Why You Need a Compliance Plan

Most billing services know and understand the importance of having a well written contract but not all realize that they also should have a compliance plan in place. A compliance plan is for the protection of both the billing service and the provider and it defines the policies and procedures followed by the billing service. Each provider that they bill for should be given a copy of their compliance plan, and the plan should be reviewed on a regular basis. Improper billing practices can lead to civil or criminal offenses.

More and more providers are turning to third party billing services due to the complexity of billing. Some third party billing services also provide coding and other services as well. It is important that the provider is aware of the third party billing services policies and procedures regarding claims submission and coding. It is best that the policies and procedures are outlined in writing to protect both the provider and the billing service.
In 1998 the Office of the Inspector General issued a guideline for compliance plans for third party billing services. The complete guideline can be found at http://oig.hhs.gov/fraud/docs/complianceguidance/thirdparty.pdf .

This guideline includes general principles that can apply to any compliance plan as well as guidelines specific to third party billing services. It identifies risk areas specific to third party billing services such as billing for services not documented, unbundling, upcoding, and inappropriate balance billing. There are seventeen specific risk areas identified.

It also suggests seven steps to prepare an effective compliance plan. The suggested steps are:
Step 1 – Implement written policies, procedures, and standards of conduct. A billing service should determine what and how services will be performed and write it down. All billing services know what they do and how they are going to do it, this just puts it in writing. It is a good tool not only for the provider, but for employees of the billing service as well. Employees need to follow the policies and procedures and it helps if they are in writing. If issues arise, the owner or manager can refer back to the compliance plan.

Step 2 – Designate a Compliance Officer and compliance committee. HIPAA mandates that any person or company handling PHI must have a designated compliance officer. Even if you are a one person show, you should be designated as the compliance officer. If the organization is larger, there should be a compliance committee as well. Any complaints or concerns would be addressed to the compliance officer. If there is a compliance committee then the issue would be brought to them by the compliance officer. The compliance plan should include the name of the compliance officer and contact information.

Step 3 – Conduct effective training and education. All billing services should have some form of training for all employees. They should also have ongoing education on any new issues or policies that arise.

Step 4 – Develop open lines of communication. Communication is the key to success. A compliance plan should encourage communication. Contact information for any owners or employees that would be appropriate for a provider to contact should be included.

Step 5 – Enforce standards through well-publicized disciplinary guidelines. In a perfect world this wouldn’t be needed, but unfortunately there will be occasions where policies and procedures are not followed properly whether it was intentionally or not. It is important to have written guidelines for how infractions will be handled.

Step 6 – Conduct internal monitoring and auditing. Again, in a perfect world this wouldn’t be needed. But, even the best of employees may make mistakes. It is important that monitoring and auditing is done on a regular basis to make sure that policies and procedures are being followed. When included in the compliance plan it assures the provider that the billing service is aware of what is going on internally.

We once had an employee who was a star from the beginning. She was young, smart, quick, quiet – had some great qualities. Unfortunately her work started slipping and one day she came to us complaining about another worker. She stated that we really didn’t need the other worker as she did that other girl’s work anyway and the lazy one spent all day in Facebook and hotmail. We investigated what all our workers were doing on their computers and guess what! The snitch was the guilty one. But the bigger problem was her work. She wasn’t handling her work to our standards. We found a patient bill she falsified just to make the bookkeeping numbers end up correct. This not only goes entirely against our way of handling things, but could be interpreted as fraud. We fired her on the spot. She packed up her desk and went home.
We can be very trusting but we now monitor our workers much closer. This is a must in every office, especially a medical office.

Step 7 – Respond promptly to detected offenses and develop corrective action. When an offense is detected whether it was discovered internally or reported, it is important to respond promptly. Spelling out the actions that will be taken is effective for both the provider and for the billing service.

If you do not currently have a compliance plan you should implement one as soon as possible. The above list of suggestions should help. When your compliance plan is complete make sure you give a copy to each of the providers you bill for.

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One Response to “Why You Need a Compliance Plan”

  1. Compliance Plan: Ensure Your Billing Service Provider Has It | betterbuys.com Says:

    […] to Solutions Medical Billing’s blog, having a compliance plan protects both the medical practice and the billing service provider from […]


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