5 Fundamental Medicare Compliance Concepts

Introduction to Medicare Compliance

There are “rules of life” we have learned that can really bring certain essential Medicare compliance concepts into focus. While perhaps cliché, these sayings and principles can be quite helpful when explaining fundamental Medicare compliance concepts to new staff or non-compliance personnel.  These 5 essential Medicare compliance concepts include:

(1)  “If it isn’t yours, give it back” 

Sound familiar? This is one of the first principles we are taught as children.  Nevertheless, it is as true today as it was back then.  Medicare providers have a legal obligation to promptly return any overpayments identified. In fact, with the passage of the Affordable Care Act (ACA) in 2010, it is now a requirement that providers return Medicare overpayments to the government within 60 days of identification or face significant liability under the False Claims Act.

While the prompt, mandatory return of a known overpayment is clearly required, we were recently asked about a provider’s obligations when it comes to less clear potential overpayments.  For example, suppose that a provider identifies a specific claim that was improperly submitted and paid by Medicare.  When reviewing how the overpayment occurred, the provider also learns that a former employee mistakenly believed that a certain service was covered by Medicare.  While the provider may only have evidence that a single claim was improperly submitted and paid by Medicare, the provider may suspect that the former employee may have incorrectly handled similar claims.  The issue therefore becomes whether a provider has an obligation to further investigate and determine whether other, unconfirmed overpayments may exist.  In considering this issue in furtherance of Medicare compliance, we believe that the general principle still applies, regardless of the fact that the exact language of ACA may not cover this situation.  Remain unconvinced?  In addition to being the ethical and right action to take, it is important to keep in mind that even if the 60-day repayment provisions of the ACA may not apply (although CMS may believe differently), a provider who turns a blind eye to potential overpayments is possibly exposing the practice to a whistleblower suit under the False Claims Act. Do you know of a potential overpayment?  More than likely, someone else in your practice is also aware of the problem. The bottom line is simple – “If it isn’t yours, give it back”. 

(2)  “Participation in the Medicare program is a privilege, not a right.”

Remember taking driver’s education in high school?  I still remember my driver’s education teacher repeatedly reminding us that we did not have a right to have a driver’s license.  Rather, it was a privilege – a privilege that could be taken away as quickly as it was granted if we failed to follow the laws of the State and the rules of the road.  Frankly, Medicare compliance is no different.  Health care providers do not have a right to participate in the Medicare program.  It is a privilege that must be earned and maintained.  Should a provider fail in their Medicare compliance activities, this privilege can be taken away.  With this in mind, providers must actively work to better ensure that their  Medicare compliance initiatives meet Medicare’s coding and billing requirements. Should they not fully understand the program’s guidelines, it is the provider’s responsibility to learn Medicare’s rules and ensure that the provider’s business practices fully comply with the program’s provisions.

(3)  “If it sounds too good to be true, it probably is.”  

Physicians, small group practices and clinics should exercise caution when dealing with ‘consultants’ or ‘experts’ who boast of guaranteed increases in revenues or profits.  Unfortunately, many providers are dealing with steady declines in both Federal and private payor reimbursement rates.  In the current economy, unemployment rates have remained high and many patients are having a difficult time meeting their financial obligations.  In this environment, the promises of “innovative” business models or ways to modify a provider’s billing practices which will significantly increase revenues can be tempting to a provider experiencing financial difficulties.  Have you been approached by someone with a “deal” which sounds too good to be true?  Check out HHS-OIG’s “Fraud Alert” titled “Special Advisory Bulletin: Practices of Business Consultants.”  While published a decade ago, the lessons and concerns discussed in the bulletin are as current today as they were a decade ago.  And remember – the adage “If it sounds too good to be true, it probably is,” is especially true when it comes to health care business opportunities.

(4)  “Everyone does it, so it must be okay.”

In years past, a number of drug companies and medical device companies played fast and loose with Medicare’s rules, showering physicians with lavish gifts, inviting them to attend paid vacations and entering into sham “advisory” or “consulting” agreements which paid the physicians regular stipends for little, if any, work.  Why did these companies engage in these practices?  In many instances, the companies wanted to influence the physicians’ decision-making when it came time to prescribe certain drug or order medical devices for their patients. These actions amount to kickbacks – plain and simple.  Today, drug and medical device industry representatives have made great strides in educating their members to eliminate these illegal practices.  At the height of these practices, many physicians appeared to take the position that since their peers accepted kickbacks, it must be okay.  Clearly, this mindset is just flat wrong.

