Government Health Care Budgets Include Increased Funding to Fight Fraud

Mandatory funding to fight health care fraud in the administration’s 2015 budget proposal is evidence that it remains a top priority among government agencies going forward, and compliance officers should understand that they are a focal point in defending their organizations as a result. In contrast, the federal budget for 2015 proposes cuts of $7.9 billion for the lab industry over the next 10 years. These kinds of budget cuts and the resulting belt tightening that will inevitably occur in all laboratories and hospitals create real challenges for laboratory compliance officers in many ways, including the risks associated with increased competition in the marketplace to grow business and increase revenues for the laboratory. The laboratory market is not likely to expand through the addition of new physicians and hospitals, so the primary way to grow the business is by taking business away from other laboratories. These kinds of activities generate big compliance risks and can lead to sales and marketing departments taking compliance risks they may not usually take. In other areas, such as billing and coding of services, it can be tempting to increase revenue by taking risks through upcoding or creative applications of billing and coding that may normally be considered too risky for an organization. Areas of Government Focus Understanding where the government will focus its compliance efforts informs the compliance officer where they should focus their compliance efforts. Reducing improper payments is a top priority for government agencies, and new initiatives based on data mining techniques and predictive modeling through innovative computer technology are the vehicles the government believes will get the results they need to generate savings for the Medicare and Medicaid programs. According to budget documents, investments in program integrity efforts will yield $13.5 billion in gross savings. The government proposes to increase funding for the Health Care Fraud and Abuse Control (HCFAC) and Medicaid Integrity programs by $438 million. The budget proposal says that all new HCFAC funding be mandatory starting in 2016 in addition to the base discretionary funding. Fraud prevention through the Fraud Prevention System, which focuses on reducing improper payment by preventing them from being made in the first place, will also be a priority. New funding for the Health and Human Services Office of Inspector General will be used to support the activities of the Health Care Fraud Prevention and Enforcement Action Team among other initiatives. The budget also proposes $100 million for the Office of Medicare Hearings and Appeals, an increase of $18 million over 2014, in an attempt to address the critical backlog of appeals cases. Part of the money is intended to ensure the quality and accuracy of decisions in appeals cases, which often set precedents for future claims filing decisions and can influence new regulations or shed light on other kinds of fraud. Another area of focus is the Medicaid program. CMS supports state fraud prevention efforts through providing technical assistance with reviews and audits, identification of overpayments, educational activities, and timely access to claims data and encounter information. Laboratory Compliance Officers Must Respond Identifying risks for their laboratories and devising cost-effective ways to address those risks and prevent improper payments is where laboratory compliance officers earn their compensation. During times of fiscal restraint it is more important than ever for compliance officers to find ways to accomplish their tasks with the resources at hand. One of the more critical areas for compliance effectiveness is the ability of the compliance officer to maintain current knowledge of laws and regulations and government areas of focus for their segment of the industry. It is important that limited resources are directed at the correct risk areas and time and resources are not spent on lower-risk areas that are not likely to be an issue. Consider the impact of overlooking or missing a compliance issue that results in the laboratory having to spend resources investigating and then refunding potential overpayments in the thousands or millions of dollars. Effective Auditing, Monitoring Program Is Best Defense Effective auditing and monitoring is the best way to identify areas that pose the greatest risk to the laboratory and to prevent potential compliance disasters. Finding the time and resources to operate an effective auditing program is the challenge for the compliance officer. The only way to really be effective is to tear a page out of the government’s book and employ innovative technology and computer skills to the auditing and monitoring program. It may be time to add an information technology expert to the compliance team to facilitate the review and auditing processes. Compliance officers can increase their auditing effectiveness many fold through the effective use of technology and data mining techniques. Educating the Executives The phrase “compliance responsibility and commitment must start at the upper most levels of management if the compliance program is going to be truly effective” cannot be repeated enough. Compliance officers must make certain that those responsible for the laboratory understand their role in making the compliance program effective. That role includes demonstrating their commitment to compliance and providing a role model for all employees to follow. They cannot be effective role models unless they are educated in compliance. Seeing to their education and constant awareness of the importance of compliance is one of the compliance officers’ most important tasks. Included in that task is a responsibility compliance officers must impose on themselves to be real compliance experts that the management team can rely on to be good stewards of the resources given to operate the program. Compliance Must Support Vision, Goals of Lab Compliance officers must support the overall goals and vision of the laboratory by finding ways to make certain that the goals can be accomplished without violating laws, regulations, or company policy and without compromising ethics. This requires the compliance officer to always think in terms of what can be done and how it can be done as opposed to what cannot be done. Takeaway: In times of fiscal restrictions and budget issues, compliance officers must find ways to accomplish their tasks and responsibilities of protecting the laboratory from compliance disasters while operating within the budget restraints imposed on the laboratory by outside forces.