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The following is an excerpt from the Human & Health Services – Guidelines for 3rd Part Medical Billing Companies

Program Guidance for Third Party Medical Billing Companies
1. Introduction
A. Benefits of a Compliance Program
B. Application of Compliance Program Guidance
II. Compliance Program Elements
A. Written Policies and Procedures – Part I | Part II
B. Designation of a Compliance Officer and a Compliance Committee
C. Conducting Effective Training and Education
D. Developing Effective Lines of Communication
E. Enforcing Standards Through Well-Publicized Disciplinary Guidelines
F. Auditing and Monitoring
G. Responding to Detected Offenses and Developing Corrective Action Initiatives
III. Conclusion

I. Introduction

The Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) continues in its efforts to promote voluntarily developed and implemented compliance programs for the health care industry. The following compliance program guidance is intended to assist third-party medical billing companies (hereinafter referred to as ‘‘billing companies’’) and their agents and subcontractors in developing effective internal controls that promote adherence to applicable Federal and State law, and the program requirements of Federal, State and private health plans. Billing companies are becoming a vital segment of the national health care industry.

Increasingly, health care providers are relying on billing companies to assist them in processing claims in accordance with applicable statutes and regulations. Additionally, health care providers are consulting with billing companies to provide timely and accurate advice regarding reimbursement matters, as well as overall business decision-making. As a result, the OIG considers the compliance guidance for third-party medical billing companies particularly important in the partnership to defeat health care fraud.

At this juncture, it is important to note the tremendous variation among billing companies in terms of the type of services and the manner in which these services are provided to their respective clients. For example, some billing companies code the bills for their provider clients, while others only process bills that have already been coded by the provider. Some billing companies offer a spectrum of management services, including accounts receivable management and bad debt collections, while others offer only one or none of these services.

Clearly, variations in services give rise to different policies to ensure effective compliance. This guidance does not purport to provide instruction on all aspects of regulatory compliance. Rather, we have concentrated our attention on general Federal health care reimbursement principles. For those billing companies that focus their services in a particular sector of the health care industry, the billing company should also consult any compliance program guidance previously issued by the OIG for that particular sector.

This guidance is pertinent for all billing companies, large or small, regardless of the type of services provided. The applicability of the recommendations and guidelines provided in this document depend on the circumstances of each particular billing company. However, regardless of the billing company’s size and structure, the OIG believes every billing company can and should strive to accomplish the objectives and principles underlying all of the compliance policies and procedures recommended within this guidance.

Within this document, the OIG first provides its general views on the value and fundamental principles of billing company compliance programs, and then provides specific elements that each billing company should consider when developing and implementing an effective compliance program. Although this document presents basic procedural and structural guidance for designing a compliance program, it is not in itself a compliance program. Rather, it is a set of guidelines for consideration by a billing company interested in implementing a compliance program.

Fundamentally, compliance efforts are designed to establish a culture within a billing company that promotes prevention, detection and resolution of instances of conduct that do not conform to Federal and State law, and Federal, State and private payer health care program requirements, as well as the billing company’s ethical and business policies. In practice, the compliance program should effectively articulate and demonstrate the organization’s commitment to legal and ethical conduct. Eventually, a compliance program should become part of the fabric of routine billing company operations.

Specifically, compliance programs guide a billing company’s governing body (e.g., boards of directors or trustees), chief executive officer (CEO), managers, billing and coding personnel and other employees in the efficient management and operation of the company. They are especially critical as an internal quality assurance control in reimbursement and payment areas, where claims and billing operations are often the source of fraud and abuse and, therefore, historically have been the focus of Government regulation, scrutiny and sanctions.

It is incumbent upon a billing company’s corporate officers and managers to provide ethical leadership to the organization and to assure adequate systems are in place to facilitate and promote ethical and legal conduct. Employees, managers and the Government will focus on the words and actions of a billing company’s leadership as a measure of the organization’s commitment to compliance. Indeed, many billing companies have adopted mission statements articulating their commitment to high ethical standards. Compliance programs also provide a central coordinating mechanism for furnishing and disseminating information and guidance on applicable Federal and State statutes, regulations and other payer requirements.

The OIG believes that open and frequent communication between the billing company and the health care provider is fundamental to the success of any compliance endeavor. Billing companies are in a unique position with regard to establishing compliance programs. An individual billing company may support a variety of providers with different specialties and, consequently, different risk areas. It is with this in mind that the OIG strongly recommends the billing company coordinate with its provider clients to establish compliance responsibilities.

Once the responsibilities have been clearly delineated, they should be formalized in the written contract between the provider and the billing company. The OIG recommends the contract enumerate those functions that are shared responsibilities and those that are the sole responsibility of either the billing company or the provider.

Implementing an effective compliance program requires a substantial commitment of time, energy and resources by senior management and the billing company’s governing body. Superficial programs that simply purport to comply with the elements discussed and described in this guidance or programs hastily constructed and implemented without appropriate ongoing monitoring will likely be ineffective and could expose the billing company to greater liability than no program at all. Additionally, an ineffective compliance program may expose the billing company’s provider clients to liability where those providers rely on the billing company’s expertise and its assurances of an effective compliance program. Although it may require significant additional resources or reallocation of existing resources to implement an effective compliance program, the long term benefits of implementing the program significantly outweigh the costs. Undertaking a voluntary compliance program is a beneficial investment that advances both the billing company’s organization and the stability and solvency of the Medicare program.