Unfortunately, it isn’t limited to drug and medical device companies. Generally, physicians should exercise care before accepting any thing of value from a company or clinical practice with whom the physician works – especially when the physician either makes referrals to the company or prescribes items or devices sold by that company to their patients.  In considering this issue, it is often helpful to ask, “Where do I send my referrals?” Additionally, ask yourself, “Who refers patients to me?” Once answered, these business relationships should be carefully reviewed to ensure that there are no transactions that could give even the appearance of being improper. A typical example which repeatedly arises involves the use of “Medical Director” agreements where a physician is paid a monthly stipend which exceeds the fair market value of any services which are provided under the agreement. This is an important area in Medicare compliance, as it also implicates potential criminal activities.

(5)  “Neatness and accuracy count.”   

We represent a wide variety of health care providers when responding to Medicare post-payment audits conducted by ZPICs and other Medicare contractors. Over the last two years, we have noted a significant increase in the number of claims being denied because medical documentation is either illegible or incomplete. From a Medicare compliance standpoint, these problems are among the easiest for a provider to remedy.

Handwritten Portions of a Medical Record Must be Legible – When assessing denial reasons cited by ZPICs, our attorneys are often required to go through medical records as we assemble responsive arguments in support of payment.  More often than not, we don’t have any problem deciphering the records which the ZPIC alleges are “illegible.”  Having said that, ZPICs and other contractors have an enormous audit caseload, meaning they don’t spend a lot of time trying to make sense out of poorly written passages.  As a result, if their reviewers cannot readily read a passage, they merely deny the claim and move on.

The lesson to be learned is clear – physicians, nurses, therapists, counselors and others must ensure that any handwritten comments, signatures, dates or other information entered into a medical record can easily be read by an outside third party who is not experienced in reading the handwriting of your staff.  It is important to keep in mind that if there is an audit or review of this information by a ZPIC or another government contractor, it is likely to be several years in the future. During that period, the writer may no longer be with the practice and it may be difficult (if not impossible) to easily locate the writer for assistance in deciphering handwritten passages.  For Medicare compliance, regular self-audits can prove quite helpful in identifying possible problems.

If you are conducting a self-audit and find that words or passages are illegible or incorrect, you should consider taking the following remedial steps:

Advise your staff of the problem and follow-up to ensure that future entries are legible and accurate – Physicians, nurses and staff should be educated regarding the importance of ensuring that their handwriting is easily legible and the information they are providing is accurate. In most instances, once this is identified as an issue, most staff are willing to work with you so that future problems do not arise.  We recommend that regular follow-ups are conducted to ensure that problematic handwriting does not again deteriorate to where it is again illegible.

Correcting illegible or erroneous words, phrases or passages – Should you find that certain portions of a patient’s record documenting prior services rendered are illegible, you cannot merely erase it or use white out to hide the original handwritten section  before re-writing the passage so that it is legible. We recommend that you contact your Compliance Officer or legal counsel before making any changes to a medical record (regardless of whether the record is handwritten or electronic).  Legal counsel can guide you on the correct way to make changes or corrections to a medical record which documents services previously rendered. If a change or correction to a word or passage is necessary, you should not erase, white-out, scratch out or use a marker to conceal the original remark.  Instead, we usually recommend that a single line through the incorrect or illegible phrase or passage is made. If you are audited, an outside reviewer will be able to readily see the original passage. Next, the corrected entry should be carefully written next to or above the original entry. It should then be signed and dated by the individual making the correction.  In this fashion, an outside reviewer will not be misled in any way about what was originally written, when the corrected entry was made and / or the identity of the person making the change to the record.

As set out in Chapter 3 of the Medicare Benefit Policy Manual, the Centers for Medicare & Medicaid Services (CMS) advises ZPICs to consider the following:

“3.3.2 – Medical Review Guidance

For example, ZPIC staff looks for some of the following situations when reviewing documentation:

 • Possible falsification or other evidence of alterations including, but not limited to: obliterated sections; missing pages, inserted pages, white out; and excessive late entries;

 • Evidence that the service billed for was actually provided; or,

 • Patterns and trends that may indicate potential fraud.” (emphasis added).

 As a participating provider in the Medicare program, it is essential that you ensure that the care and treatment you provide is factual, accurate and recorded in a legible fashion. Ultimately, providers who diligently work to achieve these points will have made significant strides towards Medicare compliance in their  practice.

Liles Parker attorneys have extensive experience assisting providers in establishing an effective Medicare Compliance Plan. Should you have questions regarding Medicare compliance or how to instill a compliant culture in your clinic or practice, please give us a call at 1-800-475-1906 for a complimentary consultation.