August 1, 2000

Cost-Effective Compliance Solutions

Holland & Knight Newsletter
Christopher A. Myers

Unless their heads have been buried deeply beneath the sand during the past few years, most health care providers in the United States are well aware that a compliance program is desirable. They have at least a general understanding that a compliance program might benefit them, although they cannot always articulate why. Health care executives and counsel read the papers and trade journals just like the rest of us. They understand that the Departments of Justice (DOJ) and Health and Human Services (HHS) have made stamping out health care fraud and abuse one of their top priorities. They understand that government enforcement agencies have targeted virtually every aspect of the health care industry for investigations and criminal and civil fraud prosecutions. They understand that civil fines in excess of one hundred million dollars have become common and that many health care executives have received significant prison terms.

Nonetheless, some health care providers have decided that compliance programs are simply too expensive, cumbersome, and ineffective to implement, even as they watch their colleagues enter into settlement agreements with government enforcement agencies, which impose expensive and onerous compliance programs on them as a condition of settlement and continued participation in the Medicare and Medicaid programs. Some providers say to themselves, “We are not crooks, so we don’t need to spend the money it would take to implement a compliance program.” After much thought and study, however, the health care practice group at Holland & Knight believes that providers of all types and sizes can have effective compliance programs without courting bankruptcy in the process. In delivering compliance program services to health care clients, the health care practice group has discovered ways to marry compliance program experience with emerging Internet technologies to devise cost-effective compliance solutions through a newly designed Web-based compliance program.

By studying the relevant issues, talking with providers, administrators and consultants and implementing numerous compliance programs for health care entities, Holland & Knight has identified the largest stumbling blocks for those health care providers who have not implemented compliance programs. We have overcome each of the following concerns in our own Web-based compliance program:

  • costs
  • complexity
  • training logistics
  • employee turnover
  • monitoring/auditing issues 
  • documentation of compliance efforts

Costs and Complexity

Until recently, health care providers’ compliance departments or reimbursement offices not only had to keep paper copies of all relevant health care statutes, regulations, manuals and other guidance, but also had to update those references manually. The process was often difficult logistically because it required health care providers to keep track of new issuances from a variety of agencies and other sources and substitute the old language for the new in a consistent and organized manner. Moreover, it was incredibly costly to health care providers to complete this task due to limited material and labor resources. Frequently, headquarters’ references would be kept relatively up-to-date, but, due to lack of trained labor or budget, field offices or facilities would often fall hopelessly behind. People in different parts of the company would, thus, be operating under different sets of rules.

Now, through the use of the Internet and/or company intra/extranet services, providers may make available, electronically and immediately, up-to-date resource materials to all parts of the organization. In this same manner, compliance program documentation may be revised and updated immediately by the compliance department or compliance counsel and distributed to employees through the company’s computer system. In addition to significant cost savings, this method is more simple and less subject to inadvertent errors than the old paper-based system.

Training Logistics

Training costs and related logistical problems also may be reduced significantly through the use of a Web-based compliance plan. Training materials, both general and specific, may be made interactive and available at the convenience of the employee’s schedule. Thus, if an employee is unable to attend a particular training session, training materials may be posted to the company’s secure compliance Web-page for review when the employee is available. Interactive testing may be built into training programs to make them more interesting and more effective. Such testing may also be used to document both the fact that the program was delivered to the employee and that it helped the employee understand the issues covered. Automatic logging of employees may document which employees took the training sessions and their individual test scores. This will help the compliance department to identify weaknesses in the training, how it might be improved and where resources should be focused. 

Employee Turnover

Web-based compliance training may also solve efficiency problems related to employee turnover. Employer training sessions may be videotaped or stored in digital form for easy access by new employees through the compliance Web-site. The system can automatically document and update the delivery of training programs to new employees. Patient care and business office functions may be maintained without closing the office to send employees to off-site training programs.

Monitoring and Auditing Issues

Monitoring and auditing functions also may be enhanced significantly through the use of a Web-based compliance program. Areas of high risk for specific types of providers and the government’s views related to those risks are available on HCFA, OIG and DOJ Web-sites and through reports and guidance materials published by those agencies. These materials may be made available to an organization’s compliance officials, and specific risk areas affecting its operations may be targeted for monitoring and auditing activities. Information gathered may be stored in secure electronic media and then analyzed by internal or external consultants in remote locations. Through the use of outside counsel, the results of certain types of analyses may be protected under the attorney-client privilege unless and until the company chooses to disclose them.

Documentation of Efforts

Documentation of compliance reports and activities may be made automatically in a Web-based compliance program. This would apply not only to the training programs and other communications to employees related to the compliance program, but also to the tracking of monitoring and auditing functions, background checks, investigations of hotline calls and other reports and documentation of routine compliance activities. Then, if government agents come calling and ask whether a compliance program is in place, providers may not only say, “Yes,” but with little time and cost, they may prove it.

For all of the reasons set forth above, Holland & Knight believes that Web-based compliance programs provide the solution to many of the practical difficulties associated with compliance programs. They may be used to significantly reduce the costs associated with compliance efforts as well as to resolve the many logistical difficulties traditionally associated with compliance programs. Using these methods, it is now much easier to design and implement cost-effective compliance programs for both large and small providers of health care services. 

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