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Fundamental “Rules of Life” That Also Apply to Medicare Compliance Concepts.

Fundamental Medicare Compliance Concepts Must Be Followed.

(July 15, 2011):  Medicare compliance is essential if you are a participating provider. There are “rules of life” we have learned that can really bring certain essential Medicare compliance concepts into focus. While sometimes considered little more than a cliché, these helpful sayings and principles can be quite helpful when explaining fundamental compliance concepts to new staff or non-compliance personnel.  Five fundamental Medicare compliance concepts that everyone can understand include:


I.  If it Isn’t Yours, Give it Back. 

Sound familiar? This is one of the first principles we are taught as children.  Nevertheless, it is as true today as it was then.  Medicare providers have a statutory obligation to promptly return any and all overpayments identified. In fact, with the passage of the Affordable Care Act (ACA) in 2010, it is now a requirement that providers return Medicare overpayments to the government within 60 days of identification or face significant liability under the False Claims Act.  If you follow this rule, it will go a long way towards meeting your Medicare compliance obligations.

While the prompt, mandatory return of a known overpayment is clearly required, we were recently asked about a provider’s obligations when it comes to less clear, potential overpayments.  For example, suppose that a provider identifies a specific claim that was improperly submitted and paid by Medicare.  When reviewing how the overpayment occurred, the provider also learns that a former employee mistakenly believed that a certain service was covered by Medicare.  While the provider may only have evidence that a single claim was improperly submitted and paid by Medicare, the provider may suspect that the former employee may have incorrectly handled similar claims.  The issue therefore becomes whether a provider has an obligation to further investigate and determine whether other, unconfirmed overpayments may exist.  In considering this issue, we believe that the general principle still applies, regardless of the fact that the mandatory return provisions set out under the ACA may not cover this situation.  Remain unconvinced?  In addition to being the ethical and right action to take, it is important to keep in mind that even if the 60-day repayment provisions of the ACA may not technically apply, a provider who turns a blind eye to possible overpayments is exposing the practice to a potential whistleblower suit under the False Claims Act by a current or former employee. Do you know of a potential overpayment?  More than likely, someone else in your practice is also aware of the problem. The bottom line is simple — “If it isn’t yours, give it back 

II.  Participation in the Medicare Program is a Privilege, Not a Right.

 Remember taking driver’s education in high school?  After 30 years I still remember my driver’s education teacher repeatedly reminding us that we did not have a right to have a driver’s license.  Rather, it was a privilege to be permitted to drive – a privilege that could be taken away by the State as quickly as it was granted if we failed to follow the laws of the State and the rules of the road.  Frankly, Medicare is no different.  Health care providers do not have a right to participate in the Medicare program.  It is a privilege that must be earned.  Should a provider fail to adhere to Medicare’s coverage, coding and billing requirements, this privilege can be taken away.  With this in mind, providers must actively work to better ensure that they fully comply with Medicare’s coding and billing requirements. Should they not fully understand one of more of the program’s guidelines, it is the provider’s responsibility to learn Medicare’s rules and ensure that the provider’s business practices fully comply with the program’s provisions.

III.  If it Sounds Too Good to be True, It Probably Is. 

Despite what some consultants may suggests, there aren’t many short cuts when it comes to Medicare compliance.  Physicians, small group practices and clinics should exercise caution when dealing with ‘consultants’ or ‘experts’ who boast of guaranteed increases in revenues or profits.  Unfortunately, many providers are having to deal with ongoing, steady declines in both Federal and private payor reimbursement rates.  In the current weak economy, unemployment rates have remained high and many patients are having a difficult time meeting their financial obligations (including monies owed to their health care provider).  In this environment, the promises and assertions of unscrupulous  individuals and companies who claim to know of “innovative” business models or ways to modify a provider’s coding / billing practices which will significantly increase a practice’s revenues can be tempting to a provider experiencing financial difficulties.  Have you been approached by someone with a “deal” which sounds too good to be true?  Be sure and check out HHS-OIG’s “Fraud Alert” titled “Special Advisory Bulletin: Practices of Business Consultants.”  While published a decade ago, the lessons and concerns discussed in the bulletin are as current today as they were a decade ago.  Check it out – and remember — the age old cliché “If it sounds too good to be true, it probably is,” is especially true when it comes to health care business opportunities.

IV.  Everyone Does it, So it Must be Okay.

In years past, a number of drug companies and medical device companies played fast and loose with Medicare’s rules, showering physicians with lavish gifts, inviting them to attend paid vacations and entering into sham “advisory” or “consulting” agreements which paid the physicians regular stipends for little, if any, work.  Why did these companies engage in these practices?  In many instances, the companies wanted to influence the physicians’ decision-making when it came time to prescribe certain drug or order medical devices to be used in the care and treatment of their patients. These actions amounted to kickbacks – plain and simple.  Today, drug and medical device industry representatives have made great strides in educating their members and in eliminating these illegal practices.  At the height of these practices, many physicians appeared to take the position that since their peers accepted kickbacks, it must be okay.  Clearly, this mindset is just flat wrong.  Unfortunately, it isn’t limited to drug and medical device companies. Generally, physicians should exercise care before accepting any thing of value from a company or clinical practice with whom the physician works – especially when the physician either makes referrals to the company or recommends / prescribes items or devices sold by that company to their patients.  In considering this issue, it is often helpful to ask, “Where do I send my referrals?” and / or “Where do I send my patients for Medicare-covered medical items or supplies?” Additionally, ask yourself, “From whom do I receive business or referrals?” Once answered, these business relationships should be carefully reviewed to ensure that there are no transactions that could give even the appearance of being improper. A typical example which repeatedly arises involves the use of “Medical Director” agreements where a physician is paid a monthly stipend which exceeds the fair market value of any services which are provided under the agreement.

