Hospital Billing Compliance for 2021 | Oberheiden P.C.

Hospital Billing Compliance

What Directors Need to Know for 2021

While hospitals across the United States have faced unprecedented challenges in 2020, the duty to address these challenges head-on has not supplanted their ordinary compliance obligations. Rather, hospitals have been forced to confront the unprecedented effects of the COVID-19 pandemic while also continuing to execute and enforce their normal compliance policies and procedures.

Heading into 2021, the compliance outlook for hospitals remains largely the same. Hospitals will need to prioritize compliance in all aspects of their operations – billing included – and they will need to be prepared to affirmatively demonstrate their compliance when faced with inquiries from Medicare and Medicaid auditors, the U.S. Department of Health and Human Services (DHHS), the U.S. Department of Justice (DOJ), Medicaid Fraud Control Units (MFCUs) and other state and federal authorities.

Hospital Billing Compliance in 2021: A Comprehensive Overview

What will it take for hospitals to remain compliant and avoid unwanted scrutiny in 2021? While billing compliance is just one aspect of a comprehensive compliance program, it is one of the most-complex aspects when it comes to implementation and enforcement. From billing for routine medical exams to billing for COVID-19 testing and treatment, hospitals will need to be extremely careful to ensure that their billing practices do not result in liability exposure and the risk of losing their program eligibility.

7 Key Elements of Hospital Billing Compliance

There are numerous issues that need to be addressed when it comes to billing compliance for hospitals and other health care providers. This leads to the complexity we referenced above. In order to make billing compliance manageable, hospitals must break their obligations down and target the various elements of billing compliance on-by-one.

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1. Medicare and Medicaid Billing Compliance

Medicare and Medicaid billing compliance are essential for any hospital that relies on reimbursements from these health care benefit programs. Each program has its own set of rules and regulations, and each is subject to oversight from multiple different authorities. While Medicare and Medicaid compliance largely have to do with ensuring accurate coding, there are several other areas of compliance that hospitals need to address as well.

2. Tricare, DOL, and Other Federal Benefit Program Billing Compliance

Tricare, the U.S. Department of Labor (DOL), and other federal payors have their own unique sets of regulatory requirements as well. Tricare compliance in particular has become a focus area for federal health care law enforcement efforts in recent years, and hospitals that bill Tricare, the DOL, and other payors need to ensure that all of their billings qualify for reimbursement.

3. Private Health Insurance, PPO, and HMO Billing Compliance

In addition to federal health care benefit programs, private payors enforce strict billing requirements as well. Hospitals that bill private health insurance companies, PPOs, HMOs, and other organizations need to ensure that their billing personnel, procedures, and applications are sufficiently attuned to the modern risks and demands of private health care billing compliance.

4. Billing for Telemedicine and Telehealth Services

The COVID-19 pandemic has caused a spike in the demand for telemedicine and telehealth services; and, while some rules have been relaxed temporarily, compliance with regard to telemedicine and telehealth billing presents unique demands. This was already an area of focus for federal authorities prior to the pandemic, and we expect to continue to see significant enforcement activity in this area in 2021.

5. Prescription Billing Compliance

Billing for prescriptions is another area where hospitals can (and often do) get into trouble. When billing for prescription medications, there are numerous factors that must be considered in order to ensure that the billing is authorized under the applicable set of guidelines. For hospitals with in-house pharmacies, pharmacy compliance is another area entirely unto its own.

6. Stark Law and Anti-Kickback Statute Compliance

Regardless of the nature of a hospital’s relationship with the doctors practicing in its facilities, Stark Law and Anti-Kickback Statute compliance are areas of concern. If a hospital bills Medicare or Medicaid for services in violation of either of these statutes (whether knowingly or unknowingly) it can face federal enforcement action for health care billing fraud.

7. Remaining Current on Billing Rules, Regulations, and Requirements

From Medicare and Medicaid to PPOs and HMOs, all health care payors routinely update their billing rules and regulations. While many of these updates are relatively minor, some are not. For hospitals, establishing billing compliance is not a one-time event. Instead, it is essential to monitor for new requirements and implement necessary compliance program modifications on an ongoing basis.

