Blog Post

Creating a Compliance Plan for Your Practice

Tom Ambury explains why your PT practice needs a compliance plan and how to create one. Click here to learn more and how to create a compliance plan, here.

Tom Ambury
5 min read
July 17, 2014
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Today, we will "chat" about the system of checks and balances your practice should have in place to ensure you follow compliance regulation requirements—in other words, your compliance plan.

I know, at least lately, it seems the regulatory requirements to participate in health care have been sharply increasing. At PT Compliance Group, we have been focusing on the federal level, but state regulations and private insurance requirements also are changing. Below, I’ve addressed some of the questions I commonly hear regarding compliance plans.

With these regulations in mind, what are PTs required to do?

Our obligation as PTs is to make a "reasonable" effort to comply with laws and regulations at every level.

What does "reasonable" mean?

Well, in this context, "reasonable" doesn’t carry the same meaning it does in everyday speech. Rather, it’s a legal term that means you are required to perform due diligence to identify and comply with the laws and regulations that cover your practice. It means you have to do what would be reasonable for someone in a similar situation, and you must be able to prove that you have done so.

What is a compliance plan?

Simply put, a compliance plan is a system of checks and balances through which a reasonable effort is made to identify potential non-compliance issues regarding applicable laws and regulations, and to eliminate or mitigate those issues. Basically: find it, fix it, and follow it to make sure the issue is fixed.

What makes up a compliance plan?

Office of Inspector General (OIG) guidance for compliance plans presents seven essential elements for an effective compliance plan—regardless of the size of the organization. To be “effective,” the plan must include mechanisms for successfully identifying and correcting compliance issues. The seven essential elements of a compliance program are:

  1. Leader: Any successful program must have someone in charge of it. This person does not have to be the owner of the practice, but he or she should have access to the person who has the ability to effect change within the organization. The owner, or the person or persons in charge of the practice, provide the leader with the resources necessary to perform the functions of the compliance leader (e.g., time, education, and budget).
  2. Standards, Policies, and Procedures: Establishing standards allows you to measure how you’re doing. Policies and procedures educate employees on what the standards are and what they must do to meet those standards. For example: In 2010, Daniel Levinson, the Inspector General of the United States, stated that healthcare providers have a responsibility to have in place a system of checks and balances to identify and correct billing errors before submitting claims for payment. If that is the standard, a system must be put in place to meet that standard.
  3. Communication: How is your compliance policy communicated throughout your organization? When a healthcare provider is under investigation, the investigating agency tries to establish the provider's "culture of compliance." This means that the provider’s employees need to be able to describe the provider's compliance plan and compliance efforts.
  4. Training: This is an effective compliance plan’s first line of defense. Training everyone within an organization on compliance standards, policies, and procedures—and the protocol for reporting compliance-related concerns—helps to establish the culture of compliance. Furthermore, training is required upon hire—and yearly thereafter—on topics such as HIPAA, charges and billing, occupational safety and health, documentation requirements, and your compliance plan. The OIG recommends three hours of training per year for each employee.
  5. Auditing and Monitoring: Where training is the first line of defense, auditing and monitoring are the backbone of an effective compliance plan. Why? Because how do you know if you’re complying with the established standards if you’re not checking? For example, if the standard is to prevent billing errors before claims are submitted for payment, how do you know you’re complying with that standard if you don't check? Electronic documentation systems (EDS) help, but I still find billing errors in practices that use EDS. All such systems require human input, and all humans make mistakes.
  6. Disciplinary Policy: Your disciplinary policy should make it clear that waste, fraud, and abuse—as well as failure to report waste, fraud, and abuse—will not be tolerated. Furthermore, you should make it known that violations of this standard could be subject to immediate termination.
  7. Process for Investigating Potential Compliance Issues: Identifying an issue worthy of investigation is an indication of the effectiveness of your compliance program. Investigate the issue, develop an action plan to address the issue, and follow up to make sure the action plan worked.

Are compliance plans required?

Some states have taken the step of mandating compliance plans for healthcare providers. If you are practicing in one of these states, you probably already have a compliance plan. Similarly, some private insurance carriers have started requiring that physical therapy providers in private practice demonstrate what their practices are doing to ensure compliance as a condition of being (re)credentialed for that particular insurance. At the federal level, the Patient Protection and Affordable Care Act (PPACA) empowers the OIG to mandate compliance plans for healthcare providers who participate in federally-funded insurance programs. And as regulatory control of healthcare continues to tighten, I believe that is exactly what will happen.

So, what to do?

In short, comply or die. Normally, I’m not a negative person, but I can see the writing on the wall. Practices that are able to demonstrate making a "reasonable" effort to comply with the laws and regulations will be successful at participating with insurance providers.

So, after all that, my take-home point is this: Develop a compliance plan that meets the OIG guidance on the seven essential elements of an effective compliance plan.


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