OIG Compliance Plan Guidance for Various Segments in Healthcare

OIG Compliance Plan Guidance for Various Segments in Healthcare

The Office of Inspector General (OIG) developed a series of voluntary compliance program guidance documents directed at various segments of the healthcare industry to encourage the development and use of internal controls to monitor adherence to applicable statutes, regulations and compliance program requirement. The OIG compliance plan guidelines strive to assist in identifying and refining ongoing risk areas and compliance efforts.

The OIG compliance program guidance documents range from hospitals and nursing homes to third-party billers and medical equipment suppliers. The following guidelines serve as a road map to existing compliance plans.

Nursing Facilities — 

Nursing facilities are vital to the health and welfare of millions of Americans. Therefore, it is imperative for nursing facilities to adhere to a compliance plan to ensure compliance within the healthcare industry’s regulations.

“A successful compliance program addresses the public and private sectors’ common goals of reducing fraud and abuse, enhancing health care providers’ operations, improving the quality of health care services, and reducing their overall cost. Meeting these goals benefits the nursing facility industry, the Government, and residents alike.”

In addition to the seven elements of a compliance program, the OIG recommends each nursing facility adapt to it’s own particular circumstances. Along with keeping up with Medicare and Medicaid reimbursements, nursing facilities have potential risk areas to prioritize in their compliance plans.

1. Quality of Care

“By 2030, the number of older Americans is estimated to rise to 71 million, 31 making the aging of the U.S. population ‘‘one of the major public health challenges we face in the 21st century.’’”

There are many potential risk areas nursing facilities must be aware of to ensure the quality of care for residents such as, sufficient staffing. According to the OIG, important considerations for staffing models includes staff skill levels, staff-to-resident ratios, staff turnovers, staff schedules, disciplinary records, event reports, etc. Other compliance risk areas include comprehensive resident care plans that addresses medical needs of residents, medication management, appropriate use of psychotropic drug use, resident safety as well as promoting resident safety, monitoring resident interactions and staff screening.

2. Submission of Accurate Claims

Nursing facilities must submit accurate claims to Federal healthcare programs. Submitting a false claim to a Federal healthcare program, such as Medicare or Medicaid, may subject the individual,  the organization, or both to prosecution, hefty fine or exclusion from participation in Federal healthcare programs.

Common risk associated with accuracy of claims include duplicate billing, insufficient documentation and false or fraudulent cost reports.

3. The Federal Anti-Kickback Statute

The Federal anti-kickback statute, section 1128B(b) of the Act,92 places constraints on business arrangements related directly or indirectly to items or services reimbursable by Federal health care programs. The anti-kickback statute prohibits the health care industry from engaging in practices, such as offering or receiving gifts to reward referrals.

Kickbacks are often disguised as otherwise legitimate payments or are hidden in business arrangements that appear, on their face, to be appropriate. Free goods and services to a referral source, services contracts (non-physician services and physician services), discounts, hospice and reserved bed payments are several known areas of potential risk under the anti-kickback statute.

4. Other Risk Areas

Physician Self-Referrals – The physician self-referral law (a.k.a “Stark” law) prohibits entities that furnish ‘‘designated health services’’ (DHS) from submitting — and Medicare from paying — claims for DHS if the referral for the DHS comes from a physician with whom the entity has a prohibited financial relationship.

There is no “one-size-fits-all” compliance program for nursing facilities due to the diversity within the industry. It is important to tailor your organization’s program to it’s own potential risk areas.

Pharmaceutical Manufacturers —

“A pharmaceutical manufacturer’s implementation of an effective compliance program may require a significant commitment of time and resources by various segments of the organization. In order for a compliance program to be effective, it must have the support and commitment of senior management and the company’s governing body.”

Just like nursing facilities and other areas of healthcare, pharmaceutical manufacturers pose potential risk areas specific to them. Here are some examples – integrity of data, kickbacks, compliance with laws regulating drug samples.

Integrity of Data Used to Establish Government Reimbursements –

Federal and state healthcare programs (Medicare and Medicaid) determine reimbursement rates for pharmaceutical manufacturers via price and sales data (price reductions, free goods, rebates, coupons, grants, etc.) the pharmaceuticals provide. The reimbursement rate is set with the expectation the data provided is complete and accurate. If the data submitted was fraudulent or misleading, a pharmaceutical manufacturer may be liable under the False Claims Act.

Kickback and Other Illegal Remuneration –

If you are in the healthcare industry then you are aware of the Anti-Kickback Statute. Pharmaceutical manufacturers have to be cautious of the following potential risk areas that could involve kickbacks. Relationships with their purchasers and their agents (hospitals, nursing homes, health plans, etc.), poses the greatest risk. There is quite a few areas of potential risk involving kickbacks such as – discounts, product support services, educational grants and research funding to name a few.

Compliance with Laws Regulating Drug Samples –

“The Prescription Drug Marketing Act of 1987 (PDMA) governs the distribution of drug samples and forbids their sale. 21 U.S.C. 353(c)(1).” There are best practices to minimize pharmaceutical’s risks – train sales force to inform sample recipients that samples are not to be sold, clearly label samples and include a notice that the samples are subject to PDMA and are not to be sold.

Summary –

Since 1998, the OIG embarked on a major initiative to engage the private healthcare community in preventing the submission of erroneous claims and in combating fraud and abuse in the Federal health care programs through voluntary compliance efforts. As part of that initiative, OIG has developed a series of compliance program guidances directed at numerous segments of the healthcare industry.

For more supplementary compliance guidances visit the OIG’s guidance page.

“Nursing Facilties CPGs.” SpringerReference (n.d.): n. pag. 30 Sept. 2008. Web. 6 Jan. 2016.
“Pharmaceutical Manufacturers CPGs.” Pharmaceutical Manufacturer Compliance Program Guidance (1985): 3-5. 5 May 2003. Web. 6 Jan. 2016.

Michael Rosen, ESQ.

Written by Michael Rosen, ESQ
ProviderTrust Co-Founder,

Michael brings over 20 years of experience founding and leading risk mitigation businesses, receiving numerous accolades such as: Inc Magazine’s Inc 500 Award and Nashville Chamber of Commerce Small Business of the Year
Connect with Michael on Linkedin

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