By this time, many suppliers have accepted that audits are a part of the new normal. The last 5 years or so have seen the DME industry transition from an environment of minimal risk to an environment of increasingly strict regulatory oversight with heightened vulnerabilities. It started with competitive bidding, and accreditation, and then surety bonds, and now the audits. The increased funding for Program Integrity activities has seen private companies like HP, NCI Holdings, Northrup Grumman, and Verizon to be awarded hundreds of millions of dollars in contracts with CMS to perform program integrity functions. Some of these organizations are working on predictive modeling technology to identify potentially fraudulent claims on the front end and stopping them, much like the credit card companies currently do very successfully. CMS is finally migrating away from the pay and chase model so frequently and deservedly criticized. This is a positive step in the right direction but more money being dumped into Program Integrity means more auditors conducting more audits.

There are still plenty of reactive audit entities, like the DMACs, RACs, and ZPICs performing audits on a regular basis. It is not uncommon for the DMAC and RAC audits to identify error rates ranging between 75 – 90%. Is it unrealistic for CMS to believe that 85% of all individuals receiving oxygen, prosthetic leg, or a hospital bed do not need that equipment? I think so, but that is essentially what we’re being told. Perhaps it’s the complex payment policies and strict adherence to them that are the real culprit in these inflated error rates. The ZPICs are getting paid a significant amount of money to identify fraudulent or abusive activity; however, we find them uncovering minor technical errors or omissions and holding suppliers accountable for poor physician documentation.

Regardless, the increased number of audits and significant denials have highlighted multiple problems within the Medicare system that need to be addressed and suppliers should take a more proactive role in seeking resolution. The Senate Finance Committee seemingly understands that there are problems with the Program Integrity workload and solicited comments from industry stakeholders last year. On January 11, 2013 , an article posted on www.thehill.com had Sens. Tom Carper (D-Del.), Tom Coburn (R-Okla.), Max Baucus (D-Mont.) and Orrin Hatch (R-Utah) questioning the effectiveness of anti-waste and fraud-prevention efforts for Medicare. The van Halem Group drafted a White Paper for submission to the Finance Committee’s request. A complete copy can be found at http://www.vanHalemGroup.com. All of these issues have seen significant workload increases for an already burdened appeal process. Now, suppliers are waiting a year or more to get claims processed through the Medicare appeal process. This whole process was revised back in 2005 in an effort to reduce the amount of time it took to navigate, only to see amount of time increased right back to previous levels thanks to the increasing number of audits. We urge the supplier community to contact your elected representatives to highlight these issues and problems and demand more accountability and oversight of CMS contractors. Working together with the provider community, CMS can develop consistient auditing principles.

That being said, suppliers must also play a role in the process. Whether we agree with them or not, the reality is that CMS makes the rules and if we are going to accept their money, we must take the appropriate steps to make sure we follow them. Rightfully so, CMS wants to do business only with the most compliant of organizations. In this current environment, a supplier must have a sound compliance program in place to assure that the claims they submit for payment are accurate and appropriate. As a

participant in the Medicare program, suppliers share in that responsibility. As far back as 1999, the OIG said suppliers that do not have a compliance program in place could be considered negligent should problems arise. More recently, the Affordable Care Act has mandated that all suppliers implement a comprehensive compliance program that meets government standards. Suppliers can easily expand on their current compliance requirements implemented through your accreditation and use the Program as a tool to protect your business, increase efficiency, provide better quality of care and protect the Medicare Trust Fund. While CMS has a lot of room for improvement, it’s not the only responsible party. Suppliers who implement proactive internal controls and compliance protocols will be better suited to survive this new normal. A supplier that regularly conducts internal audits, in the same manner as Medicare, and uses the result of those audits to conduct ongoing education and training will be a more compliant and efficient organization. It also increased the likelihood that errors made are identified quickly and corrected to avoid additional issues and actions.

In order for your compliance program to be deemed sufficient, you must implement 7 elements. These include:

1. Implementing written policies, procedures and standards of conduct;
2. Designating a compliance officer and compliance committee;
3. Conducting effective training and education;
4. Developing effective lines of communication;
5. Enforcing guidelines through well publicized disciplinary guidelines;
6. Conducting internal monitoring and auditing; and
7. Responding promptly to detected offenses and developing corrective action.

The savvy supplier stays ahead of the curve. Implementing a compliance program is a sound business decision that will improve your business, lessen your overall risk, and protect the Medicare Trust Fund at the same time. It’s a win-win situation for all involved. Companies that have made the commitment to compliance have fewer issues with audits and denials as a result. Now is the time to be proactive.

HC Comply, a division of The van Halem Group, LLC, has affordable monthly compliance packages designed for small to medium independent suppliers that will help you implement the seven elements described above. Most importantly, these packages assure that compliance will remain a priority within your organization and become an integrated and continuous part of you operations. For more information, visit www.HCComply.com or www.vanHalemGroup.com or call 404-343-1815.