Evaluate, increase your lab’s compliance budget

The Health Care Compliance Association’s (HCCA’s) compliance officer and staff compensation survey sheds light on how your colleagues are faring from a salary standpoint (See G2 Compliance Advisor, November 2015). However, it doesn’t address whether the compliance officers surveyed believed that their budgets for those salaries and other resources were sufficient or how to ask for more money to carry out their duties.

The survey, released Nov. 9, 2015 found that the typical compliance budget was $220,000 annually. However, two-thirds of the compliance officers/departments had an annual budget of less than $500,000. Fully a third of respondents (34 percent), the largest percentage represented, had an annual compliance budget of less than $100,000. The survey also found that more than half of the compliance officers handle at least 76 percent of the organization’s legal and regulatory risk, and 57 percent of them had been in their job for at least six years. The survey did not indicate whether or how the size of the health care organization correlated with the compliance budget it had to work with.

What’s particularly striking is how the findings in the compensation survey dovetail with those in HCCA’s most recent report on compliance officers and stress. That survey, released in 2012, found that compliance professionals operate under so much job-related stress that more than half often lost sleep from job-related worry, which the survey called "unhealthy" and HCCA chief executive officer Roy Snell deemed "unacceptable."

The stress survey also found that while the causes of the stress were widespread, inadequate budgets deserved much of the blame. Almost three-quarters of respondents (73 percent) reported that their budgets were not enough for them to do their jobs.

At the same time, compliance work and recognition of its importance are both increasing. HCCA’s membership is growing about 15 percent a year, conference attendance is up, and the number of people getting certified in compliance is rising, says Snell.

First do your homework
So how does the compliance officer determine what his or her compliance budget for staff and resources should be? And how does one make that pitch to the board of directors or owners of the lab?

The first step is evaluating where the lab is compliant and what areas are in need of improvement, says David Zetter, president of Zetter Healthcare Management Consultants in Mechanicsburg, Pa. and a member of the National Society of Certified Healthcare Business Consultants (NSCHBC) who regularly advises labs on compliance issues. "Do an assessment," he suggests.

Then you need to prioritize what areas of compliance are riskier if not in compliance, since regardless of your budget you may not be able to cover everything. "Determine which laws you most want and need to be in compliance with," Zetter says. This will vary somewhat from lab to lab, says Snell.

For example, if your lab has gone through a number of billing audits and is regularly repaying overpayments, you may want to focus your compliance efforts and resources on dealing with this issue. Not only would the lab be on the government’s radar, but the Centers for Medicare and Medicaid Services (CMS) has begun to enforce the Affordable Care Act’s requirement that overpayments be returned within 60 days of being identified. That deadline is likely not being met in this situation.

CMS has also begun to crack down on providers with practices or patterns of billing noncompliance by revoking their enrollment in the federal health care programs, another power granted to CMS courtesy of the Affordable Care Act.

"If you know you have a compliance issue and ignore it, you get into more trouble. It’s thumbing the government in the face," says Zetter.

Then do some homework about the costs of compliance, see where you’re currently spending money, and whether it’s money being well spent. "Generally speaking, I would spend most of my time looking for, finding and fixing problems rather than writing and rewriting policies and reports, meeting and talking," suggests Snell.

For instance, providers are supposed to check to see if employees and others they do business with are on the Department of Health and Human Services’ Office of Inspector General’s lists of exclusion from participating in the Medicare and Medicaid programs. For some labs, it may be cheaper and just as effective to conduct that check in-house; for others, it would be better to outsource that obligation.

Discussion with C-suite is key
Once you have a good grasp of what your budgetary needs are, go to the decision makers to pitch for those resources.

"You need to make your case [for a bigger budget]. Address the risk of noncompliance and give [the decision makers] a plan to mitigate the risks," says Zetter. Include in your presentation the increased number of state and federal laws that involve compliance, because they create more obligations on compliance personnel. "Those who [are working] in compliance are having to spend more [to be compliant]," he adds.

If the board/owners push back on cost, offer different alternatives. For instance, if they balk at more money for compliance training, see if you can find a cheaper option, such as training via the internet rather than in-person, suggests Zetter.

You can also use the HCCA compensation survey to foster discussions about your budget and resources, says Zetter. "But don’t just give them the report. You need to also offer specific solutions [to your budget issues]," he says.

It may also help to get the chief executive officer of the lab or other decisionmaker to attend a large compliance conference, suggests Snell. "There is nothing like seeing what best practices are to answer the question, ‘is our budget adequate?’ It’s very hard to sell something to someone who has never seen what you are trying to sell. So if you can get someone in the group to see what others are doing and tell the rest, peer to peer, I think it will be easier," he explains.

Additional tips to help increase, maximize that budget
There are also several steps that compliance personnel can take internally to make better use of their budgets and resources:

  • Use available tools to stretch your budget dollars. For instance, use Office of Inspector General alerts, guidance from HHS’ Office for Civil Rights for HIPAA education, and other free, publicly available information to communicate issues with others in your facility and educate the workforce. Consider hiring outside help only when needed for audits or other specific functions, says Zetter.
  • Document your activities. For instance, if you’ve handled a compliance problem, document what you did to resolve it so you can provide evidence of the amount of work being performed. Justify the worthiness of what you and your department are doing. At the very least, this will help if the board of directors/owners or financial head is thinking of reducing the compliance budget.
  • Enlist others in your facility or organization. "I would like to see compliance officers use their budget wisely and then leverage everyone else in the organization to get more done. Get help from HR, legal, risk, audit or any other department to make sure all the elements of a compliance program are as robust as possible. … Let leadership do what they can and then go get help from others until your program is effective," says Snell.

Takeaway: Compliance professionals need to review whether they have adequate funds to handle their compliance workloads. If not, they need to speak up and ask for more financial support.

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