for DR. SAMULESON only!!!!

MHCM 6320 Corporate Compliance and Legal Issues in Healthcare

Chapter 1: Introduction to Compliance Programs

Lecture Notes

An extraordinary number of regulations and directives create a very complex

environment for health care providers. It is difficult to avoid conflict with the numerous

requirements and restrictions established through the many government agencies at the

federal, state and even county and city levels. In order to carry out the provision of

health care in such an environment it is necessary to gain as deep an understanding of

these requirements and their operation as possible.

Myths about legal applications:

1. We’re too small to attract regulatory attention.

2. Only physicians are pursued.

3. Small physician practices will not be bothered.

4. Only facilities in big cities are pursued.

5. Malpractice issues are only raised when patients are hurt.

6. Only facilities working with Medicare patients need to be concerned.

7. Years of practicing this way have never led to a problem.

In 2000 the federal government collected $717,000,000 in health care fraud and abuse

cases, with 577,000,000. returned to the Medicare Trust Fund and $27,000,000.

recovered as the federal share of Medicaid restitution. In 2001 and again in 2006,

billions of dollars were recovered.

Expectation of compliance by professionals is insufficient to avoid the difficulties to be

encountered from a failure to do so. This is why a formal compliance program is

necessary.

Compliance programs provide a number of benefits:

 Insures the complete understanding by all staff members.

 Provides consistent interpretation of laws.

 Overcomes Myths.

 Establishes clear guidelines for behaviors.

 Creates safe methods for internal reporting of alleged violations.

 Enacts corrective action before involvement of external authorities.

 Institutes groundwork for internal audits.

A number of benefits of a good compliance program are set out in detail in your

textbook. You should read and study these benefits and submit them to your memory.

A list of these benefits follows:

 Creates a framework for success.

 Generates a foundation of knowledge.

 Establishes an environment of honesty.

 Improves services to patients.

 Minimizes losses.

 Reduces Liabilities.

The Deficit Reduction Act of 2005, effective January 1, 2007, requires health care

organizations receiving Medicaid payments of $5,000,000 or more per year to create

and implement a compliance program. The law requires specific elements as further

set out in your text book.

Medicare released its P4P (Pay for Performance) initiative in 2005 and these policies

have now been adopted by many public and private agencies and insurers. They are

designed to encourage quality improvement in patient care. Financial rewards are also

provided by the Centers for Medicare and Medicaid for those physicians who meet or

exceed their established performance standards in clinical delivery systems and patient

outcomes.

Medicaid Fraud Control Units (MFCU) units were created in 1977 by federal funding

through the enactment of the Medicare and Medicaid Anti-Fraud and Abuse

Amendment.