V.  Neatness and Accuracy Count.   

Our Firm represents a wide variety of health care providers when responding to post-payment claims audits conducted by ZPICs and other Medicare contractors. Over the last two years, we have noted a significant increase in the number of claims being denied because medical documentation is either illegible or incomplete. From a compliance standpoint, these problems are among the easiest for a provider to remedy on a going-forward basis.

 Handwritten portions of a medical record must be legible by an average reviewer, not merely by the passage’s author —   When assessing claims denial reasons cited by ZPICs, our attorneys, paralegals and other personnel are often required to go through medical records as we assemble responsive arguments in support of payment.  More often than not, we don’t have any problem deciphering the records cited by the ZPIC as being “illegible.”  Having said that, ZPICs and other contractors have an enormous audit caseload, making it difficult to spend an inordinate amount of time trying to make sense out of poorly written passages.  As a result, if their reviewers cannot readily read a passage, they merely deny the claim and move on.

The lesson to be learned is clear – physicians, nurses, therapists, counselors and others must ensure that any handwritten comments, signatures, dates or other information entered into a medical record can easily be read by an outside third party who is not experienced in reading the handwriting of your staff.  It is important ot keep in mind that if there is an audit or review of this information by a ZPIC or another government contractor, it is likely to be several years in the future. During that period, the writer may no longer be with the practice and it may be difficult (if not impossible) to easily locate the writer for assistance in deciphering handwritten passages.  From a compliance standpoint, regular self-audits can prove quite helpful in identifying possible problems.

If you are conducting a self-audit and find that words or passages are illegible or incorrect, you should consider taking the following remedial steps:

Advise your staff of the problem and follow-up to ensure that future entries are legible and accurate Physicians, nurses and staff should be educated regarding the importance of ensuring that their handwriting is easily legible and the information they are providing is accurate. In most instances, once this is identified as an issue, most staff are willing to work with you so that future problems do not arise.  We recommend that regular follow-ups are conducted to ensure that problematic handwriting does not again deteriorate to where it is again illegible.

Correcting illegible or erroneous words, phrases or passages Should you find that certain portions of a patient’s record documenting prior services rendered are illegible, you cannot merely erase it or use white out to hide the original handwritten section  before re-writing the passage so that it is legible. We recommend that you contact your Compliance Officer or legal counsel before making any changes to a medical record (regardless of whether the record is handwritten or electronic).  Legal counsel can guide you on the correct way to make changes or corrections to a medical record which documents services previously rendered. If a change or correction to a word or passage is necessary, you should not erase, white-out, scratch out or use a marker to conceal the original remark.  Instead, we usually recommend that a single line through the incorrect or illegible phrase or passage is made. If you are audited, an outside reviewer will be able to readily see the original passage. Next, the corrected entry should be carefully written next to or above the original entry. It should then be signed and dated by the individual making the correction.  In this fashion, an outside reviewer will not be misled in any way about what was originally written, when the corrected entry was made and / or the identity of the person making the change to the record.

As set out in Chapter 3, Section 3.3.2 of the Medicare Benefit Policy Manual, the Centers for Medicare and Medicaid Services (CMS), when conducting a “Medical Review,” CMS advises ZPICs to consider the following:

3.3.2 – Medical Review Guidance

For example, ZPIC staff looks for some of the following situations when reviewing documentation:

 Possible falsification or other evidence of alterations including, but not limited to: obliterated sections; missing pages, inserted pages, white out; and excessive late entries;

 • Evidence that the service billed for was actually provided; or,

 • Patterns and trends that may indicate potential fraud.” (emphasis added).

 As a participating provider in the Medicare program, it is essential that you ensure that the care and treatment you provide is factual, accurate and recorded in a legible fashion.

To that end, one Medicare Administrative Contractor (TrailBlazer Health Enterprises) has suggested that when reviewing medical documentation, providers should check to ensure that:

  • Records are legible; reasonable clinicians will easily recognize that all abbreviations and symptoms
  • The patient’s name and the date of service appears on every page of the record (including the back side of double-sided forms).
  • The medical record clearly indicates the identity and professional credentials of all people who contributed to the service and / or the record, and who contributed which portion(s) of the service and or record.
  • Information in the record clearly supports all diagnoses reported on the claim.
  • Information in the record clearly demonstrates that all of the work described by the code(s) and / or modifier(s) reported on the claim was performed.
  • All procedures reported are clearly documented.
  • Education and Management (E/M) services reported on the same day as a procedure are clearly documented, medically necessary, significant and separate from the procedure.
  • The record of services performed “incident to” a physician service demonstrates the link between the employee’s work and physician’s service.
  • The record of services split / shared by a physician and non-physician practitioner demonstrates the face-to-face encounter and contribution to patient management by each practitioner involved.

Ultimately, providers who diligently work to achieve these points will have made significant strides towards a compliant culture in your  practice or clinic.

Robert W. Liles, J.D., serves as Managing Partner at Liles Parker.  Robert and other firm attorneys have extensive experience assisting providers in conducting a gap analysis of your practice or clinic, identifying general and specific risks to be addressed, and in developing and implementing an effective Compliance Plan.  Should you have questions regarding compliance or any other health law issues, please give us a call for an initial complimentary consultation.  We can be reached at:  1 (800) 475-1906. 

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