7 Key Billing Compliance Risks for Hospitals

When developing (or updating) compliance policies and procedures, hospitals must ensure that their efforts are custom-tailored to the unique risks facing their facilities. However, there are general risks that must be addressed as well—and these concerns need to covered in hospitals’ billing compliance programs regardless of whether and to what extent they are currently on administrators’ or executive team members’ radars.

1. Lack of Medical Necessity

All payors require evidence of medical necessity in order to justify payment requests. Increasingly, hospitals and other providers are finding that their doctors’ decisions are being second-guessed by auditors and enforcement officials. Prior to billing for tests and other services, it is critical to ensure that the test or other service meets the applicable standards for reimbursement.

2. Inadvertent Coding Errors

Inadvertent coding errors happen, and the occasional mistake is to be expected. Despite the breadth of the federal and private billing rules and regulations, they are not always clear, and in many circumstances interpretation is required. However, hospitals are still expected submit accurate billings, and a high volume of coding errors (in comparison to other facilities) is highly likely to trigger a billing fraud audit or investigation.

3. Evidence of a Pattern of Overbilling

In addition to a high error rate overall, evidence of a pattern of overbilling can also lead to swift enforcement action and heavily penalization. This is because patterns of mistakes – whether intentional or not – are viewed as evidence of insufficient efforts to establish and maintain compliance.

4. Inadequate Compliance Training or Protocols

One of the most-common mistakes we see made by hospitals and other health care providers involves developing billing compliance policies and procedures but then failing to implement them effectively. When examining hospitals’ and other providers’ compliance efforts, auditors and government agents expect to see documentation which demonstrates that appropriate training has been provided and that adequate protocols are being followed.

5. Lack of Internal Compliance Oversight

In order to manage billing compliance effectively, hospitals should have compliance officers whose time (or at least a significant portion of whose time) is devoted to internal oversight. A compliance officer should be able to independently assess the hospital’s compliance efforts without bias, and it should be beyond question that he or she is encouraged to report any positive or negative findings.

6. Unlawful Financial Relationships, Rebates, and Incentives

From relationships with independent pharmacies to relationships with marketers, hospitals need to be extremely careful when it comes to how hospitals structure their financial relationships with third parties. Paying or accepting program-reimbursed funds for an unauthorized purpose is considered a form of billing fraud, and it can lead to substantial penalties under the False Claims Act.

7. Intentional Billing Fraud

Finally, hospitals must be cognizant of the risk of intentional billing fraud. Not only should hospitals have policies that prevent the intentional inflation of billing requests and upcoding of services, but they must actively monitor for red flags and be prepared to systematically take appropriate responsive action as well.

Hospital Billing Compliance Program Documentation, Implementation, Execution, and Enforcement

In order to address these risks (among the many other compliance risks that hospitals face on a day-to-day basis), hospital directors must take compliance seriously and devote the time and resources required to ensure that mistakes are avoided as often as possible. Government and private payors expect hospitals’ error rates to be extremely low, and they expect any errors to be one-off issues as opposed to being indicative of systemic deficiencies.

With this in mind, heading into 2021, hospitals should be giving equal attention to all four components of effective billing compliance:

  • Documentation – Hospitals must establish documented billing compliance policies and procedures and continue to generate documentation of compliance on an ongoing basis.
  • Implementation – New and updated compliance policies and procedures must be thoroughly implemented through training and resource distribution.
  • Execution – Hospitals must ensure that their billing compliance policies and procedures are being executed appropriately through independent internal oversight.
  • Enforcement – When billing compliance issues are identified, hospitals must take appropriate responsive action in order to prevent future mistakes and demonstrate to the relevant payor(s) that they are taking their billing compliance obligations seriously.

Contact the Health Care Billing Compliance Lawyers and Consultants at Oberheiden P.C.

Do you have questions or concerns about your hospital’s billing compliance program? Are you wondering if your hospital’s current efforts are enough? To speak with a senior health care billing compliance lawyer or consultant at Oberheiden P.C., call 888-680-1745 or request a complimentary consultation online today.

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