Healthcare Reform, Your Compliance Program and RAC

By now you probably are familiar with recently enacted provisions of the new Patient Affordable Care Act (PACA), which includes several changes to the federal False Claims Act and Anti-Kickback Statute, plus alterations of other requirements associated with timely repayments of overpayments. All of this probably will impact every compliance program, including your RAC efforts;  a couple of highlights are as follows.

• The ability to bring a Qui Tam (whistleblower) case against a healthcare provider is now easier. There are many details of the new provision that are not germane to this article, but the bottom line is that healthcare providers should brace for the potential of experiencing more whistleblower cases.

• In most situations, it is now a requirement to report and return overpayments within 60 days after they are identified. As with many provisions, there is legalese to interpret and debate, but the bottom line is that if you have overpayments, you need to act to return them within 60 days or face the threat of being delinquent in the eyes of the government - which could subject your organization to false-claims liability. The False Claims Act provides for draconian fines and penalties.

• About $350 million in new funding has been budgeted to fight fraud and abuse during the next 10 years, which indicates that these recently enacted provisions to address such issues most likely will be used very aggressively.

How to Prepare for RACs Expansion

If that were not enough to get our attention, we also now know that the U.S. Department of Health and Human Services has enhanced the recovery of overpayments via the expansion of the RACs to Medicaid, Medicare Advantage and Part D. Thus, if you thought RACs were going away, they are not!

Given this threat, what should all healthcare providers be doing to prepare?

If you are one of those many providers who have embraced compliance and adopted a forward-thinking, independent, transparent and robust compliance program, your efforts probably have placed you in a good position to deal with these enhanced regulatory threats.

If, on the other hand, your organization has not embraced compliance as a culture, returned overpayments routinely, or corrected potential problems- or if it has buried the program in another area of the hospital, reduced its budget, or failed to grow a learned board - you might want to consider it a good time to revisit implementing a robust compliance program with appropriate leadership.

The changes now in place due to the PACA are significant. Here are a couple of ways to evaluate/analyze your compliance program immediately:

• For years, creative people were able to argue subjectivity issues surrounding when and if returning overpayments was absolutely necessary. That subjectivity no longer exists, being as the strict 60-day deadline to make your repayments is as objective as it gets. Do you have any pending overpayments that have not been repaid? Who is responsible for making these repayments? How quickly can these repayments be made? If you are not doing this promptly enough, what culture barriers exist, and which individuals are making relevant decisions? Does your board know that you are not making these repayments?

• Who is leading your compliance program? There are many schools of thought regarding this question, and my advice is to remember that being the compliance officer is not an easy or popular job. You need someone who is knowledgeable about healthcare operations, can be independent from management and is capable of questioning issues. My observation, having been in the industry for 13 years, is that some organizations tend to try to hire a person that will not challenge management like the chief financial officer, hospital counsel, CEO or board. If you don't have a strong, independent and knowledgeable compliance officer who is able to say "no" or question certain behaviors and/or actions, your organization is more at risk today than ever. Now is the time to have an experienced and knowledgeable compliance officer as an independent member of your management team!

• How knowledgeable is your board about the recent changes implemented via the PACA? Many of these provisions were signed into law on March 23. If your board and compliance committee have not been notified of and educated about these changes and their impact to your organization, your board is not engaged enough in compliance activities - and this needs to be fixed soon.

The RACs' efforts continue to expand around the country. With these new initiatives the importance of making sure your documentation, billing and coding is accurate is more important than ever.

All efforts to prepare and make sure your payments are precise will be time and effort well spent.

Bret Bissey blogs regularly at RACMonitor.com.