“eliminating high risk laboratory issues" ©2000 chi laboratory systems, inc. larry small,...

“Eliminating High Risk Laboratory Issues"

©2000 Chi Laboratory Systems, Inc.

Larry Small, M.S., MT(ASCP)Director of Compliance and Billing Services

Chi Laboratory Systems, Inc.(800) 860-5454

[email protected]

HCCA Compliance Institute September 24 - 27, 2000

Paul W. Stiffler, Ph.D., D(ABMMM), F(AAM)Laboratory Consultant

La Grange Memorial Hospital(847) 722-4811

[email protected]

-2- © 2000 Chi Laboratory Systems, Inc.Graphics/Compliance/Presentations/Florida Coalition/2000-01-19 Florida Coalition Presentation.ppt

IntroductionIntroduction Institute of Medicine (IOM) (Washington, D.C., May 5, 2000 )

Committee on Medicare Payment Methodology for Clinical Laboratory Services - Panel members hired to study:

– laboratory industry and technology trends– lab costs and payments

Cited reasons for the lab's declining reimbursement:

Lab industry reaction to OIG enforcement activities The implementation of Medicare's medical necessity rules Increasing regulatory costs “Mind-boggling.” claims denial rates

David Smalley, MD and Rodney Forsman urged the panel to remember that: “laboratory testing is a service and not a commodity” “what is good for the patient is cost-effective medicine”


RealitiesRealities

Clinical laboratories and all persons associated

Continue to be the focus of state and federal regulators.

Laboratory sales activities, patient registration, testing and billing practices

Are subject to complex fraud and abuse laws, prohibitions and third party payment rules.


OpportunitiesOpportunities Laboratory leaders

With a clear understanding of compliance Coupled with their knowledge of laboratory

management, testing, billing and service delivery systems,

Have the unique skill set necessary to coordinate the development of an effective compliance program.

Without strong laboratory compliance leadership Laboratory providers find it difficult to convert their

legal plan into an effective operational program Leave themselves exposed to hefty fines and penalties.


Major Barrier To Effective ComplianceMajor Barrier To Effective Compliance

Bridge of Understanding

Valley of Poor Understanding

Laboratory Laboratory Testing and Testing and

Result ReportingResult Reporting

Billing and Billing and CollectionsCollections


Federal Laws (Basics)Federal Laws (Basics)

False Claim Billing for something you

don’t deserve

Shell Lab (70/30 Rule) Independent lab not

qualified for MCR testing

$ $

Antikickback (Inducement) Giving away something

you shouldn’t

Stark Law An Inappropriate

Financial Relationship

_+


Civil or Criminal PenaltiesCivil or Criminal Penalties Federal False Claims Act and Statutes

– Billing for services not rendered– Altering provider claim to obtain higher reimbursement– Submitting false information regarding services rendered, charges

for services, actual services performed, and name of beneficiary– Submitting claims for noncovered services so they appear to be covered

Fines: $10,000-25,000 per claim, plus treble damages

Anti-kickback

– Illegal to solicit or receive, directly or indirectly, any remuneration or inducement for referral of services reimbursed by Medicare/Medicaid. This includes free equipment and services such as: Cash or rebates of any kind Fax machines/computers Collection supplies

Fines: $25,000-50,000 for each violation; treble damages; possible exclusion; up to five (5) years in prison.

$

$

Phlebotomy services Biohazard waste pickup Free Testing


Compliance Program Guidance for Clinical Labs (CPGCL)Compliance Program Guidance for Clinical Labs (CPGCL)

August 1998

Voluntary plan to assist laboratories in preventing and correcting fraudulent activity.

Modeled after major corporations’ integrity agreements (“CIA”) requiring five years mandatory government monitoring.

OIG has “zero” tolerance towards fraud and abuse.

OIG will use its extensive statutory authorities to reduce fraud.

OIG believes that, by implementing an effective compliance plan, a laboratory will (1) achieve better quality control over claims submission and (2) reduce the risk of future criminal and civil liabilities.


