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Developing a Medical Practice Compliance Plan

Developing a Medical Practice Compliance Plan

When the U.S. Supreme Court upheld the Affordable Care Act (ACA) last June, the decision was cast as an affirmation of the individual health insurance mandate. For physicians, however, the new mandate is among the least important aspects of the law.

For physicians who accept Medicare or Medicaid, the ACA includes many provisions that will serve up more administrative burdens and regulatory risk.

Perhaps the most concerning are new rules aimed at reducing the cost of Medicare by cracking down on overpayments, including (but by no means limited to) fraud. Here's a guide to what's coming, and advice on what you need to do now to prepare.

FCA expanded

Among its many provisions, initiatives, and amendments, the reform law dramatically broadened the scope of the False Claims Act, the federal law that allows the government to recover overpayments to its contractors, including healthcare providers, and to pursue allegations of fraud. Specifically, physician practices and other providers who take more than 60 days to report and return overpayments from Medicare and other federal health programs can face civil charges, even if the overpayment was caused by error.

"Now, if you get overpaid, even through an innocent mistake, and you become aware of it but don't promptly repay, you can be subject to prosecution under the False Claims Act for your failure to repay promptly," says Robert J. Saner, a partner in the Washington, D.C. law firm of Powers, Pyle, Sutter and Verville. "That has providers and those of us who counsel them pretty nervous."

Saner, who also is Washington counsel for the Medical Group Management Association, adds that the law's 60-day rule is troublesome, given the complexity of medical billing and the time it takes to track down what caused an overpayment.

"I'm not aware that the government has yet brought False Claims Act penalties under this ACA provision simply for allegedly missing the 60-day deadline to return an overpayment," Saner says. "But that will come, and when it does, everyone is going to get religion around this subject."

Until the government drafts regulations to address the expanded False Claims Act's application to physician practices and other providers, Saner suggests physicians work credit balances promptly, monitor for correct coding, keep an eye out for overpayments, and report issues to their Medicare Administrative Contractors (MACs). Saner does not expect MACs to take a hard line at this time, but he warns that future regulations could say otherwise.

An important step to reduce the risks to you and your practice is a comprehensive compliance program. Eventually, every health provider receiving payments from Medicare, Medicaid, and other federal healthcare programs will be required to have a compliance plan in place, says attorney Michael Ruggio, who leads the healthcare team at the LeClair Ryan law firm.

"The ACA has substantially eased the way to develop, refine, and prosecute False Claims Act cases, so your compliance behavior needs to be enhanced substantially," Ruggio says.

Not only is the government's ability to develop a False Claims Act case enhanced, but so is the ability of whistleblowers to bring cases, Ruggio says.


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