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Because third party medical billing companies provide crucial services that could greatly impact the solvency and stability of the Medicare Trust Fund, the Department of Health and Human Services Office of the Inspector General has prepared compliance program guidance intended to assist them and their agents and subcontractors in developing effective internal controls that promote adherence to applicable Federal and State law, and the program requirements of Federal, State and private health plans. Like previously issued OIG compliance guidances, adoption of the Compliance Program Guidance for Third-Party Medical Billing Companies is strictly voluntary.
According to survey results from the Healthcare Billing and Management Association, its members process more than 17.6 million claims per month totaling $18 billion a year. Increasingly, healthcare providers (defined for purposes of this compliance program as any individual, company, corporation or organization that submits claims for reimbursement to a Federal healthcare program) are relying on billing companies to assist them in processing claims in accordance with applicable statutes and regulations. Additionally, healthcare providers are consulting with billing companies to obtain timely and accurate advice regarding reimbursement matters, as well as overall business decision-making. Thus, the OIG considers the compliance guidance for third-party medical billing companies particularly important in the partnership to defeat healthcare fraud.
Variations in Services Give Rise to Different Policies
It is important to note the tremendous variation among billing companies in terms of their type of services and the manner in which these services are provided to their respective clients. For example, some billing companies code the bills for their provider clients while others only process bills that have already been coded by the provider. Some billing companies offer a spectrum of management services, including accounts receivable management and bad debt collections, while others offer only one or none of these services. Variations in services give rise to different policies to ensure effective compliance. For billing companies that focus their services on a particular sector of the healthcare industry, it is recommended that they should also consult any compliance program guidance previously issued by the OIG for that particular setting (e.g., the 1998 Compliance Program guidance for Hospitals).
Specifically, a guidance program will guide your billing company’s governing body (e.g., boards of directors or trustees), chief executive officer (CEO), managers, billing and coding personnel and other employees in the efficient management and operation of the company. They are especially critical as an internal quality assurance control in reimbursement and payment areas, where claims and billing operations are often the source of fraud and abuse and, therefore, historically have been the focus of Government regulation, scrutiny and sanctions.
It is incumbent upon your billing company’s corporate officers and managers to provide ethical leadership to the organization and to assure adequate systems are in place to facilitate and promote ethical and legal conduct. Compliance programs also provide a central coordinating mechanism for furnishing and disseminating information and guidance on applicable Federal and state statutes, regulations and other payer requirements.
The OIG believes that open and frequent communication between your billing company and you is fundamental to the success of any compliance endeavor. Billing companies are in a unique position with regard to establishing compliance programs. An individual billing company may support a variety of providers with different specialties and, consequently, different risk areas. It is with this in mind that the OIG strongly recommends that your billing company coordinate with you to establish compliance responsibilities. Once the responsibilities have been clearly delineated, they should be formalized in the written contract between you and your billing company. The OIG recommends the contract enumerate those functions that are shared responsibilities and those that are the sole responsibility of either the billing company or the foot and ankle surgeon.
Implementing an effective compliance program requires a substantial commitment of time, energy and resources by senior management and the billing company’s governing body. Superficial programs that simply purport to comply with the elements discussed and described in this OIG Compliance Program Guidance or programs that are hastily constructed and implemented without appropriate ongoing monitoring will likely be ineffective and could expose the billing company to greater liability than no program at all. Additionally, an ineffective compliance program may expose the billing company’s provider clients to liability where those providers rely on the billing company’s expertise and its assurances of an effective compliance program. Although it may require significant additional resources or reallocation of existing resources to implement an effective compliance system, the long-term benefits of your billing company implementing the program significantly outweigh the costs.
Risk areas that the OIG has identified as particularly problematic are: billing for services not actually documented; unbundling, upcoding, inappropriate balance billing, inadequate resolution of overpayments; lack of integrity in computer systems; computer software programs that encourage billing personnel to enter data in fields indicating services were rendered although not actually performed or documented; failure to maintain the confidentiality of information/records; knowing misuse of provider identification numbers, which result in improper billing; outpatient services rendered in connection with inpatient stays; duplicate billing in an attempt to gain double payment; failure to use modifiers properly; billing company incentives that violate the anti-kickback statute or other similar Federal or state statute or regulation; joint ventures; routine waiver of copayments and billing third-party insurance only; and discounts and professional courtesy. A billing company’s prior history of noncompliance with applicable statutes, regulations and Federal healthcare program requirements may indicate additional types of risk areas where the billing company may be vulnerable and may require necessary policy measures to prevent avoidable recurrence.
