4 Common Mistakes When Creating a Corrective Action Plan

Healthcare companies that have been found to be in noncompliance with their billing systems are often required to create and implement a Corrective Action Plan in order to continue to work with the private insurer or the public healthcare program that initiated the investigation. The fact that it is up to the healthcare company to create a Corrective Action Plan is a good thing: It puts you in the position to create one that fixes the billing problems, while also preserving your business’ efficiency and controlling the costs of the solution. However, having the responsibility of creating the Plan also means that you can make a mistake.

The healthcare and corporate compliance attorneys at the national law firm Oberheiden P.C. have extensive experience helping companies craft effective and efficient Corrective Action Plans. Here are four common mistakes that they tend to encounter when these Plans were poorly made.

1. Creating Tedious Compliance Requirements for Your Company

One common mistake that healthcare companies make when creating their own Corrective Action Plan is to fixate exclusively on meeting the demands made by their payor. While it is essential for your Corrective Action Plan to live up to its name and prevent the types of overcharges that were made before, it is easy to overlook the practical repercussions that the new compliance mechanisms will have on your company. In many cases, we have seen Corrective Action Plans that take such great lengths to ensure that the billing errors will not be made again that actually following the Plan’s course of conduct is impossible to do without taking hours to do what should be done in mere minutes.

The best Corrective Action Plans fix the billing problem without infringing on your healthcare business more than the absolute minimum.

2. Not Actually Fixing the Problem

On the other end of the spectrum are Corrective Action Plans that do not go far enough to fix the billing problems. This can be the outcome for a variety of reasons. Regardless of why it happened, insufficient Corrective Action Plans are serious mistakes, for two reasons:

1. They are likely to get rejected by the payor, and
2. If accepted, they will not protect your company from liability for future billing errors.

In either case, the long term outcome is likely to be program exclusion or a terminated contract.

3. Refusing Responsibility

Perhaps the most common mistake that healthcare companies make when creating a Corrective Action Plan is refusing to take responsibility for the billing errors that led to the Plan’s creation. This is an easy and understandable mistake to make, but it can backfire if it leads to the creation of a Plan that does not fix, or even address, the issue.

Getting accused of severe and systemic billing irregularities can spike your emotions. Many healthcare executives continue to feel emotional as the audit or investigation continues, and react strongly against a finding that overcharges were made. In some cases, that emotional response manifests itself in a denial that there was ever a billing problem, that the audit’s results were false or fabricated, and that the Corrective Action Plan is needless.

This course of conduct often leads to the creation of a Corrective Action Plan that is based on the idea that there is no problem to fix. Unfortunately, these Plans rarely propose effective solutions to the billing issues. Generally, these Plans get refused by the payor, leading to contract terminations and program exclusions. Furthermore, any billing issues that were found during the audit are likely to continue, imperiling other insurance contracts.

In order to create an effective Corrective Action Plan, you have to start by accepting responsibility for the billing issues. Only be acknowledging the problem can it be fixed.

This is not to say that the results of the audit or investigation are infallible. There may very well be grounds to dispute or to doubt the finding of overcharges. However, the process of creating a Corrective Action Plan is not the place to address those doubts. Instead, you should challenge them through the appropriate appeals process.

4. Not Hiring an Attorney or Consultant

Generally, the mistake that underlies these other issues is the decision to create a Corrective Action Plan without the legal advice of a skilled and experienced corporate compliance attorney or an outside consultant. Hopefully, healthcare executives will only ever find themselves responsible for creating one Corrective Action Plan in their career. That lack of experience can make the process overwhelming. It can also drastically increase the likelihood that you make a mistake when creating the Plan or fail to make it in a way that protects your company without also saddling it with difficult compliance requirements.

The costs of a mistake in your Corrective Action Plan are not small. Many payors expect your first proposed Plan to be your last, and if it does not satisfy them, they terminate their contract with your business. Even if you do get a second chance to create a Plan that they find suitable, the initial proposal can make the payor impatient, sour the negotiation process, and make them less amendable to a Plan that compromises their interests with your business’ needs.

Given the high penalties that are possible if your Corrective Action Plan gets rejected, creating one without the experienced input of a consultant or attorney can be a huge risk.

The Healthcare and Corporate Compliance Attorneys at Oberheiden P.C. Create Effective Corrective Action Plans

The healthcare defense and corporate lawyers at Oberheiden P.C. have extensive experience helping healthcare companies craft Corrective Action Plans that satisfy even the most demanding payors, while still preserving your business’ integrity and efficiency. This can mitigate the fallout from the allegations of billing errors at your company, empowering you and your company and helping you move forward and continue to succeed.

Contact Oberheiden P.C. online or call their law office at (888) 680-1745 for the legal assistance you need to create the Corrective Action Plan that will serve your company best.