implicit expectation that, where there's smoke, there's fire.

In the next class we will continue our analysis of 18 benefits of a compliance program.

The most intriguing lesson is this: Only one-third of these benefits are tied to federal and state laws! The next 12 benefits have nothing to do with fraud-and-abuse rules. Instead, these benefits focus on the ways in which compliance programs may improve internal communication and personnel relations, as well as help suppliers pursue growth opportunities within their select business.

Class dismissed!

Neil Caesar is president of the Health Law Center (Neil B. Caesar Law Associates, PA), a national health law practice in Greenville, S.C. (www.healthlawcenter.com). He is also a principal with Caesar Cohen Ltd. offering compliance training, outsourcing and consulting. A frequent author and speaker, Caesar is the author and editor-in-chief of the Home Care Compliance Answer Book.

He can be reached via email at ncaesar@healthlawcenter.com or by telephone at 864/676-9075.