Compliance efforts to increase in 2012
With government fraud investigations and federal whistleblower cases on the rise, healthcare providers will step up their compliance efforts in 2012 to avoid being the target of scrutiny.
Howard Bogard, compliance expert and partner in Birmingham, Ala.-based law firm Burr & Forman expects to see an increase in RAC audits of healthcare facilities and physicians’ practices as the government continues its efforts to curb overpaying for services.
“Each year the Office of Inspector General seems to be collecting more and more money in settlements and judgments,” said Bogard. “It’s politically popular to go after healthcare fraud and abuse.”
Bogard says this is already having a major impact on healthcare systems acquiring physicians’ practices.
“It is now very common to have a third party confirm that the purchase price is fair market value and the employment compensation is fair market value,” said Bogard.
He says ten years ago this practice was the exception more than the rule, but these days he wouldn’t proceed with an acquisition without it because the risk is too great.
“For the deals I am doing, it’s an essential part of the transaction,” he said. “The CFO, from a compliance perspective, wants the report from the third party. It’s like an insurance policy” against future allegations of kickbacks or improper payment for patient referrals.
Steve McGraw, president and CEO of Alpharetta, Ga.-based compliance firm Compliance 360, agrees that there will likely be a surge in the volume and complexity of audits and in the threat from bounty hunters.
“Personal greed has long been the primary motivator behind fraud and abuse,” said McGraw. “Regulators and private payers are increasingly using greed via a variety of rewards to help identify and prosecute offenders.”
McGraw also expects to see hospital boards becoming increasingly accountable.
“Compliance is now being seen as a strategic risk area,” said McGraw.
“Traditionally, the primary expertise sought for hospital boards is a finance or clinical background,” he added. “Many hospital boards are now expanding their sought-after expertise to include compliance as a competency.”
Another area of focus in 2012 will be patient information collection and storage, said Rita Bowen, senior vice president of health information management and privacy officer at compliance firm HealthPort.
“When the privacy regulations are finalized, this will result in a new focus on breach compliance,” said Bowen.
“Hospitals need to understand their workflows and get a handle on their data, where it flows and where it is stored,” agreed Steven Emery, HealthPort’s director of product management. “Know where the data is and make sure it is secure, even if a laptop, a desktop PC or a hard drive is stolen."
“The upcoming several years are going to be like the Wild West with thousands of systems implemented and hundreds of thousands of new uses and users,” continued Emery. “While the automation promises efficiencies…it also increases risk.”
