A million-dollar healthcare compliance monitoring mistake 

million-dollar healthcare compliance monitoring mistake

Don’t let processes overwhelm clinical colleagues

Helping our clinical colleagues feel the urgency of compliance monitoring can be a huge challenge. They’re busy seeing patients and doing the best they can to deliver care the best way they know how.  

Sometimes payers have specific requirements for care, though. And the Compliance team simply doesn’t have the clinical expertise to own the monitoring of these requirements. That’s why we work so hard to simplify and streamline regulatory change management: we have to take the busy work out of compliance so that our clinical colleagues can apply their subject matter expertise to compliance, rather than getting overwhelmed with process. 

Let’s now look at a real scenario that I encountered as a Compliance Officer that supports having Clinical leadership perform monitoring, document the monitoring, and report out the results.  

The net of it is this: Our Compliance Department performed a compliance audit related to sleep studies that resulted in a significant payback to the federal government that could have been avoided if monitoring was being performed by the Sleep Center Clinical leadership.  

Million-Dollar Payback 

In June 2019, the Office of the Inspector General (OIG) released findings and recommendations from a review of polysomnography [sleep] studies. The review found providers often did not meet the Medicare billing requirements – a whopping 83 of 200 were in error.

That’s a 41% error rate with an extrapolated overpayment of $269 million.  

The majority of the errors were due to: 

  • Incomplete medical record documentation. The records did not contain face-to-face evaluations, attending physician orders and/or the technician’s report.  
  • Technologist or technician lacked the required credentials or training certifications.  

In response to this report, my Compliance department initiated a statistical sample of sleep study claims to ensure the claims met the required billing rules and regulations. The initial results of the review were very good. The claims submitted had the required documentation to support the claim and the system received payment for the claims submitted.  

All good? Well, not exactly. While preparing for the audit, the compliance auditor researched not only the required billing rules and regulations, she also checked the National Coverage Determinations (NCDs) and Local Coverage Determinations (LCDs). The auditor found an LCD that addressed polysomnography services.  

Armed with the LCD requirements, the auditor re-visited our sample of claims and found that 95% of the claims in the sample did not include the LCD requirements. As a result, the system initiated the required paybacks and we expanded our statistical sample to determine if prior claims failed to meet the LCD requirements.  

The results were similar, and when we extrapolated the error rate to our population, we arrived at a payback in excess of $1 million. We took immediate corrective action to ensure this would not occur in the future. Included in the corrective action plan was the establishment of an NCD/LCD subgroup. The subgroup included Clinical Leadership, Finance, Health Information Management and Compliance. The charge of the subgroup was to ensure the Clinical Departments were aware of NCDs and LCDs affecting their specific area and establishing a process to ensure they received the most up to date NCDs and LCDs.  

Painful LCD Monitoring Lessons Learned: 

This was a painful experience for the organization and the leadership. It definitely taught us some lessons. In the future, we made sure to: 

  1. Ensure that clinical leaders are accountable for knowing the specific billing rules and regulations (including NCDs/LCDs) that impact their area. Much to our surprise the clinical leadership of the Sleep Study department was not aware of NCDs/LCDs. 
  1. Ensure that clinical leadership conducts monitoring and can demonstrate that their monitoring encompasses all billing rules and regulations including NCDs/LCDs. Also, the results of their monitoring should be included in department metrics reported to their leadership and the Compliance department.  
  1. Establish an NCD/LCD subgroup to aid Clinical departments in ensuring they have reviewed all applicable billing rules and regulations. Our subgroup shifted to quarterly meetings that the clinical department leaders actually look forward to attending.  
  1. Conduct compliance audits of high-risk areas identified in the OIG’s Work Plan. The OIG now updates the work plan monthly. I recommend you sign up to receive the updates.  
  1. Review the OIG Office of Audit Services final reports. They provide a wealth of information on findings for high-risk areas and how the OIG conducted their audit. It is a good roadmap to ensure your system targets the highest risk areas so if the OIG comes calling you can demonstrate the action your system has taken to be in compliance.  

Support Clinical Leadership Compliance Responsibilities 

You may run into resistance when you try to bring clinical leadership into an active compliance role.

Remember this: The Compliance, Finance, and Legal departments are not experts on the services that are rendered in a clinical area. Yes, you and these other departments can assist if there are questions about interpreting a regulation.

However, Clinical Leaders must take responsibility for  

  • Keeping current with changes in rules, regulations, and laws appliable to their operational areas 
  • Developing internal controls, policies, and procedures to comply with them 
  • Training their staff on the written guidance  
  • Actively monitoring and verifying the guidance is being followed.  

The best way you can help with this is to provide a scalable, repeatable process that takes the drudgery and busy work out of these responsibilities. From there, you can serve as a sounding board and thought partner, rather than trying to carry the clinical burden of compliance all by yourself. 

Where to Start Advising Clinical Teams 

The next time you’re meeting with a clinical team, ask how they approach monitoring. (Be mindful, they may not be calling it “monitoring.”) If you aren’t regularly meeting with clinical colleagues, I’d suggest finding a way to get closer to them before launching into a monitoring discussion. (Read Ken Zeko’s 12 key metrics for compliance officers looking to move their culture forward for tips on meeting with operational and clinical colleagues.) 

Start small. Choose a Clinical Department and ask the leaders how they receive specific information related to billing requirements. Be sure to include their awareness of NCDs/LCDs. If they ask you what an NCD/LCD is, you know where to start.  

Learn from the OIG. The OIG’s Office of Audit Services reports include the findings of their auditing of high-risk areas, and they provide a good roadmap on their sampling methods. You can use this to lay out your own steps for auditing and monitoring.  

Sampling. The Clinical Department can select a small sample on a random basis. If the sample results reveal a potential issue, expand the sample. In these situations, I would recommend involving your Compliance department. 

Survey to Expand. Consider developing a survey to find out how your clinical colleagues learn what documentation is needed to support a clean claim. This insight can help you determine how diligent your colleagues are about monitoring. 

As you move through this inquiry, you will start to embed yourself as an advisor to your clinical colleagues as they work to ensure clean operations. You can help them stay proactive by reviewing the OIG Work Plan with them regularly. Let them know if they are in a high-risk area as identified by the OIG and offer to help them with process and content to ensure clean claims.  

Your clinical colleagues may feel overwhelmed with this responsibility, especially if they haven’t been accountable for it before. Show them they are not on an island by giving them process support that helps them focus on applying their clinical expertise to compliance. 

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Brian W. Kozik, CHC, CCEP, CHCP is a 25-year veteran of healthcare compliance and an expert in compliance monitoring and auditing. Most recently he served as Chief Compliance Officer at a major health system in Southern Florida. He is the author of The Healthcare Auditor’s Handbook and Ready, Set, Comply!: Compliance Games, Activities, And Tools to Train Your Staff. 

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