By: Jeff Cohen
A recent Department of Justice $500,000 settlement with a cardiology practice underscores the need for ensuring tighter compliance by medical practices. There, the practice billed Medicare for cardiology procedures for which interpretive reports were also required. Medicare paid for the procedures, but upon audit, CMS could not find the requisite interpretive reports. The False Claims Act case settled for $500,000, but it’s likely that (1) the reimbursement by Medicare was far less, and (b) the legal fees behind the settlement weren’t too far behind the settlement amount! Had the practice self-audited each year, would they have found the discrepancy?
Medical practices have felt the weight of price compression and regulatory load more than probably any segment in the healthcare sector. They are doing far more for far less. And regulations expand faster than viruses! Hence, many have a strategy of regulatory compliance that can best be characterized as a combination of facial compliance (“We bought the manual and put it on the shelf”) and hope (“They’re not really serious about this, are they?”). Unless you’re part of a practice of more than 20 doctors, it’s likely that you can do more to ensure regulatory compliance.
But the first step is to change your view of compliance. Looking at it, for instance, as yet another expense won’t help you. Many may say “How can we afford it?” Many physicians and medical practices believe that if they do the best they can, given the complexity of the constantly changing regs, they’ll probably be ok. And in truth, had the Justice Department though that the cardiologists were up to no good, there would have been a criminal indictment.
Compliance has to be viewed as an investment. How much would it have cost the cardiology practice to self audit, $10,000? A lot less than they ultimately had to pay. The sad truth is probably that only people who “get caught” fully appreciate the value of compliance. That’s evidenced by the fact that there continues to be active and regular enforcement of illegal activity that every doctor should know better by now, including—
▪There is a frequent lack of required physician supervision for ancillary services, especially incident to services;
▪Physicians still refer to entities they own which provide designated health services (“DHS”) (e.g. physical therapy, rehab, diagnostic imaging, clinical lab, DME, pharmacy items);
▪Practices allocate profits from DHS among them based on who referred or generated the business; and
▪Physicians are receiving income for which there is not no safe harbored contract.
2021 is a new year. Take a step back and have someone look into what you’ve built. Protect the foundation of your practice and avoid the huge cost of innocent compliance missteps.