ADVISORY e-ALERT     May 26, 2011 
Advisory Law Group, a Professional Corporation




I've noticed a marked increase in the number of compliance audits of client medical groups and hospitals at which clients practice.
As you're well familiar, healthcare compliance has become an industry. On the governmental side, over recent years we've seen an increased focus on compliance including the surge of Recovery Audit Contractor (known commonly as "RAC") audits, the imposition of mandatory physician compliance programs pursuant to the Patient Protection and Affordable Care Act, and astronomical whistleblower lawsuits.
I believe that the nature of compliance is changing with the economy and with the political winds.  First, compliance auditing and monitoring, which was initially for the purpose of assuring compliance itself, has become a revenue source.  Second,  although the federal and state governments have talked a good game as to the seriousness of compliance, they were not previously aggressive in ferreting out actual fraud.  The pendulum is swinging the other way now and it is highly likely to continue in that direction for the foreseeable future.
The Three Routes
Medical groups have available three general routes to take in response to this renewed effort to ferret out overpayments and to fine you. 
The first route is to do nothing.  Once the compliance program regulations under the Patient Protection and Affordable Care Act are in place and the deadline for adoption and maintenance of a compliance program arrives, failing to maintain a program will itself be a compliance violation rendering your group ineligible to participate in federally funded healthcare programs - in other words all of your Medicare and Medicaid billings will be fraudulent. Not a good route to take but one that we will probably see some groups take nonetheless.
The second route is to engage in compliance efforts to the minimum standards imposed by law.  This would include adopting a mandated compliance program but more or less simply moving through the steps with no real change in attitude.
This second route is probably the one that most of your competitors will take.  They'll regard compliance programs as "an aggravation" and a cost to be endured. That viewpoint is entirely consistent with the fact that most medical groups are purely tactical (i.e., purely reactive) to business events.
However, the most successful groups are strategic. They have an overall business strategy, carry through with consistent substrategies and deploy coordinated implementing tactics. Strategy is the filter through which their actions and activities are focused.
Those groups will go the third route
Yes, one purpose of a mandatory compliance program is to assure qualifications for participation in government health care programs.  Another is to reduce the chances for errors that lead to auditing or prosecution. And, the existence of an operating compliance program that conforms to federal sentencing guidelines will help to reduce the consequences of criminal conviction.  Each of these purposes is a "pure" compliance program goal and the most strategic groups will incorporate them in designing and implementing their compliance programs.
But when viewed strategically, your compliance program becomes a tool for you to do more than simply assure "compliance for compliance's sake." It is a pivot point around which you can improve your group's financial performance.
For example, the framework of your program can be used proactively to examine and optimize the billing and coding process, minimize billing mistakes, drive faster completion of billing materials and speed of the billing cycle, examine the efficiency of outsourced or in-house billing and collection operations, and examine options for post-billing service collections.
A compliance program also is a pivot point around which to design additional business relationships. In this light, compliance prohibitions are highly useful "negative guides" for what can be done.
One of the core principles of business most often ignored in practice (and almost always ignored by practices) is the advantage of leverage, a business multiplier.
You are going to be forced to have a compliance program.
You are going to be forced to expend the funds and devote the time and effort necessary to establish and operate it.
Obtain leverage by using that same program and the funds, time and effort in a strategic, proactive and profitable way, instead of simply treating them (begrudgingly) as efforts and expenses to be tolerated.
Call or email me to begin creating this leverage now.
How Hospital-Based Medical Groups Can Profit From Increased Compliance Pressure Placed On Hospitals




All Things Personal


There's a restaurant in Santa Barbara that prides itself on team service - you don't have a waiter, you have a whole team of waiters who pitch in to deliver the experience and, presumably, share the tips.


I wasn't enamored of the concept when I heard about it and I certainly wasn't after our salads went missing and our drinks never arrived.  "Oh!" said the first server.  "Gee!" said the second.  "I don't know," said the third, "but we'll take it off your check."


If sharing in pooled compensation doesn't motivate waiters, why would anyone think that "sharing in the savings" or in the "rewards" of meeting quality objectives will motivate physicians and hospital employees within an ACO?


The same applies to physician group compensation plans:  It's a very, very rare event for a plan that pays all physicians an equal share to actually motivate the entire group to generate the most profit and to deliver the highest service.  Rather, the game usually changes -- fast -- to one of gaming the system.


If everyone is accountable, no one is accountable.  If everyone shares the profit equally, there is no profit in extraordinary performance.


Designing and implementing the right compensation plan for your group and taking it across the lines of your shareholders or partnership agreement and of your owner and employee/subcontractor work agreements requires tremendous planning and expertise.  The goal is to achieve the balance between the teamwork that's required to deliver a consistently high experience, while preserving the personal profit motive necessary to accomplish it.


It's not easy, just required.  After all, I'm still waiting for my salad, and I'm thirsty. 





How to Navigate The Tide of Aggressive RFPs, published in the April 2011 issue of Anesthesiology News.

Harnessing the Effects of Group Pressure In Hospital Negotiations: Find Your Buddy, originally published in Anesthesiology News, was reprinted in the April 2011 issue of Pain Medicine News. 


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ADVISORY LAW GROUP, a Professional Corporation

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The materials presented in this Advisory e-Alert are educational only and are neither legal advice nor a substitute for it. Advisory e-Alert presents a general discussion which may or may not apply to your particular legal or factual circumstances. The distribution of Advisory e-Alert is not intended to create, nor does it create, an attorney-client relationship. Please do not send us confidential information without receiving explicit authorization from Advisory Law Group to do so. Do not take or avoid taking any action as a result of the materials presented in this e-Alert without first obtaining legal counsel.   
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In This Issue
How To Profit From Mandatory Compliance
Videocast: Profiting From Increased Compliance Pressure on Hospitals
All Things Personal
Recently Published Articles
The e-Alert Archive
2011 Anesthesia and Radiology Business Updates Now Available
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You're a physician who wants to form a medical group and, among other things, subcontract with or employ other physicians, enter into exclusive contacts, obtain significant stipend support money, create related entities to increase protection and the like. And you want to come up to speed on all of this immediately.

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