Health Reform Bill and Medical Compliance in a Physician Practice

The Patient Protection and Affordable Care Act (Public Law 111-148), also referred to as the “Health Insurance Reform Bill”, is a federal statute that was signed into law by President Barack Obama on March 23, 2010. This legislation includes a new requirement for an effective compliance program for healthcare organizations. What was formerly voluntary is now mandatory, including the requirement that healthcare providers applying to enroll as Medicare providers have a compliance program in place.

The Office of Inspector General (OIG) of the federal Department of Health and Human Services (HHS) recommends the components of an effective compliance program include:

  • Conducting internal monitoring and auditing
  • Developing and implementing compliance program policies and procedures
  • Designating a compliance officer or contact person
  • Conducting appropriate training and educating of staff
  • Responding appropriately to detected offenses and developing corrective action
  • Developing open lines of communication, andPhysicians and other providers applying for Medicare participation will be required to have a Compliance Program in place. It is unknown if this requirement will extend to an existing Medicare participating medical group which is adding a physician or other practitioner who has not previously participated in Medicare – but it might!
  • The limitation on submitting claims to Medicare has been reduced to one calendar year from the date of service.
  • Overpayments from Medicare must be returned within 60 days of the date of determination that there was an overpayment. Penalties are 3 times the amount owed.
  • A provider’s enrollment can be revoked if he or she does not maintain a record of physician referrals for home health and DME services, and make the records available to CMS when requested.
  • There must be a face-to-face encounter between the provider and the patient when home health or DME is ordered. (HHS can also extend this requirement to other services)
  • There will be a new protocol for providers to self-disclose violations of the physician self-referral regulations.
  • States may use Recovery Audit Contractors (RAC’s) for audits of state Medicaid programs.
  • A Provider may be terminated from Medicare when terminated from a state Medicaid program.
  • PQRI Measures and HITECH Act Meaningful Use criteria will be integrated, to the extent possible, in the near future.
  • There will be no copayment required from Medicare beneficiaries for preventive services graded A or B by the US Preventive Services Task Force. Medicare will pay 100% of the Medicare Allowable for these services.
  • Medicare will reduce payments to physicians not participating in PQRI by 1.5% in 2015 and by 2.0% in 2016.

So what should a Medical Practitioner be doing?

  • Develop and implement effective Compliance Policies and Procedures that includes internal monitoring such as a risk-based coding and documentation audit.
  • If you are a Medicare participating provider, begin reporting PQRI measures.
  • Make sure your billing and accounts receivable practices include timely filing of claims and timely refunds to government payors when overpayments are identified.
  • Ensure your EHR system is capable of meeting the Meaningful Use Criteria.
  • Remember that the year 2010 is possibly the one year to “move most aggressively into the future”, because the future is arriving whether you are prepared or not!

As the Patient Protection and Affordable Care Act is implemented – step by step – regardless of the legal challenges, it is wise to consider the potential impact on your medical practice, including the need for an audit of your medical documentation, coding and billing processes, the program policies and procedures, and the chief compliance officer functions. All important steps to manage your clinic at best practices benchmark standards.