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Abstract: On February 11, 7998, the Department of Health and Human Services Office of Inspector General (OIG) released guidelines to assist hospitals and their agents and subproviders to comply with Medicare and Medicaid regulations. While adopting and implementing a compliance program is voluntary, the OIG believes that such a program prevents fraud, abuse, and waste while simultaneously furthering providers' fundamental mission-to provide quality care.

[Nurs Manage 1998:29(6):12-15]

Before developing a compliance program, it is necessary to understand its core elements. According to the Department of Health and Human Services Office of Inspector General (OIG), the program's fundamental purpose is to establish a culture with the facility that prevents, detects, and resolves conduct that does not conform to federal and state law, private payer health care requirements, and the facility's ethical and business policies. In effect, everyone is an integral part. Internal control is critical: the claims and billing operations are often the source of fraud and abuse.

Program benefits

In its guidance release, the OIG cites many benefits of a compliance program. Its benefits include:

* Ensures that accurate claims will be submitted to government and private payers

Enables the hospital/facility to fulfill its caregiving mission

* Assists hospital/facility in identifying any weaknesses in internal systems and management

* Demonstrates a strong commitment to honest, responsible provider and corporate conduct

* Provides a more accurate view of employee and contractor behavior relating to fraud and abuse

* Identifies and prevents criminal and unethical conduct

* Improves quality of care

* Creates a centralized source for information distribution on health care statutes, regulations, and other program directives related to fraud, abuse, and other issues

* Develops a mechanism for employees to report potential problems

* Develops a procedure that allows for prompt, thorough investigation of alleged misconduct by corporate officers, managers, employees, independent contractors, physicians, other health care professionals, and consultants

* Initiates immediate and appropriate corrective action

* Minimizes the loss to the government from false claims, and thereby reduces the hospital's/facility's exposure to civil damages and penalties, criminal sanctions and administrative remedies.

There is no single "best" compliance program. Nevertheless, there are seven core elements that can be used:

1. written policies and procedures

2. designation of a compliance officer and a compliance committee

3. effective training and education effective lines of communication

5. auditing and monitoring

6. well-publicized disciplinary guidelines

7. detected offenses and corrective action initiatives.

...policies and procedures

Written policies define the standards of conduct; risk areas; claims processing and submission; reasonable and medically necessary service parameters; antikickback and self-referral concerns; bad debts; credit balances; retention of records; and compliance in performance evaluations.

The standards of conduct should indicate that the facility's governing body, management, employees, and others who provide services on-site comply with all federal and state standards to prevent fraud and abuse. Standards could be articulated in the organization's mission, goals, and ethical requirements. The standards of conduct must be communicated to everyone (e.g., in the handbook) and updated in accord with statute changes. Disciplinary action could range from oral or written warnings, suspension, termination of admitting privileges for physicians, and financial penalties.

Risk areas should zero in on OIG concerns, i.e., billing for items or services not actually rendered; providing medically unnecessary services; upcoding; "DRG creep"; outpatient services rendered in conjunction with inpatient stays; duplicate billing; false cost reports; unbundling of services; billing for discharge in lieu of transfer; failure to refund credit balances; and knowing failure to provide covered services or necessary care to members of a health maintenance organization (HMO). "DRG creep" entails billing using a Diagnosis-Related Group (DRG) code that provides a higher payment rate than the DRG code that accurately reflects the service provided to the patient. A similar "RUGS III creep" can occur when the patient classification is done based on higher categories.

When processing and submitting claims, policies and procedures should: 1. Provide for proper and timely documentation of all physician and other health care professional services that substantiate billed services.

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