Characteristics of an “Effective” Compliance ProgramCharacteristics of an “Effective” Compliance Program

Full Organizational Involvement

Tailored Policies and Procedures

Employee Training and Concern Reporting

Periodic Auditing and Monitoring

Transition from a Legal to an Operational Program

Team Accountability with Individual Responsibility

Problem Solving Corrective Action Vs. Problem Maintenance


Baseline Audit Assessment is the “key”Baseline Audit Assessment is the “key” to an “Effective” Compliance Program to an “Effective” Compliance Program

Objectives

– Unify commitment– Educate and empower – Create momentum and enthusiasm– Establish corrective action goals– Measure compliance

Characteristics

– Friendly unbiased prospective assessment– Attorney-client privileged Communications– Focuses on specified laws, regulations – Identifies areas of noncompliance– Initiates the formation of a Compliance Team


The Process is ParticipativeThe Process is Participative

Counsel Oversee engagement and advise the organization

Senior Management Engagement support

Laboratory and Support Management Properly relate current practices

Laboratory Compliance Auditor/Consultant Objectively evaluate the lab and support practices Recommend corrective action if necessary

CCO and Laboratory Compliance Coordinator Assist in the audit process Track corrective action


What is the Outcome of a Lab Compliance Audit?What is the Outcome of a Lab Compliance Audit?

To the lab staff and management

Unbiased, knowledgeable, high risk evaluation of the laboratory and support practices

Formal report with recommendations

To the organization

Assurance of doing business in accordance with the laws, rules and regulations

Compliance with the OIG Model Compliance Program

Protection under the Federal Sentencing Guidelines


Prioritizing RecommendationsPrioritizing Recommendations

Level I PriorityLevel I Priority

Protect a High-Risk Area

Level II PriorityLevel II Priority Ensure an Effective

Compliance Program

Level III PriorityLevel III Priority Improve an Existing

Compliant Practice

Compliant PracticeCompliant Practice

Level I PriorityLevel I Priority

Protect a High-Risk Area

Level II PriorityLevel II Priority Ensure an Effective

Compliance Program

Level III PriorityLevel III Priority Improve an Existing

Compliant Practice

Compliant PracticeCompliant Practice

MEDICALMEDICALRECORDSRECORDS

BILLINGBILLING

HIS/LISHIS/LISREGIS-REGIS-TRATIONTRATION

LABLAB

LABLABOUTREACHOUTREACH

SERVICESERVICESYSTEMSYSTEM

LABLABOUTREACHOUTREACH

SERVICESERVICESYSTEMSYSTEM

ACCOUNTSACCOUNTSRECEIVABLERECEIVABLE

SYSTEMSYSTEM

ACCOUNTSACCOUNTSRECEIVABLERECEIVABLE

SYSTEMSYSTEM

PSCPSCPSCPSCSNFSNFSNFSNF

LabLabLabLab

MCRMCRMCRMCR

MCDMCDMCDMCD

SELFSELFPAYPAY

SELFSELFPAYPAY

OP

HMOHMOHMOHMO

OP

OP

OP

OP

OP

OP

OP

OP

OP

IP

IP IP

IPIP

IP

A Means of Ensuring Ethical,A Means of Ensuring Ethical,Legal and Sound Practices and RelationshipsLegal and Sound Practices and Relationships

$$$$

$$

$$$$

$$

$$

$$

$$$$

Hospital Laboratory Compliance ProgramHospital Laboratory Compliance Program

OP

$$

OP

COMM.COMM.INS.INS.

DIRECTDIRECTCLIENTCLIENT

DoctorDoctorClinicClinic

DialysisDialysis

HomeHomeHealthHealth


ACHIEVING COMPLIANCEACHIEVING COMPLIANCE

HISHISHISHIS

LISLISLISLISPATIENT REGISTRATION

Assign Area Responsibilities and Assume theAssign Area Responsibilities and Assume the OIG “0” Tolerance For ErrorsOIG “0” Tolerance For Errors

LABORATORY PROCESSING

ORGANIZATIONAL STRUCTURE

©2000 Chi Laboratory Systems, Inc.-15-

SALES AND MARKETING

BILLING A/R

© 2000 Chi Laboratory Systems, Inc.Graphics/Compliance/Presentations/Florida Coalition/2000-01-19 Florida Coalition Presentation.ppt


HISHISHISHIS

LISLISLISLISBILLING A/R

PATIENT REGISTRATION



ORGANIZATIONAL STRUCTURE• Compliance Program Development• Owned Testing Entities• CLIA License• Medicare Provider Status Validation• Compensation Arrangements

SALES AND MARKETING

©2000 Chi Laboratory Systems, Inc.-16- © 2000 Chi Laboratory Systems, Inc.

