The Cost of Risk Management
PRACTICE MANAGEMENT
Raymond Foxworth
What exactly is risk management? Many of my colleagues need clarification when discussing this topic. In a clinical setting, risk management includes:
• Patient safety
• Adhering to mandatory state and federal regulations • Establishing and maintaining office policies and procedures
• Monitoring potential legislative impacts on health care
It sounds a lot like a compliance program, and the reality is that it is. In addition, to minimize errors in your practice, a compliance program and a focus on risk management help prevent incidents that put you, your license, your patients, and your team at risk.
It’s no secret that third-party payers know more about our practices than we do. Currently, that data is utilized to battle healthcare fraud. The National Health Care Anti-Fraud Association estimated that healthcare fraud costs the nation $68 billion annually, but some estimates place this figure upward of $230 billion. Fortunately, new technologies are making major strides in the fight against various medical fraud schemes.
The National Health Care Anti-Fraud Association estimated that healthcare fraud costs the nation $68 billion annually, but some estimates place this figure upward of $230 billion.
“This new technology monitors billing claims and can identify fraud within milliseconds. Using advanced, fuzzy, logic-based rule sets, and dynamic, intelligent profiling, a sophisticated, fully automated, real-time solution can automatically extract claims and reveal potential fraud patterns and improper medical coding. By considering the overall context of a claim, instead of just a single line item on a bill or bills, the solution reveals additional incorrectly billed charges even after a medical bill review company has checked them. These solutions drill down to determine the actual risk for each billed line of a claim based on the specific account information, previous claims, patient profile, and provider history. In addition, this new technology can easily detect upcoding and billing for services not provided.” (Newell, 2021)
And, for the record, upcoding to get paid more and downcoding to charge your cash and underinsured patients less is equally illegal and considered fraudulent.
So how successful is this software? The federal government won or negotiated more than $5 billion in healthcare fraud judgments and settlements in its 2021 fiscal year, the largest amount ever in the history of the HHS and Department of Justice’s fraud and abuse enforcement program. (Pifer, 2022) What does it take to have a compliance program in your office? The OIG laid out the seven fundamental elements of an effective compliance program. (Jackson Lewis, 2018)
1. Implementing Written Policies, Procedures, and Standards of Conduct
You and your entire team need to understand the regulatory measures from the OCR (Office of Civil Rights), OSHA, HIPAA, Medicare/Medicaid, etc., with which you must comply. Establishing written policies and procedures that support those standards within your practice helps your team remain compliant while carrying out their job functions.
2. Designating a Compliance Officer
The compliance officer can be you or any team member, or you can outsource compliance to an outside company. When choosing a compliance officer, remember that this person should have sufficient training, authority, time, and autonomy to carry out their responsibilities. For example, Walgreens agreed to a multimillion-dollar settlement with the government, partly for charging more to Medicaid than others. (DOJ, 2019) Yes, Part D providers have different rules than Part B, but the real takeaway is that you would think a company as large as Walgreens, with all its layers of compliance staff and attorneys, wouldn’t make that mistake. But they did, and it should give us pause and force the question: Do I want to deal with all this or is my office better off focusing on patients and generating revenue rather than going back to school to learn compliance?
3. Conducting Effective Training and Education
Understanding the policies and procedures in your practice is a must. Train your team to ensure your practice is safe. Training needs to be recorded in your compliance manual and scheduled regularly.
4. Developing Effective Lines of Communication
Compliance is serious and should be taken seriously by every employee. You need to establish a culture of compliance within your practice and open the lines of communication between you and your staff.
5. Conducting Internal Monitoring and Auditing
Monitoring and auditing in your practice will let you know your areas of risk and allow you to establish procedures to minimize those risks. Additionally, it helps you avoid submitting incorrect claims to payers. Assessments should be performed on billing systems, claims accuracy, coding accuracy, and documentation standards.
6. Enforcing Standards Through Well-Publicized Disciplinary Guidelines
Establishing disciplinary guidelines for conduct/ actions that violate the policies, procedures, and standards of conduct in your practice lets your team know that compliance is a priority and everyone’s responsibility.
7. Respond Promptly to Detected Offenses and Undertake Corrective Action
It is easy to get bogged down in the day-today responsibilities in practice, but not taking immediate action when detected offenses arise is bad business. Your goal is to respond quickly and efficiently when issues emerge and establish a corrective action plan to prevent further errors. Document the problem and the resolution immediately in your compliance manual, plus any measures you have put in place to prevent future missteps.
When it comes to billing your chiropractic patients, consistently achieving compliance with state and federal healthcare laws is a big responsibility. The size of your clinic doesn’t make staying compliant much easier. The smaller your operation, the fewer team members to keep on top of things. The larger your practice, the more moving parts you must monitor. Thus, outsourcing compliance can make a positive difference for busy teams. Let’s discuss how it can help and spotlight the risks you’ll become better at avoiding.
