Mandatory Compliance Programs: Coming Soon to a Provider Near You

May 3, 2012

HealthcareFor over 14 years, the Office of Inspector General (OIG) has been encouraging Medicare and Medicaid providers to adopt voluntary compliance programs.  Since 1998, the OIG has issued compliance guidance to 11 healthcare sectors, including:

However, under the Patient Accountability and Affordable Care Act (PPACA), compliance programs will no longer be voluntary for Medicare and Medicaid providers.  They will be mandatory for those providers who participate in any federal healthcare program.

Specifically, Section 6401 of PPACA requires healthcare providers to establish compliance and ethics programs that contain certain “core elements” as a condition of their participation in the federal healthcare programs.  So far, Health and Human Services (HHS) has not defined the “core elements.”

Additionally, nursing facilities are subject to Section 6102, which identifies eight required elements for nursing facilitycompliance programs, including:

  • Establish compliance standards and procedures to be followed by employees and agents;
  • Designate “high-level personnel” to oversee compliance and give them sufficient resources and authority to assure compliance;
  • Avoid giving discretionary authority to individuals the organization knows or should know have a “propensity to engage in criminal, civil, and administrative violations”;
  • Provide effective communication of the standards and procedures to all employees and agents;
  • Establish monitoring and auditing systems as well as reporting systems that include anti-retaliation protections for employees who report suspected offenses;
  • Consistently enforce standards through disciplinary action;
  • Report the offense and take steps to prevent further similar offenses, if an offense is detected; and
  • Undertake periodic reviews of the compliance program to identify necessary changes.

Nursing facilities must have their mandatory compliance and ethics programs in place by March 23, 2013.

Even though HHS hasn’t defined the “core elements” for all providers or even issued itsoverdue guidance for nursing facilities, the requirements for nursing facilities are consistent with the OIG’s earlier compliance guidance to providers.

Generally, the core and required elements follow the seven steps of the federal Sentencing Guidelines at §8B2.1.  A compliance program that meets the requirements of the Sentencing Guidelines can result in a reduced criminal sentence.

Not only did PPACA mandate compliance programs, it also provided additional funding for fraud and abuse enforcement.  Nearly every day, there are reports of arrests or convictions for healthcare fraud or abuse.  As the costs of healthcare continue to rise, everyone is intent on identifying and eliminating fraud and abuse in the federal healthcare programs.

Although most large providers have already developed compliance programs, many smaller providers have yet to take action.  If these smaller providers can’t certify that they have compliance and ethics programs in place that include the core elements, they will be out of the federal healthcare programs – Medicare and Medicaid – that many of them rely on to stay in business.

So, for providers that have not yet adopted compliance and ethics plans, now is the time to take action.