Graphics/Compliance/Presentations/Florida Coalition/2000-01-19 Florida Coalition Presentation.ppt


HISHISHISHIS







SALES AND MARKETING• Standard Test Requisition• Lab Reference Manuals• Rational Prices/Discounts• Panel Profile Notices• Supplies and Courier Service



HISHISHISHIS






SALES AND MARKETING

PATIENT REGISTRATION• Use of Standard Test Requisition• Doctor ID, UPIN and Demo.• Billing Type (SNF, Dialysis etc.)• Written Test Authorization• Outpatient Vs. Nonpatient• ICD-9 Narrative Translation• ICD-9 Medical Necessity Edit• ABN Signing Practices



HISHISHISHIS

LISLISLISLIS

BILLING A/R

Assume theAssume the OIG “0” Tolerance For ErrorsOIG “0” Tolerance For Errors



SALES AND MARKETING


LABORATORY PROCESSING • Tests Not Performed • Duplicate Testing• Reflex Testing• CPT Code Technical Review • Test Utilization Analysis• Anatomic Path CPT & ICD9 Coding



HISHISHISHIS

LISLISLISLISPATIENT REGISTRATION





SALES AND MARKETING

BILLING A/R• Pending Claim Analysis• Claims Denial Analysis• Credit and Bad Debt Analysis• Patient Billing Practices• Third-Party Claim Analysis• Three-Day Rule Processing• Records Retention (7 years)



Laboratory Compliance TeamLaboratory Compliance Team

Team Members (Leaders)

Laboratory Compliance Coordinator

Internal Auditor

Laboratory Operations

Billing AR

HIS/LIS

Outreach Sales/Marketing

Admissions/Patient Registration

Compliance is a Team SportCompliance is a Team Sport


Laboratory Compliance Team ResponsibilitiesLaboratory Compliance Team Responsibilities

Drives Compliance Process Development

Implement and carry out laboratory compliance policies. Design remedial actions and systems. Meet to discuss compliance issues and project status. Advise the CCO of new or revisions in laboratory compliance. Communicate compliance standards to all employees. Achieve system wide compliance. Take responsibility for corrective action.

Internal Audit’s Role

Provide organizational focus, regulatory and audit expertise Perform an independent and objective appraisal function Ensure accountability and bridge to senior management


““Problem Solving Vs Problem Maintenance”Problem Solving Vs Problem Maintenance”

Effective Corrective Action

Process Modification

Standards and Procedures

Reengineering

Training and Development

Error Measurement

Establish Ownership

Goal to “fully correct” unethical, Goal to “fully correct” unethical, illegal, or other non-conforming conduct.illegal, or other non-conforming conduct.


Benefits of a Compliant System Benefits of a Compliant System SALES AND OPERATIONS• Customer Satisfaction (Hassle Free Service)• Dependable Rapid Report TAT• Eliminate Error Management Systems• Improved Efficiency and Greater Capacity• Peaceful Work Environment and Satisfied EmployeesFINANCIAL• Decreased Operation Cost/Specimen (Manpower, Supplies,

Equipment)• Decrease Billing/Claim Filing Time• Improve Collection, Cash Flow and Profitability• Increase Capture Lost RevenueGROWTH• #1 in the Marketplace• Reputation, Profitability and Job SatisfactionCOMPLIANCE• Minimize Legal Risk• Results in a Program which will withstand Federal scrutiny

“Doing Things Right the First Time”

“eliminating high risk laboratory issues" ©2000 chi laboratory systems, inc. larry small,...

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