S e c t i o n s

MPM Publications

Part 1: OIG Guidelines Require Provider Action

Editors Note: This is the first in a two-part series of articles about the OIG Guidelines for medical billing companies. This article will provide a review of the background of the guidelines and what they include. In our next issue, we continue the topic with a discussion of how the guidelines should be implemented and what you and your billing company should coordinate regarding compliance issues.

The Office of the Inspector General (OIG) recently announced compliance program guidelines for third-party medical billing companies, following guidelines previously released for clinical laboratories, hospitals and home health agencies. The OIG guidelines are important to medical practices because they require direct participation by providers for the billing company's compliance plans to be successful. The OIG views the billing company-provider relationship as a vital partnership to defeat fraud and abuse.

The OIG strongly encourages frequent and open communication between billing companies and providers. Because some billing companies support a variety of providers with different specialties, your billing company should coordinate compliance responsibilities with your practice by formalizing a written contract specifying functions that are shared and independent. Ineffective billing company compliance programs may expose your practice to risk and liability. Compliance plans are beneficial to a billing company in the eyes of the OIG because they help reduce fraud and abuse, improve the quality of business operations and health care, thereby reducing the cost of health care. Additionally, compliance plans assist in establishing effective internal controls, improve medical record documentation and improve communication between the billing company and the provider.

The OIG bases required elements of a compliance plan on the seven steps of the Federal Sentencing Guidelines:

1. Development of written policies and procedures,
2. Designation of a compliance officer,
3. Development of regular education and training programs,
4. Establishment of a hotline,
5. Development of a response system,
6. Utilization of audits and risk evaluations, and
7. Investigation and identification of systematic problems.

Written policies and procedures include a general Standards of Conduct, which are clear and concise fundamental standards, and more specific operating policies that articulate daily operating procedures. The OIG also recommends that billing companies conduct a comprehensive self-administered risk analysis. This risk analysis will identify particularly problematic areas that you need to be aware of, such as billing for services not performed, unbundling, upcoding, misuse of provider identification numbers, billing for outpatient services rendered in connection with inpatient stays, duplicate billing, billing for discharge in lieu of transfer, improper use of modifiers, violation of anti-kickback statute, improper routine waiver of co-payments, billing "insurance only," and discounts and professional courtesy.

The billing company will use the results of their risk analysis to develop additional written policies regarding coding services. Your participation in this area will be extremely important. Areas to discuss include internal coding practices, "assumption" coding, documentation alteration, coding with insufficient information, billing for services provided by unqualified or unlicensed clinical personnel, and employing sanctioned individuals. Ensure that your billing company utilizes the Health Care Financing Administration (HCFA) Documentation Guidelines for Evaluation and Management Services, which is available on the Internet at www.hcfa.gov/medicare/mcarpti.htm. Billing companies should supply billing personnel with the most recent editions of ICD-9, CPT, HCPCS and other applicable resources for specialized coding systems for specific segments of the health care industry.