Fraud prevention and regulatory compliance go hand in hand.
Billions of dollars are lost to health care fraud every year.
And the sad truth…
For most providers, it doesn’t affect them until it does. The regulations are confusing. Penalties are steep. Enforcement is increasing at an alarming rate.
Fortunately, when you understand how health care fraud prevention and regulatory compliance complement each other. You can protect your practice from serious repercussions. Follow these tips to run your business with less stress and minimize risk.
In this article you’ll learn:
- Why Now is the Time to Care About Healthcare Fraud Prevention
- How Healthcare Fraud Prevention and Regulatory Compliance Align
- Common Regulations All Providers Should Know
- How to Implement a Robust Compliance Program
- Red Flags That Should Send Up Alarm Bells
Why Now is the Time to Care About Healthcare Fraud Prevention
Billions of dollars may sound like a lot. But consider this…
The United States Sentencing Commission estimates health care fraud offenses are up 19.7% from 2020. Fraud isn’t going away anytime soon. And it’s only getting worse.
There’s more…
The National Health Care Anti-Fraud Association (NHCAA) puts the annual health care fraud loss at $300 billion. That’s BILLION with a “B.”
Health care fraud hurts everyone including:
- Individuals pay more for health insurance
- Health benefits and coverage decrease
- Employer costs and taxes go up
- Patients can be injured by unnecessary treatments
That’s why many providers work with healthcare regulation attorneys to ensure compliance. Attorneys that focus on healthcare regulatory compliance know the regulations and keep practices on the right side of the line.
How Healthcare Fraud Prevention and Regulatory Compliance Align
Here’s the thing…
Providers think of health care fraud prevention and regulatory compliance as two different tasks to accomplish. But they’re linked.
Here’s how:
If your practice complies with billing guidelines, there’s no opportunity for fraud to occur. If your employees understand what is permitted under the regulations. There will be fewer honest mistakes. Maintain proper documentation and there’s nothing to hide.
The Department of Justice has increased its recovery of civil fraud judgments to approximately $2.9 billion through the first quarter of fiscal year 2024. Many of these lawsuits were caused by companies that didn’t have sufficient compliance programs.
Common Regulations All Providers Should Know
The government doesn’t make compliance easy for providers.
Each regulation covers a specific area of health care operations. Missing one doesn’t mean you’re compliant with others. Below are five regulations that providers should understand.
Make sure your compliance program covers at least:
- False Claims Act – It is illegal to knowingly submit false claims or records to the government. For each violation the government can seek treble damages and penalties of $5,500 to $11,000.
- Anti-Kickback Statute – Illegal to knowingly and willfully offer, pay, solicit, or receive any remuneration to induce referrals. “Remuneration” includes anything of value. Even sham lease agreements can be found to violate this statute
- Stark Law – Physicians cannot refer patients to receive “designated health services” from entities with which they have a financial relationship. There are many exceptions to this rule. But they are narrowly applied.
- Health Insurance Portability and Accountability Act (HIPAA) – Regulates how providers use and protect personal health information. Failure to comply can result in penalties up to $1.5 million.
There are others. But you should understand the basics of each law. Learn what you can and cannot do.
How to Implement a Robust Compliance Program
You should have a compliance program whether you know it or not.
The Office of Inspector General has published guidelines that outline seven fundamental elements of an effective compliance program. If you don’t have a written program that includes these elements. You aren’t doing enough to prevent fraud.
Every compliance program should include:
Written policies and procedures. Develop a set of policies and procedures that all employees can understand and follow. This will vary by practice but should at minimum cover billing, documentation, and ethical standards. Update the program as necessary.
A compliance officer. Designate an individual as your compliance officer and grant them access to leadership. Your compliance program will only be as strong as your compliance officer allows. Someone that is “checking the box” by giving it part-time attention is a large liability.
Training and education. All employees should receive training on your compliance program. Again, this will vary by practice but all employees from front desk to CEO should understand their role. Train new employees when they start and provide annual education to existing staff.
Reporting structure. Employees should have a way to report activities they think don’t fit within your compliance program. Whether that be an anonymous hotline or a suggestion box. Employees should feel comfortable reporting mistakes.
Monitoring and auditing. Wait until a whistleblower points out an issue? Nope. Your compliance program should include routine checks for compliance.
Enforcement. If you don’t enforce your policies how can you expect others to follow them? Prevention comes when your employees know that non-compliance will result in consequences.
Response. In addition to enforcing your policies. Your program should demonstrate how your practice will respond when non-compliance is identified.
Red Flags That Should Send Up Alarm Bells
Here are a few red flags that shouldn’t be ignored.
Don’t wait for the government to come knocking before you take action.
Billing red flags include:
- unbundling services
- upcoding
- phantom billing
- double billing
Operational red flags include:
- sudden increase in certain procedures
- Referral patterns that don’t match patient demographics
- Referrals that seem “too generous.”
Culture red flags include:
- Reluctance to ask questions about billing
- Pressure to meet unrealistic quotas
- Lack of oversight on coding practices.
- Pushback on compliance training.
If you identify any of these red flags throughout your operation. Take immediate action to review processes and procedures.
The Real Cost of Non-compliance
You will hear about different settlements and what providers are paying.
The possible ramifications of non-compliance are devastating.
Accounts can be excluded from participating in Medicare and Medicaid. Essentially cutting off the life-source of most practices. Individuals can face criminal charges and go to prison. Businesses can be tarnished overnight.
Here’s the good news…
If you have an effective compliance program in place, you can identify issues before they become big problems. Not only will you have the opportunity to prevent small issues from developing into full-blown audits. But you can build a relationship with your patients and partners based on trust.
Investing in your compliance program allows you to sleep well at night.
Wrapping Up
Now more than ever healthcare fraud prevention and regulatory compliance go hand in hand.
Remember: The environment we practice in is only going to get more hostile. Penalties are rising. The government is auditing more providers. Those that wait for the government to tell them there’s a problem will be extinct.
Developing a culture of compliance doesn’t happen overnight. It takes a commitment from leadership. Enough budget to create the program. And continuous focus.
Start by evaluating where you are today. Identify your weaknesses and implement corrective measures. Educate your staff on compliance and monitor their activities. Regulations will change over time and your compliance program should too.
Companies that take healthcare fraud prevention and compliance seriously are the ones that will prosper.
Others are just hoping they don’t get caught.