Billing entities that do not code bills should implement policies that require notification to the physician who is coding to implement and follow compliance safeguards with respect to documentation of services rendered. Moreover, the OIG recommends that billing companies that do not code for their provider clients incorporate in their contractual agreements the provider’s acknowledgement and agreement to address specific coding compliance safeguards outlined in the plan. Written policies and procedures should ensure that coding and billing are based on medical record documentation when billing companies provide the coding services. The billing company should also institute a policy that all rejected claims pertaining to diagnosis and procedure codes are to be reviewed by the coder or the coding department.
Among the risk areas that billing companies who provide coding services should address are:
- Internal coding practices (including software edits, should be reviewed periodically to determine consistency with all applicable Federal, State and private payer healthcare program requirements);
- "Assumption" coding (referring to the coding of a diagnosis or procedure without supporting clinical documentation);
- Alteration of the documentation;
- Coding without proper documentation of all professional services;
- Billing for services provided by unqualified or unlicensed clinical personnel);
- Availability of all necessary documentation at the time of coding;
- Employment of sanctioned individuals (Billing companies should ensure that they do not employ or contract with individuals that have been sanctioned by the OIG or barred from Federal procurement programs.);
Foot and ankle surgeons and their billers should establish policies and procedures, as well as responsibility, for timely and appropriate identification and resolution of any overpayments. For example, a billing company may re-designate segments of its information system to allow for the segregation of patient accounts reflecting credit balances. The billing company could remove those accounts from the active accounts and place them in a holding account pending the processing of a reimbursement claim to the appropriate payer. A billing company’s information system could should have the ability to print out the individual patient accounts that reflect a credit balance in order to permit simplified tracking of credit balances. The billing company should maintain a complete audit trail of all credit balances.
Physicians should ensure that their billing entities have established procedures for maintaining the integrity of their data collection systems. This should include procedures for regularly backing up data (either by diskette, restricted system or tape) to ensure the accuracy of all data collected in connection with submission of claims and reporting of credit balances. At all times, your billing company should have a complete and accurate audit trail. Additionally, billing companies should develop a system to prevent the contamination of data by outside parties. This system should include regularly scheduled virus checks. Finally, billing entities should ensure that electronic data are protected against unauthorized access or disclosure.
Violations of a billing company’s compliance program, failure to comply with applicable Federal or State law, rules and program instructions and other types of misconduct threaten a billing company’s status as a reliable, honest and trustworthy company. Detected but uncorrected misconduct can seriously endanger the mission, reputation and legal status of the billing company.
Billing companies are in a unique position to discover various types of fraud, waste, abuse and mistakes on the part of the provider for which they furnish services. This unique access to information may place the billing company in a precarious position. On the one hand, the billing company’s allegiance is to the provider client. On the other, the billing company maintains a commitment to comply with the applicable Federal and State laws and private health plans. The OIG recognizes the importance of maintaining positive and interactive communication between billing companies and the providers they service. It is with this understanding that the OIG has addressed the issue of obligations on the part of third-party medical billing companies with regard to provider misconduct.
If the billing company finds evidence of misconduct (e.g., inaccurate claim submission) on the part of the provider that they service, the billing company should refrain from submitting the questionable claims and notify the provider in writing within thirty (30) days of such a determination. If the billing company discovers credible evidence of the providers continued misconduct or flagrant fraudulent or abusive conduct, the billing company should: (1) refrain from submitting any false or inappropriate claims; (2) terminate the contract; and (3) report the misconduct to the appropriate Federal and State authorities within a reasonable time, but not more than 60 days after determining that there is credible evidence of a violation.
A billing entity’s failure to notify authorities of an overpayment within a reasonable period of time could be interpreted as an intentional attempt to conceal the overpayment from the government, thereby establishing an independent basis for a criminal violation with respect to the billing company, as well as any individuals who may have been involved. For this reason, billing company compliance programs should ensure that overpayments are identified quickly and encourage their providers to promptly return overpayments obtained from Medicare or other Federal healthcare programs.
It is recommended that you carefully discuss this document with your billing entity at the earliest possible opportunity so that you fully understand and delineate in writing a compliance agreement acceptable to you and your billing group. |