A prudent CP can minimize your risk
Tailor the OIG model precisely
By Ernest L. Tsoules Jr., JD
Wayne, PA
The Office of the Inspector General’s (OIG) model compliance plan (CP) for hospitals will probably be very similar to that proposed for laboratories, with specific provisions tailored to hospital issues as opposed to clinical lab issues. The recommended model plan is intended to provide industry guidance and is not a legal requirement. That is, it doesn’t carry the force or effect of a regulation or statute. If you choose not to adopt a CP, nothing will happen unless you or the government discovers a billing error.
From a legal perspective, the CP is valuable in two major areas:
• It minimizes the risk of False Claims Act liability. Under the federal civil False Claims Act, you can be found liable of submitting false claims to the government if you submit them in "reckless disregard of the truth or falsity" of the claim. Generally speaking, once an institution has adopted, implemented, and operated a CP, it becomes hard for the government to prove "reckless disregard."
An example of this occurred recently in the Physicians at Teaching Hospital (PATH) audits. In the first two PATH audits and settlements at the hospitals of the University of Pennsylvania and Thomas Jefferson University, both in Philadelphia the institutions did not have a long-term history of having effective CPs in place when the government initiated their investigation. They may have started the process, but hadn’t operated their plans for several years. Significant billing errors were uncovered as a result of the government audit, resulting in a $30 million settlement for Penn and $12 million settlement for Jefferson.
On the other hand, Dartmouth-Hitchcock Medical Center in Lebanon, NH, had been running a CP for several years when the government came along, and the audit discovered a nearly zero error rate and no liability. Those real-life examples show the value of having a CP in place.
• The likelihood of qui tam litigation diminishes. Qui tam or "whistleblower" litigation involves private actions by former or current employees under the False Claims Act. If your CP includes an effective internal reporting mechanism, the likelihood of a qui tam case decreases.
Tailor your CP to your institution
Your hospital will have a fair amount of flexibility in how its customized plan is structured. By no means should you take the OIG’s model plan and merely add your name. Tailor your hospital plan according to the specifics of your institution; integrate its components with your management structure and risk-management policies. Its effectiveness is in its implementation, not in how it’s written.
A CP need not be limited to reimbursement issues or to fraud and abuse issues in the Medicare-Medicaid context. Most large corporations have CPs that look at Occupational Safety and Health Administration (OSHA), Clinical Laboratory Improvement Act (CLIA), and other regulations. The CP should be adopted as a process that helps ensure an institution’s day-to-day compliance with all aspects of its regulatory life.
It’s generally recommended that an attorney be involved up front for help in structuring a hospital’s CP. Attorneys don’t have to be involved in every step of the process that wouldn’t be cost-effective but they should draft and understand the plans so they can subsequently address questions. The attorney chosen to work on this in your facility should be a health law attorney specifically experienced in fraud and abuse regulatory compliance issues. That professional can provide insight regarding how different institutions have handled CP implementation and operation issues.
If there’s an internal assessment in progress as a result of the CP development process, any audit of billing records by an outside consultant should be done under the auspices of the attorney to protect the results of that audit under the attorney-client privelege. If an institution implements a plan without the involvement of an attorney and does an internal audit, that result is not protected from government discovery. We often recommend that internal audits of claims be done on a "pre-submission" basis so claims are reviewed before they are sent out. If errors are discovered, a false claim has not been submitted.
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