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What are Compliance Plans and Why Do We Need Them?

on Monday, 23 February 2015 in Health Law Advisory: Zachary J. Buxton, Editor

Most health care entities have a compliance policy. However, in many cases, they don’t have compliance plans and are unaware of their usefulness.

Compliance plans are detailed plans setting out standards for compliance in specific areas or with respect to particular issues. Compliance plans may be standing and ongoing or time-limited in response to specific issues. They may also be called standard operating procedures. Compliance plans provide a necessary level of detail regarding standards for performing, documenting and billing for specific services. For example, a critical access hospital may have a compliance plan for home health or hospice. A nursing facility may have a compliance plan for SNF consolidated billing. A physician’s office may develop a compliance plan for “incident to” billing.

Whatever the subject, the compliance plan is used primarily as a communication and training tool to convey current standards essential for regulatory and billing compliance. The compliance plan may also be the standard against which records are reviewed and audited. Compliance plans provide critical information for those who deliver services as well as those persons primarily involved in coding and billing.

In addition, compliance plans have the added benefit of being a vehicle to “roll out” compliance to a departmental/unit level. Used this way, individual departments and units (or specific provider types such as home health or hospice) develop compliance standards based on pertinent statutes, regulations, Centers for Medicare and Medicaid manual sections and related guidance. In some cases, it may be necessary for the Compliance Officer and/or legal counsel to assist in the development of appropriate standards. Once a department or unit has prepared an initial compliance plan, it should be reviewed and approved by the Compliance Officer or Committee and regularly (e.g., every two years) reviewed and updated after that.

It is most efficient if compliance plans are and/or if they include a list of governing authorities. Specifying the authority on which the standards in the plan are based makes it quicker and more cost-effective to update the plan. When new standards or guidance are promulgated by payors or regulators, they should be added to the compliance plan and updated plans distributed to those with a need to know. Ideally, a compliance plan spells out the distribution list by department and title.

Finally, compliance plans can be effectively used as a corrective action plan following review of a compliance concern or audit. The corrective actions and standards are delineated in the compliance plan along with a procedure for monitoring/auditing and a time schedule—that is—how long will the billing and records in this area be monitored? When used as corrective action plans, compliance plans may be discontinued after a period of monitoring unlike ongoing or “standing” plans.

Consider adding compliance plans to your compliance programs for all of the beneficial purposes they serve.

Julie A. Knutson

1700 Farnam Street | Suite 1500 | Omaha, NE 68102 | 402.344.0500