C o m p l i a n ce To d a y J an u a r y 2 0 1 8

January 2018 Takeaways

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Enforcement and regulatory concerns for hospitals in 2018

by Arthur J. Fried, Melissa L. Jampol, and Chelsea E. Ott (page 23)

» Hospitals must be prepared to respond to a changing regulatory and enforcement environment in 2018, especially with respect to electronic health records (EHR), billing and coding, and OPPS and IPPS.

» Hospitals need to ensure that they have effective processes in place for employees to make complaints as well as to ensure that the complaints are thoroughly investigated and resolved objectively and decisively.

» With a continued emphasis by regulators on improper billing, hospitals should implement effective controls and monitor and audit their billing and provider arrangements to prevent improper billing, particularly of federal healthcare programs.

» In the event hospitals discover potential overpayments, they should seriously evaluate the repayment and self‑disclosure requirements of federal and state law.

» Hospitals are training providers on the technical infrastructure, effective use of the EHR, and regulatory incentives, but they must be wary that an EHR system itself can cause false claims, or lead to false claims, if not properly implemented.

A review of 2017 enforcement actions against physicians

by Jeremy Burnette, Sidney Welch, and Laura Little (page 32)

» Physicians are increasingly being investigated and held personally liable for False Claims Act (FCA) violations alongside corporate entities in the post‑Yates Memo era.

» Many 2017 FCA settlements are related to billing for services that were medically unnecessary or never performed, suggesting medical record documentation is increasingly critical to defending FCA liability.

» Providing and billing for substandard or different care than that required by federal healthcare programs can create FCA liability.

» Physicians should expect law enforcement to investigate and pursue them, alongside corporations, for violations of the federal Stark Law and Anti‑Kickback Statute.

» To defend against FCA liability, physicians should perform regular exclusion checks, claims audits, and due diligence before starting new ventures or contracting with healthcare entities.

Ordering and billing observation services: A simple service with complex regulations

by Ronald Hirsch (page 40)

» Observation is a service provided to outpatients and not a status.

» Observation hour counting begins with the order for observation.

» Observation hour counting ends with the end of medically necessary hospital services.

» Hours must be carved out from observation counting in two contrasting situations.

» Although observation is paid as a single payment, compliant hour counting is still required.

Compliance investigations: When culture is the issue

by Susan Walberg (page 46)

» Compliance investigations often serve to identify culture problems.

» If left unchecked, culture issues frequently escalate into actual compliance risks.

» Patterns of vague complaints may indicate a culture problem.

» Neutral parties, such as compliance professionals, are best suited to help resolve culture issues.

» Harassment, retaliation, or hostile work environment complaints are red flags.

Post-acute care compliance issues, Part 1: Long-term care

by Todd Selby and Robert W. Markette, Jr.

(page 53)

» Long‑term care (LTC) facilities are required to implement annual, facility‑wide, and community‑based assessments to determine what resources are necessary for day‑to‑day and emergency care for their residents.

» The Quality Assurance and Performance Improvement (QAPI) Requirement of Participation requires all LTC facilities to develop, implement, and maintain an effective, comprehensive, data‑driven QAPI program that focuses on systems of care, outcomes of care, and quality of life.

» CMS released a revised version of the State Operations Manual, which provides valuable insight on how state surveyors will interpret and conduct surveys under the new Requirements of Participation (RoPs).

» CMS also revised the Survey Protocol for LTC facilities to combine the best aspects of the current traditional survey process and the Quality Indicator Survey.

» LTC facilities must track the results of interventions to ensure that desired improvements are realized and sustained.

Research: Institutional Review Boards and the Common Rule

by Urton Anderson, Ralph B. Kimbrough, Jr., and Sean Liao (page 58)

» Challenges ahead for adopters of Common Rule revisions encompass new definitions, new interpretations, and new rules.

» Offices of Research Integrity face structural changes due to revisions.

» External IRB reviews are on the rise, requiring greater oversight responsibility.

» Costs and workloads of IRB reviews will most likely increase.

» IRB reviews will have to be tailored by institutional size and complexity.

Compensation and compliance: Five common sense steps

by Jen Johnson (page 66)

» Understand if the service is needed (absent referrals)

to help establish that the arrangement is commercially reasonable.

» Confirm that the value or volume of referrals is not considered as a basis for compensation.

» Ensure the transaction or compensation terms are clearly outlined, set in advance, and agreed upon in writing.

» Properly document the supporting evidence for establishing the compensation is at fair market value.

» Monitor the arrangement to ensure the services are still necessary and being performed in accordance with the agreement terms.

Justified wastage: Appropriately applying the – J W modifier

by Dena Knippen (page 69)

» The – JW modifier is required for reimbursement of discarded drugs/biologicals.

» Use the smallest package size available for the prescribed dosage.

» Documentation must be included in the patient medical record.

» Claims must reflect administered and discarded amounts when appropriate.

» Review internal processes to ensure receipt of proper reimbursement.

Assessing your HIPAA risk: Don’t forget the paper

by Jason Throckmorton (page 72)

» Paper records should be stored and/or destroyed properly.

» NIS T recommends using a cross‑cut shredder.

» A business associate agreement (BAA) is needed with a document destruction vendor.

» Obtain a certificate of destruction to show proof of destruction.

» Reduction of risk is important.

Certifying Medicaid program data, Part 2: Pre-data submission diligence

by Jay Davis (page 74)

» Accurate, complete, and truthful certified data submissions are essential to state monitoring and administration of major Medicaid program requirements and activities.

» The Compliance department should establish a diligent‑ review audit protocol to test and validate the accuracy and completeness of the submission before the data is certified.

» Encounter data submissions are integral to Medicaid program administration, are subject to close regulatory scrutiny, and merit special attention in the pre‑submission review and testing process.

» Overutilization and underutilization affect the accuracy, completeness, and utility of encounter data for Medicaid program oversight and integrity, and they may indicate or identify provider fraud, waste, and abuse.

» Data certifications play an integral role in furthering Medicaid program integrity when supported by well‑ conceived pre‑submission review and testing protocols.