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Released September 25, 2000

Inspector General Issues Voluntary Compliance
Program Guidance for Physician Practices

The Department of Health and Human Services’ Office of Inspector General ("OIG") today issued final guidance to help physicians in individual and small group practices design voluntary compliance programs.

"The intent of the guidance is to provide a roadmap to develop a voluntary compliance program that best fits the needs of that individual practice. The guidance itself provides great flexibility as to how a physician practice could implement compliance efforts in a manner that fits with the practice’s existing operations and resources," Inspector General June Gibbs Brown said.

The final guidance – Compliance Program Guidance for Individual and Small Group Physician Practices – is scheduled for publication this week as a Federal Register notice and is being posted today on the OIG web site.

Inspector General Brown further commented, "We are encouraging physician practices to adopt the active application of compliance principles in their practice, rather than implement rigid, costly formal procedures. Our goal in issuing this final guidance was to show physician practices that compliance can become a part of the practice culture without the practice having to expend substantial monetary or time resources."

The OIG believes the great majority of physicians are honest and committed to providing high quality medical care to Medicare beneficiaries.

Under the law, physicians are not subject to civil, administrative or criminal penalties for innocent errors, or even negligence. The Government’s primary enforcement tool, the civil False Claims Act, covers only offenses that are committed with actual knowledge of the falsity of the claim, reckless disregard or deliberate ignorance of the truth or falsity of a claim. The False Claims Act does not cover mistakes, errors or negligence. The OIG is very mindful of the difference between innocent errors ("erroneous claims") and reckless or intentional conduct ("fraudulent claims").

A voluntary compliance program can help physicians identify both erroneous and fraudulent claims and help ensure that submitted claims are true and accurate. It can also help the practice by speeding up and optimizing proper payment of claims, minimizing billing mistakes and avoiding conflicts with the self-referral and anti-kickback statutes.

Unlike other guidance previously issued by the OIG, the final physician guidance does not suggest that physician practices implement all seven standard components of a full scale compliance program. While the seven components provide a solid basis upon which a physician practice can create a compliance program, the OIG acknowledges that full implementation of all components may not be feasible for smaller physician practices. Instead, the guidance emphasizes a step by step approach for those practices to follow in developing and implementing a voluntary compliance program. As a first step, physician practices can begin by identifying risk areas which, based on a practice’s specific history with billing problems and other compliance issues, might benefit from close scrutiny and corrective/educational measures.

The step by step approach is as follows: 1.) conducting internal monitoring and auditing through the performance of periodic audits; 2.) implementing compliance and practice standards through the development of written standards and procedures; 3.) designating a compliance officer or contact(s) to monitor compliance efforts and enforce practice standards; 4.) conducting appropriate training and education on practice standards and procedures; 5.) responding appropriately to detected violations through the investigation of allegations and the disclosure of incidents to appropriate Government entities; 6.) developing open lines of communication, such as discussions at staff meetings regarding erroneous or fraudulent conduct issues and community bulletin boards, to keep practice employees updated regarding compliance activities; and 7.) enforcing disciplinary standards through well-publicized guidelines.

The final guidance identifies four specific compliance risk areas for physicians: 1.) proper coding and billing; 2.) ensuring that services are reasonable and necessary; 3.) proper documentation; and 4.) avoiding improper inducements, kickbacks and self-referrals. These risk areas reflect areas in which the OIG has focused its investigations and audits related to physician practices.

Recognizing the financial and staffing resource constraints faced by physician practices, the final guidance stresses flexibility in the manner a practice implements voluntary compliance measures. The OIG encourages physician practices to participate in the compliance programs of other providers, such as hospitals or other settings in which the physicians practice. A physician practice’s participation in such compliance programs could be a way, at least partly, to augment the practice’s own compliance efforts.

The final guidance also provides direction to larger practices in developing compliance programs by recommending that they use both the physician guidance and previously issued guidance, such as the Third-Party Medical Billing Company Compliance Program Guidance or the Clinical Laboratory Compliance Program Guidance, to create a compliance program that meets the needs of the larger practice.

The final guidance includes several appendices outlining additional risk areas about which various physicians expressed interest, as well as information about criminal, civil and administrative statutes related to the Federal health care programs. There is also information about the OIG’s provider self-disclosure protocol and Internet resources that may be useful to physician practices.

The final physician guidance is available on the Office of Inspector General web site at http://www.oig.hhs.gov

If you need additional help, please call OIG Public Affairs at 202-619-1343.

Important Compliance Web Sites

Name	Address
Office of Inspector General (OIG)	www.oig.hhs.gov/
OIG Electronic Reading Room	www.epa.gov/oig/eroom/htm
OIG Cumulative Sanction Report	www.exclusions.oig.hhs.gov/search.aspx
Federal Register	www.gpoaccess.gov/fr/index.html
CMS	www.cms.hhs.gov
CMS Training	www.cms.hhs.gov/mlnmattersarticles/
AdminaStar Federal	http://www.adminastar.com/Providers/Providers.html
Columbia HCA	www.columbia-hca.com
American Health Lawyers Assoc.	www.healthlawyers.org
Indiana Administrative Code	www.state.in.us/legislative/iac
Indiana Code	www.state.in.us/legislative/ic/code
Subscription Services	Address
Decision Health	www.decisionhealth.com
CCH Internet Research Network	http://hr.cch.com
IHS Health Information	www.ihshealth.com

1. American Health Lawyers Association has several listservers.  You can find them on their web site at www.healthlawyers.org.  Click on listservers on the right hand side.  The listserver I use and would recommend is Compliance.  To subscribe, send an e-mail to commands@healthlawyers.org, simply type Subscribe Compliance in the message section of your e-mail.

2. OIG has a News Release Mailing List.  To subscribe, go to their newsroom web site at www.oig.hhs.gov/mailinglist.html , click on OIG News.  At the top it will say "Subscribe or Unsubscribe to the OIG News Release Mailing List.