WMO Atlanta Law

Office of Inspector General's Compliance Program Guidance for Hospitals Is Finally Released

Nearly a full year after the Office of the Inspector General of the United States Department of Health and Human Services ("HHS OIG") released an open letter to health care providers stressing the OIG's renewed focus on eliminating fraud and abuse in the health care arena, the OIG has released its long-promised Compliance Program Guidance for Hospitals (the "Hospital Guidance").

Unlike OIG's Model Compliance Program for Clinical Laboratories, the Compliance Program Guidance for Hospitals readily admits that it is not in itself a compliance program. Rather, it is a set of guidelines for a hospital interested in implementing a compliance program to consider. While the Model Compliance Program for Clinical Laboratories contains eleven basic elements to an effective compliance policy, the Hospital Guidance combines some elements to reduce the total number to seven. They are as follows:

1. Written standards of conduct, as well as written policies and procedures that promote the hospital's commitment to compliance;

2. Designation of a chief compliance officer;

3. Education and training programs for all employees;

4. Maintenance of a process, such as a hotline, to receive compliants;

5. Development of a system to respond to allegations of improper/illegal activities and the enforcement of appropriate disciplinary action;

6. Audits to monitor compliance;

7. Investigation and remediation of identified problems and development of policies addressing the non-employment or retention of sanctioned individuals.

The Hospital Guidance relates the general notion of corporate compliance to specific areas of risk in a hospital. Many of the risk areas identified by the OIG relate to the technical requirements associated with documentation and coding required for reimbursement under Medicare. The Hospital Guidance recognizes that extensive training of employees involved in billing and coding should be required to prevent errors from occurring. It also observes that "[a]ccurate coding and billing by the hospital depends on the quality and completeness of the physician's documentation. Therefore, the OIG believes that active staff physician participation in educational programs focusing on coding and documentation should be emphasized by the hospital." Such training would include non-employed physicians with active staff privileges.

A number of technical points suggested by the OIG in the Hospital Guidance may be objectionable to hospitals for legal or other reasons. For example, the OIG suggests that the compliance officer should not be subordinate to the general counsel or the chief financial officer, which may not be possible in smaller organizations or advisable for organizations with an in-house counsel due to possibility of retaining the attorney-client privilege over compliance communications. On the whole, the Hospital Guidance should be helpful to hospitals in designing, modifying and/or implementing their compliance programs.

The Hospital Guidance covers a wide variety of compliance issues; attempting to deal with all of the issues at once can lead to paralysis over the actual adoption of a written compliance program. The Hospital Guidance recognizes that "full implementation of all elements will not be immediately feasible for all hospitals. However, as a first step, a good faith and meaningful commitment on the part of hospital administration, especially the governing body and the CEO, will substantially contribute to a program's successful implementation."

I strongly recommend that all hospital administrations quickly customize and adopt a simple written compliance program, such as the Model Hospital Compliance Program on this Web site, as such a first step. Details can be added and modifications made over time as the compliance issues are worked through by the appropriate officials in the organizations.

Click here to take a quiz to find out if your health care organization has an effective compliance program in place.

NOTE: This site does not, and does not intend to, give legal advice. The forms made available on this Web site are for example purposes only. The information on this site is not guaranteed to be complete or up-to-date. This web site is not intended to create an attorney-client relationship between you and Withrow, McQuade & Olsen, LLP and you should not act or rely on any information on this site without seeking the advice of a competent attorney.