Why Voluntary Compliance Plans for Individual and Small Physician Practices Are Essential

Doctors who treat patients on Medicare or Medicaid need to comply with the Patient Protection and Affordable Care Act of 2010. According to the Office of Inspector General (part of the US Department of Health and Human Services), individual physicians and small group physician practices must develop compliance programs that address the following seven issues:

  1. “Conduct internal monitoring and auditing
  2. Implement compliance and practice standards
  3. Designate a compliance officer or contact
  4. Conduct appropriate training and education
  5. Respond appropriately to detected offenses and develop corrective action
  6. Develop open lines of communication with employees
  7. Enforce disciplinary standards through well-publicized guidelines”

The reasons to implement a voluntary compliance program

According to the OIG, an effective voluntary compliance program helps put the patient’s care first. A good program helps patient care by increasing the accuracy of medical and billing information.

Compliance programs:

  • Help physicians show that their billing claims are accurate and non-fraudulent
    • Faster payment of claims
    • Reduced billing errors
    • Help disclose fraud before claims are made
  • Help the physician defend against any charges the practice violated the False Claims Act, the Stark self-referrals. anti-kickback statutes, and other federal laws (such as the Patient Protection and Affordable Care Act of 2010).
    • Decrease the odds of an HCFA (Health Care Finance Administration) or OIG audit
    • Help with the avoidance of self-referral and anti-kickback conflicts
    • Voluntary compliance programs help to show the physician is acting in good faith to properly submit medical billing claims.
  • Provide guidance to the staff on proper billing procedures
    • Having a program in place tells employees, they do have an “ethical duty to come forward and report erroneous or fraudulent conduct, so that it may be corrected.”


Doctors need to understand the laws and regulations that apply to the way they bill for services, work with insurance companies, submit claims to the government, enter into business relationships […]

Why the compliance program was created by the OIG

Generally, the compliance program was created to address claims for payment from federal programs such as Medicare and Medicaid. A good compliance program should also help with the submission of claims to private payors. Generally, compliance programs for individual doctors and small medical practices are different than compliance programs for large medical practices.

Currently, the OIG does not use a specific number to assess what is “small”. The OIG also has different compliance program guidelines for the following types of healthcare practices:

  1. Hospitals
  2. Clinical laboratories
  3. Home health agencies
  4. Durable medical equipment suppliers
  5. Third-party medical billing companies
  6. Hospices
  7. Medicare+Choice organizations offering coordinated care plans
  8. Nursing facilities

The individual and small practice compliance guidelines, according to the American Academy of Family Physicians, are the result of Office of Inspector General input from numerous sources – in response to a solicitation notice and consulting with the “Health Care Financing Administration (HCFA) and the Department of Justice.” The AAFP states that the burden is on the physicians to:

“reasonably ensure that claims submitted to government health care programs are true and accurate.”

The AAFP states that the reason for the voluntary guidelines is that false and fraudulent claims cost Medicare billions of dollars yearly.

How an experienced OIG compliance lawyer can help

Individual doctors, small practices, and any of these eight listed medical service types should consult with an experienced healthcare compliance lawyer as soon as possible. An experienced OIG compliance lawyer can help explain the compliance guidelines and the dangers and penalties for noncompliance. Experienced healthcare lawyers understand a full range of legal issues medical practices need to understand.

The penalties for violating the various federal laws can include criminal prosecution and civil lawsuits which can result in a criminal record, incarceration, large monetary penalties, and sanctions. Medical practices can be forced to close if the penalties are too high.

The AAFP states that doctors generally aren’t prosecuted (for False Claims Act violations) for billing errors that are innocently made. More precisely, physicians shouldn’t be prosecuted for “erroneous” claims. They may be prosecuted for claims that are “reckless” or “intentional.” The government does decide whether a medical claim is either the former (erroneous) or the latter (reckless/intentional). A compliance program helps to show mistakes were just erroneous. A respected OIG healthcare compliance lawyer understands these legal differences.

A skilled healthcare compliance lawyer works to help your medical business create programs that can help show the OIG that you’re working to do what’s best for the patient. Quality compliance programs should run smoothly. Often, they can be created with minimal cost and time.

Compliance programs will vary depending on the type of medical practice, the size of the practice, the location, and many other factors. An experienced voluntary medical compliance attorney will advise you on the seven main requirements and the laws that can cause prosecutions and lawsuits. He’ll help you craft a practical and viable solution.


California, New York, Massachusetts, and other states that emphasize corporate practice of medicine & fee-splitting lead medical spa compliance enforcement.