Increased Focus and Peace of Mind
Working with a reliable compliance team liberates chiropractors from stress, confusion, and paperwork, allowing them to dedicate greater attention to their patients. Outsourced teams also focus on observing your financial habits and can spot gaps and weaknesses you may be used to or too burned out to spot. There is nothing more stressful than wondering if you’re doing things right, and nothing is more calming than knowing you’ve done everything right.
Tighter Documentation, Coding, and Billing
Every claim your practice makes is now under the microscope of Medicare and other payers. The slightest error could result in devastating fees. For example, violating any HIPAA regulations could see your practice fined under the four-tier system, which may mean up to $50,000, even if the error was unintentional. (HIPAA Journal, 2023)
A Huge ROI
Many practice owners turn their noses up at outsourcing compliance, thinking it will be costly. However, paying for outsourcing is effectively a form of insurance; a fee that pales compared to the massive outlays that may become necessary without it. Moreover, some types of outsourcing help are ongoing, while others are a one-time assist. Either way, it’s a wise investment that can pay for itself many times. You also must consider the costs of not outsourcing. Let’s face it, compliance is negative and affects you and your staff’s attitude. It is a drain mentally, physically, and emotionally. Most likely, you didn’t hire staff to become compliance officers; you hired them to help you see more patients and become more profitable. Taking them away from patient care and service defeats the purpose.
A Smarter, Safer Staff
Outsourcing relieves the worry that you may be missing something in one of the three required areas of annual training: OSHA health and safety, HIPAA privacy and security, and fraud, waste, and abuse (FWA). In addition, outsourcing helps your team complete the necessary compliance steps and log them for your records.
The Right Balance Between Compassion and Compliance
Some practices offer free or discounted services to their patients. It’s a noble but vulnerable model depending on state-specific rules, provider agreements, insurer stance, and more. Outsourcing compliance means you’ll confidently navigate serious risks to do the right thing the right way.
Maintaining a compliance program in my office was a chore. Our compliance officer was not just a compliance officer but also a chiropractor. It didn’t take long for me to realize that the time, effort, and energy she spent not directly related to patient care cost my practice money.
I conducted an exercise to determine the net revenue per hour* my office generates. Completing this exercise allowed me to see that my doctors and staff could produce $380 per hour. Any time spent in my office not focused on tasks that generate revenue (patient care, etc.) is not the best use of our time. Estimating that she spent one hour per day (20 hours per month) on our compliance program, the cost to our practice was over $7,000 per month/$84,000 per year.
That realization led me to look at other options for my office. That’s when I hired a third party with a team of people trained and certified to manage our compliance program at a fraction of the cost of doing it myself. They handle the assessments, reviews, reports, and all our compliance needs.
I am a DIY guy at heart, and going through the process of establishing a compliance program in my office taught my compliance officer and me a valuable lesson. We don’t want to be responsible for all of that. Having someone else take responsibility for our compliance program took away the stress for us and allowed her to do what she does best — treat patients. That was when I realized that compliance doesn’t have to be complicated, it doesn’t have to be time-consuming, and we don’t have to do it all on our own.
Dr. Ray Foxworth is a president of ChiroHealthUSA, cofounder of ChiroArmor, and a former certified medical compliance specialist. He spent over 35 years in practice facing challenges with billing, coding, documentation, and compliance. He has served as president of the Mississippi Chiropractic Association, former staff chiropractor at the G.V. Sonny Montgomery VA Medical Center, and is a fellow of the International College of Chiropractic. To request a free Gap Analysis to see where you may be at risk with your compliance program, send an email to [email protected].
References
1. Blue Cross Blue Shield, (n.d.). Statistics. Retrieved from Blue Cross Blue Shield of Michigan: https://www. bcbsm. com/health-care-fraud/fraud-stati sties, htm l#: ~: text=The% 2 0National% 2 OHeath % 2 OC are % 2 OA nti, trillion%20in%20health%20care%20spending.
2. DOJ. (2019, January 23). Walgreen Co. agrees to pay S3.5 million to settle allegations under the false claims act. Retrieved from DOJ: https://www. justice.gov/usao-edwi/pr/walgreen-co-agrees-pay-35-million-settle-allegations-under-false-claims-act
3. HIPAA Journal. (2023, January 1). What are the penalties for HIPAA violations? Retrieved from HIPAA Journal: https://www.hipaajournal.com/ what-are-the-penalties-for-hipaa-violations-7096/
4. Jackson Lewis, P. (2018, November 20). Seven fundamental elements of an effective compliance program. Retrieved from JDSUPRA: https://www.jdsupra. com/legalnews/seven-fundamental-elements-of-an-51721/
5. Newell, J. (2021, February 18). Medical billing fraud unveiled with new, advanced technologies. Retrieved from Physicians Practice: https://www. plrysicianspractice.com/view/medical-billing-fraud-unveiled-witlr-new-advanced-technologies
6. Pifer, R. (2022, July 6). Feds brokered record S5B in healthcare fi'artd cases last year. Retrieved from Healthcare Dive: https://www.healthcaredive.com... news/feds-brokered-record-5b-healthcare-fraud-cases-last-vear/626628/
