Compliance Program Guidance for Third-Party Medical Billing Companies

The Federal Government’s Health and Human Services Office of Inspector General (OIG) publishes the Compliance Program Guidance for Third-Party Medical Billing Companies; a set of voluntary guidelines for third-party medical billing services to formulate and implement internal programs intended to safeguard against fraud and abuse of government healthcare agencies.

The OIG recognizes the diversity of organizations that comprise the third-party medical billing industry; medical billing services ranging from publicly traded multinational organizations to the medical billing service operated out of a basement corner. The OIG also recognizes the diversity of services provided by these medical billing services.

The OIG believes that, regardless of the size, resources and services rendered by third-party medical billing services, every organization will benefit from the principles espoused in the compliance program. In order to be effective, the governing body of the billing service (Board of Directors, CEO, Partners, etc.) is required to formally commit (document) to a compliance program that includes at least seven applicable elements.

Before we get any further, a word about the seven elements. The OIG notes that these elements are based on the seven steps of the Federal Sentencing Guidelines. If you have any question about The Federal Sentencing Guidelines, they are detailed policies and practices for the Federal criminal justice system that prescribe appropriate sanctions for offenders convicted of Federal crimes.

Again, a medical billing company’s statement of compliance should contain the following seven elements:

1. The development and distribution of a policy indicating the processes and procedures designed to insure a company’s commitment to monitoring and addressing possible areas of fraud to include the claims submission process; code manipulation and financial relationships with vendors;
2. The designation of a chief compliance office (CCO) and other appropriate body, i.e. compliance committee, responsible for operating and monitoring the compliance program and who reports directly to the CEO and governing body;
3. The development and implementation for education and training programs for all applicable employees;
4. The implementation of a mechanism or process, i.e. a hotline, to receive complaints and fraud tips and procedures to maintain and protect the anonymity of the complainants;
5. The development of a system to respond to allegations of improper/illegal activities and the enforcement of appropriate disciplinary action against employees who have violated internal compliance policies, applicable statutes, regulations or Federal, State or private payer health care program requirements;
6. The use of audits or evaluations to monitor compliance and assist in the reduction of identified problem areas; and
7. The investigation and correction of identified systemic problems and the development of policies addressing the non-employment of sanctioned individuals.
I’ll continue to talk about the OIG’s Compliance Program Guidance for Third-Party Medical Billing Companies in future articles. If formulated and documented properly, a medical billing service’s compliance program will make up a significant portion of the company’s policy and operating manual - particularly for smaller billing services.

Disclaimer: This article is for informational purposes only and is not intended to be considered legal advice. A third-party medical billing service should consult with a lawyer or other professional when developing a compliance program.

The author, David George, is an expert in electronic medical billing services and account receivable management. He specializes in significantly improving the cashflow, revenues and profitability of physician practices accross the country. David also authors the