Having a Strong Compliance Program Protects the Patient and Provider

January 22, 2020

Having a Strong Compliance Program Protects the Patient and Provider

The regulatory landscape for any health care organization has been changing over the past several years, and it would not be a stretch to say the environment has been turbulent. For many health systems that practice value-based care, change may feel rapid and unmanageable. An effective compliance program can help manage change, offer assurances your organization is providing safeguards to keep patient wellbeing paramount, and defend against fraud, waste, and abuse. 

The federal government has provided guidance on how to structure effective compliance programs rooted in the seven elements of an effective compliance program. Several programs require compliance programs as a condition of participation. Some programs, like the Direct Contracting Model require an experienced dedicated compliance official with minimum qualifications, such as a minimum of 2 years compliance experience, who is not legal counsel to the organization, and who reports directly to the organization’s governing body.

An effective compliance program can help manage change, offer assurances your organization is providing safeguards to keep patient wellbeing paramount, and defend against fraud, waste, and abuse. 

A healthy compliance program will not be able to stop all fraud and abuse. However, as articulated by CMS, “compliance programs increase the likelihood of identifying and preventing unlawful and unethical conduct; provide a centralized source for distributing information on health care statutes, regulations, and other program directives related to fraud and abuse; and create an environment that encourages employees and others to anonymously report potential problems, among other benefits.”

As such, a compliance plan guides the organization in the right direction and is necessary to ensure the ACO is taking action regarding suspected fraud and abuse.

Cherry Picking and Lemon Dropping

In risk-based arrangements, there are concerns that a health system may be incentivized to “cherry pick” ideal populations or “lemon drop” unwanted patients. This behavior would avoid “at-risk beneficiaries” in an effort to maximize revenues - or circumvent high cost patients - with low likelihood of ability to control the cost of care. 

Studies suggest this practice is unlikely at the provider level. For example, a recent study found that value based initiatives had no effect or made practices less likely to dismiss patients. However, the risk (perceived or actual), of increasing financial incentives and penalties for poor performance can persist, and be enabled with sophisticated data analysis tools.

A healthy compliance program provides potential mechanisms at both the provider level and the system level to detect or prevent inappropriate patient referrals. For patient outreach on the system level, monitoring programs are critical for detecting avoidance of populations of patients based on a suspect characteristic such as a disability, socioeconomic status, or mental and/or substance abuse conditions.

A compliance program is a healthy mechanism to protect our beneficiaries and preserve the integrity of the health care system.  

Compliance Programs offer a variety of tools to protect against inappropriate referral or patient termination activities. For example, a staff member who has received compliance training about proper beneficiary protections may report to the Compliance Official by way of the organizations anonymous hotline. Similarly, a monitoring and auditing program implemented by the compliance office, in partnership with the organizations’ data analytics team, may detect aberrant referral patterns and implement a corrective action or monitoring program to prevent further occurrence.

The Benefit of a Robust Compliance Program

In an environment with new financial models and advanced technologies to identify populations ripe for intervention or perhaps risky to a value based engagement, a compliance program is a healthy mechanism to protect our beneficiaries and preserve the integrity of the health care system. As the industry continues to develop, health systems must lean on their compliance programs as a resource to safeguard against inappropriate behaviors and unintended actual or perceived perverse incentives that arise from risk-based engagements. Healthy compliance programs are built on good internal communication to accurately survey risk and resource needs, and organizational goal alignment. 

If you are a leader in a value-based program and curious about the compliance posture of your ACO or value-based care program, a good place to start would be to contact your Compliance Officer and ensure they are engaging with your organization’s ACO or value-based activities.

For Compliance Officers, make certain you are identifying value-based updates into your annual work plan development and/or compliance program risk assessment. This is critical to keeping the compliance program aligned to the regulatory and payer-program changes impacting your organization.

About the Author

Michael Berwanger, JD
Chief Compliance & Legal Officer