Common types of billing misconduct

Before creating a compliance program, physicians should have a full understanding of the types of conduct/false billing that may arise. Some concerns, according to the AAFP, common to most medical practices are:

  • Improper coding and billing
  • Billing for services that weren’t reasonable and necessary
  • Failing to document the services provided
  • Self-referrals, kickbacks, and improper incentives

Other actions that can cause improper billing complaints include:

  • Improper certification of medical equipment or the need for home care services
  • Improper third-party billing
  • Billing for professional courtesy
  • Improper renting of medical office space
  • Illegal advertising
  • Improper billing for teaching doctors
  • Improper billing for emergency care
  • Many other types of medical fraud and misconduct

The seven voluntary compliance steps doctors and small practices must consider

  1. Conduct internal monitoring and auditing.” The compliance program should regularly evaluate how it holds employees responsible. The program should assess if the claims are correct and if they’re being made properly. This review should be done yearly, at least. The review should examine the medical practice’s policies and procedures to ensure accuracy, timeliness and completeness, and conducting self-audits to determine if claims are accurately coded and services billed are reasonable, necessary and adequately documented. The OIG has specific suggestions for how this should be done.
  1. Implement compliance and practice standards.” The duties for each employee should be identified. The medical practice should create a “code of conduct.” The code should detail the practice’s compliance pledge. The medical practice and employees should understand how compliance standards will be incorporated into the medical practice’s daily routine.
  1. Designate a compliance officer or contact.” The doctor or small practice should make clear how the policies and procedures will be followed. Solo and small practices often can’t afford to hire a compliance officer. The OIG recommends possibly distributing the duties among several employees such as an office manager and the lead biller. Compliance officer duties should include:
  • Monitoring the implementation of the program
  • Updating and revising the program
  • Taking steps to improve quality and efficiency
  • “Checking to see if any of the practice staff are excluded from participation in federal health care programs”
  • Investigating alleged breaches of the program

The compliance officer or team should not have any conflicts of interest. They should be able to make judgements independent from other “operational duties.

  1. Conduct appropriate training and education.” The medical staff should clearly understand their duties and what’s expected of them. The practice needs to do more than just pass out the company literature. Each employee should be informed of the risks of noncompliance. Employees should understand that compliance is part of their job duties. Each employee should understand his/her individual role in compliance. Special focus should be given to make sure the people who do the staffing and billing understand the compliance rules. The OIG recommends that this special focus include:
    1. “Coding requirements
    2. Claim development and submission processes
    3. The signing of physician forms without the physician’s authorization
    4. Proper billing and documentation of services,
    5. The legal sanctions for fraudulent billing.”

Training should be updated so that it’s current. The individual training for each employee should be documented in the employee’s personnel records.

  1. Respond appropriately to detected offenses and develop corrective action.” Doctors and small practices are subject to prosecution if they fail to “disclose a known overpayment to the Medicare carrier even if the payment was not fraudulently obtained.” Any knowledge of a billing error should be disclosed to Medicare, Medicaid, or the entity handling the payment claim. The OIG has specific procedures for disclosing fraudulent claims that your voluntary compliance lawyer can explain.
  1. Develop open lines of communication with employees.” Employees should feel comfortable disclosing errors, fraud, and irregular conduct. They shouldn’t have to worry about losing their job, not being promoted, or disciplined for following compliance procedures . The OIG voluntary compliance guidelines recommend using such tools as drop boxes or an open-door policy to encourage employees to communicate improper conduct. The issue of confidentiality should be addressed so employees understand their rights and obligations.
  1. Enforce disciplinary standards through well-publicized guidelines.” For compliance programs to work, the staff should understand the sanctions and disciplinary actions for noncompliance. Discipline can include discharge, temporary suspension, demotion, probation, warnings, and restitution. Violators of physician compliance standards should understand that false billing and other misconduct can lead to criminal prosecution and civil lawsuits. Disciplinary rules and violations should be properly documented.

The Office of Inspector General will review your practice’s compliance program if false billing or fraud is investigated. A clear and complete program isn’t a complete defense to violations of federal law – but it can help mitigate the penalties. It may help avoid some prosecutions. Mostly, it should help to reduce the likelihood of violations in the first place.

According to the AAFP, misconduct should generally be corrected within 90 days from when it was detected. A quality compliance program should “provide for an internal investigation of all reported violations.” If misconduct is detected, the medical practice should examine why the compliance program failed:

  • Which one of the seven steps needs to be adjusted to prevent future problems?
  • Does an employee need to be reported to law enforcement?
  • What steps should be taken to disclose the misconduct to the OIG.


False and fraudulent medical billing can lead to substantial criminal and civil practices. You may even be forced to suspend your medical practice.

Meeting the voluntary compliance standards created by the Office of Inspector General can help catch billing fraud. Compliance programs can also help mitigate against charged the medical practice violated federal laws such as the False Claims Act, Stark law, or antikickback statutes.

For small and solo practices, there are seven essential compliance standards that must be met.

Quality compliance programs help a medical practice run smoother and serve their patients better.

Speak with a healthcare compliance lawyer today to set up your medical compliance program the correct way

Creating a voluntary compliance is both wise legally and medically. Compliance programs help detect false billing, fraudulent billing, and overbilling. Good compliance programs engage the billing department and the entire medical staff. With proper planning, compliance should be a routine part of your medical practice.

To understand why your individual or small medical practice should have a compliance program and what the requirements are, contact a healthcare compliance lawyer today. Cohen Healthcare Law Group, PC. understands the laws and the practical issues to get your compliance program running quickly, properly, and efficiently.

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