It’s no secret that the US healthcare industry is heavily regulated—and those regulations are strictly enforced. Take this recent press release from the Department of Justice (DOJ), for example. It explains how the DOJ charged 601 individuals with fraud—the largest healthcare fraud takedown in history. Among them: 71 physicians charged with falsely billing Medicare, Medicaid, and TRICARE in cases involving the prescription and distribution of narcotics. And in New York, 13 individuals were charged with conspiracy for kickback payments because they were transporting patients to OT and PT.  

In a separate case, a federal court recently convicted the CEO of a physical therapy company for an $18 million healthcare fraud scheme. This press release describes the case against the CEO, which included patient testimony about inadequate care by unlicensed professionals. Patients also testified that their treatment included receiving electric chair massages, playing video games, and walking on a treadmill—and that licensed staff were not nearby to supervise or direct the session. Undercover agents even posed as patients and filmed the clinic—then later showed that video to the jury during the trial. This CEO was sentenced to more than 19 years in prison.

You may be asking yourself, “Did that CEO go into the physical therapy business to cheat and steal?” Perhaps he just got frustrated with low reimbursement rates and slim profit margins and decided to push the boundaries a little. Maybe he started out believing he was running an efficient clinic. Or maybe he thought that he would never end up on the government’s radar, that his patients would never testify against him, and that federal agents would never pretend to be patients in order to collect evidence against him. Hopefully, you are also asking yourself, “How can I prevent a similar situation from happening in my clinic?” If that’s the case, the answer is—drumroll, please—implement an effective compliance program.  

An effective compliance program is a necessity in any healthcare organization, no matter the size of the company. Why? Because it protects your practice, your livelihood, and your patients. Per the Federal Sentencing Guidelines, developing an effective compliance program requires the following seven actions:

Triumph in the Triple-Aim Game: The Healthcare Executive’s Guide to Readmission Reduction, Patient Safety Promotion, and ACO Success - Regular BannerTriumph in the Triple-Aim Game: The Healthcare Executive’s Guide to Readmission Reduction, Patient Safety Promotion, and ACO Success - Small Banner

1. Implement written policies, procedures, and standards of conduct.

Clinics of all sizes should have compliance policies and procedures as well as a code of conduct. The code of conduct is the clinic’s ethical standard—the guardrails for company conduct in all scenarios. When everyone in the clinic—from temps to executives—consistently follows a code of conduct and set of policies, it ensures all staff adhere to the best course of action in any given situation.

Writing these materials takes time, but it doesn’t have to be complicated. This presentation by the Healthcare Compliance Association (HCCA) lays out a process for writing and implementing policies and standards. You can also purchase template policies and a code of conduct, but be sure to customize those templates to your specific clinic. The goal is to have a relevant guide for conduct, not to simply check a box.

2. Designate a compliance officer and form a compliance committee.

If you operate a large clinic, consider hiring a compliance officer who is dedicated to developing and managing your practice’s compliance program. If your clinic is small, an employee can serve in the role as one of his or her duties, and your compliance committee can consist of other employees who meet once a month. This HCCA resource explains how to designate a compliance officer. Your compliance officer does not have to be certified or an attorney, but he or she should understand healthcare compliance. If this person is new to compliance, I’d recommend that he or she join the HCCA and attend an HCCA conference. This is a great way to learn about compliance and develop a professional network.

3. Conduct effective training and education.

As I mentioned previously, the goal of a compliance program is to reduce the risk of healthcare fraud, not to check a box. Training and educating your staff about compliance in general—and your clinic’s compliance program in particular—is one way to ensure that your compliance program is a living, breathing thing that doesn’t exist solely on paper. There are lots of training options:

  • Having the compliance officer train staff over lunch;
  • Requiring employee review and attestation of receipt of the policies and procedures; or
  • Offering online trainings.

You can use paid subscription resources or obtain free resources on the Department of Health and Human Services Office of Inspector General (OIG) website. You can also check out the many free, high-quality training videos from the HCCA and the OIG on YouTube. Training and education does not have to be fancy, exciting, expensive, or time-intensive. It just needs to happen.

4. Develop effective lines of communication.

Your compliance policies and procedures should establish clear paths to reporting compliance concerns. These may include email reporting, in-person reporting, reporting via a physical mailbox, or even calling an anonymous hotline. You should also include an anti-retaliation policy so employees know they will not be scorned or fired for reporting a compliance concern.

5. Perform internal monitoring and auditing.

When you implement your compliance reporting policy, make sure you also have a written process for timely investigation of all reports. If you are a larger clinic, set up a self-audit plan to monitor employee compliance with your policies. This article suggests some ways to proactively audit compliance and mitigate problems. Based on the size of your organization, auditing can be extensive or simple. The key is to always follow up on compliance reports, document your investigation, and take action to fix any problems you identify.  

6. Enforce standards through well-publicized disciplinary guidelines.

Within the policy, it’s important to communicate that you will consistently apply and enforce all requirements for all employees—all the way up to the CEO. Screen new employees with background checks, make sure your employees are not excluded from participating in state or federal programs, and train employees on the compliance policies. Then, train them some more! Read this helpful HCCA presentation for more tips on enforcing standards and sanctions. Nobody likes to sanction employees, but a few bad apples can spoil the whole barrel.  

7. Respond promptly to offenses and take corrective action.

This element relates back to the last two elements. Your proof that your compliance program is a living, breathing, effective program is your ability to detect problems and correct them. Circling back to the CEO scenario mentioned at the beginning of this post, maybe the CEO was not aware that the clinic had become a therapy mill of inadequate care. Perhaps an employee could have reported the problem using established channels; the CEO’s compliance officer could have investigated the matter; and the CEO could have taken prompt action to fix it. The outcome would have been very different had there been even a simple compliance program in place.

The benefits to having an effective compliance program are obvious. Though the topic may seem complex, your program can be effective without becoming complicated. Most importantly, implementing an effective compliance program protects you, your practice, and your patients.  


Want more actionable business insights from rehab therapy industry leaders? I hope you’ll join me and my fellow speakers for Ascend, the ultimate rehab therapy business summit. At this two-day event, you’ll get a year’s worth of insights and ideas to boost your business, improve your bottom line, and excel as a therapy professional. Plus, you’ll have the opportunity to not only meet therapy professionals from around the country to discuss the ins and outs of succeeding in therapy business, but also learn from experts and thought leaders from top organizations. It’s all happening September 28-29 in Phoenix. Register now to grab the best pricing before time runs out.

This blog should not be construed as legal advice. Please consult your attorney or compliance professional for more information.  

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