Most of today’s laboratories and diagnostic providers are running on even slimmer profit margins. This is due in great part to lower reimbursements resulting from the Protecting Access to Medicare Act (PAMA) clinical laboratory fee schedule (CLFS) that came into effect in early 2018. In this environment there can sometimes be a tug-of-war between doing things “by the book” and taking some compliance risks, especially if we see our competitors “pushing the envelope”. It can be tempting to turn a blind eye, or even establish policies believed to maximize short-term financial performance. While tempting though, these shortcuts can lead to significant, long-term ramifications on your business.
We’ve all seen the articles. Whether an executive team is well-meaning but sloppy, or outright trying to manipulate the system, laboratories and other diagnostic providers are disproportionately scrutinized when it comes to compliance. And it’s not just toxicology labs and pain management organizations who are put under the microscope. Routine payor audits may not only be for issues like medical necessity or E&I, but increasingly question your billing practices. This could be your undoing if you have bent the rules in the name of staying competitive. There is also a very strong qui tam, or whistleblower, environment. It can be that very competitor, a disgruntled current or ex-employee, or even an angry patient who tries to direct that microscope in your direction. The incentives for them are great!
Mis-steps (whether intentional or not) carry reputational risks as well as the risk of substantial fines and even criminal prosecution in the extreme. Compliance issues can be especially problematic if you are looking for investors or considering selling your firm and are an integral part of any due diligence process. Frankly, taking shortcuts to boost near-term revenue, or having a history of audits, complaints or negative press (whether legitimate or not) is unacceptable to any investor or buyer. It’s just not worth it.
Ensuring that regulatory and legal billing practices are consistently followed is paramount. This means removing policies that are hard-coded into your systems and may no longer be compliant, as well as identifying and eliminating any errors in mandatory reporting. It is also imperative for you, and your systems, to be continually updated on the most current rules. And don’t forget reviewing your requisitions and customer relationships to make sure they are in line with the most up to date policies.
How Do You Help Your Organization Stay Compliant?
Now that I’ve reinforced that it’s really not worth getting caught with your hand in the cookie jar, how do you help keep the rest of your team steering clear of any compliance trouble?
Have a documented compliance policy and program. This is not a situation where you can just write a policy and file it away. It needs to be a living document.Train your team. Have a Chief Compliance Officer responsible for the policy, the program, and the training.Make compliance part of your culture.Revisit your policy and program regularly. Make adjustments based on market or regulatory changes.Encourage people to speak up and ask questions without fear of retaliation.Use technology to support your compliance efforts. For example, your revenue cycle management (RCM) system can be programmed to prevent compliance breaches. It can also provide documentation and reporting to support an audit. Insist on comprehensive record keeping. It’s not unusual for audit and recoupment requests to go back 3 or 4 years. Just because you got that payment from an insurer, doesn’t mean you will be allowed to permanently keep it! Once an issue is uncovered, there’s going to be further digging. And if your Medicare billing rights are put on hold during an investigation, there can be devastating financial results.
DOCUMENT, DOCUMENT, DOCUMENT!!!
Let’s face it, the burden is on you to prove your innocence if questioned by a payor or a government agency. Rather than getting caught up in a case that could literally take years to resolve and drain your lab’s vital resources, earn and maintain a proven track record on compliance.