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Healthcare Billing Compliance: What Hospital Directors Need To Know

Lynette Byrd
Attorney Lynette S. Byrd
Healthcare Team Lead
Former Federal Prosecutor

Today, hospitals and healthcare directors are adapting to a post-COVID-19 world. During the height of the pandemic, hospitals had to provide care and staff their workforce while continuing to enforce all the standard compliance procedures and policies. While the worst of the crisis is over, administrators and directors still need to ensure their facilities adhere to state and federal compliance laws.

While the world may have changed after the pandemic, one aspect remains the same. Hospitals must implement procedures and protocols that are compliant with all federal regulations, especially for billing. Failing to do so may result in inquiries from federal authorities, including:

  • U.S. Department of Health and Human Services
  • U.S. Department of Justice
  • Medicaid Fraud Control Units
  • Medicare and Medicaid Auditors
  • State and Federal Authorities

When you must stay compliant with your hospital’s billing practices, you need professional guidance to help you stay up to date with all state and federal laws. Turn to the team at Oberheiden P.C. to learn how your facility can remain compliant with these regulations.

Hospital Billing Compliance in 2023: A Comprehensive Overview

All hospitals want to remain compliant with both state and federal laws. For one, it prevents unnecessary legalities and investigations that could arise from non-compliant practices. Remember that billing is not the only focus for many hospitals. It is just one piece of a fully comprehensive compliance program.

However, billing is one area many hospital administrators and directors struggle with, especially when it comes time to implement and enforce these procedures and programs. Hospitals must remain vigilant so that they do not expose their facility to any liabilities, which could result in losing their eligibility in many federal programs. You must scrutinize these billing procedures to comply fully with all federal regulations.

Stay Compliant With Hospital Billing

Unfortunately, there are several ways a hospital can face legal issues in the healthcare space. Any discrepancies concerning billing are at the top of the list. Simple billing mistakes could trigger a wide range of penalties, fines, and consequences, often leading to federal criminal investigations stemming from accusations of healthcare fraud. Hospitals must target these specific areas to make their billing compliance processes more manageable.

1. Medicare and Medicaid Billing Compliance

Any hospital that relies on federal healthcare benefit program reimbursements must have strict billing compliance. While every program will have its own set of regulations and rules, it is vital to remember that all federal programs are subjected to oversight from a wide range of federal authorities. Most of the focus remains on ensuring accurate coding within the facility. Still, hospitals need to address several other areas of compliance that could be the center of a federal inquiry.

2. Tricare, DOL, and Other Federal Benefit Program Billing Compliance

Federal payors have their own unique set of regulatory requirements that hospitals must understand for their billing practices. Tricare compliance has been a significant issue in recent years, with federal healthcare law enforcement investigations centering on those programs. Hospitals that bill through the Department of Labor, Tricare, or any other federal payors need to ensure their billings will qualify for reimbursement through these programs.

3. Private Health Insurance, PPO, and HMO Billing Compliance

Federal healthcare benefit programs are just some of the ones with strict billing requirements. PPOs, HMOs, and private health insurance groups can also dictate reimbursement rules. These organizations will ensure that hospitals adhere to their procedures and regulations. Private healthcare billing compliance is one of the top issues for many hospitals throughout the country.

4. Billing for Telemedicine and Telehealth Services

During the pandemic, the need for accessible healthcare was a significant concern, leaving many providers searching for a way to treat patients safely. Since then, the demand for telemedicine and telehealth services has remained high. While insurers have relaxed a few billing rules for a short time, there has been a focus on more stringent compliance. Before the pandemic, telemedicine and telehealth billing was already an area of focus for federal agencies. However, these investigations have increased with the pandemic passing as officials tighten down on these billing practices.

5. Prescription Billing Compliance

Many hospitals can find themselves in trouble when it comes to prescription billing. Medications need to be authorized and must be billed according to a set of specific guidelines. Since many hospitals have their own in-house pharmacy, it can lead to other concerns involving pharmacy compliance.

6. Stark Law and Anti-Kickback Statute Compliance

Most hospitals maintain a professional relationship with their practitioners and doctors, but there is always the concern with Stark Law and Anti-Kickback Statute compliance. Whether the hospital knowingly or unknowingly billed Medicaid or Medicare for services provided by a professional with a financial attachment to the hospital, it can result in a federal investigation for healthcare fraud.

7. Stay Current on Billing Rules, Regulations, and Requirements

It is crucial to remember that all healthcare payors, whether private or federal, will routinely update their billing regulations and rules. While most of the updates are small, some significant changes can affect the compliance of a hospital’s billing program. Hospitals must continuously monitor for changes and implement new practices to remain compliant with these programs.

The Consequences of Improper Billing

Hospitals can find themselves in legal trouble with federal authorities. Healthcare fraud is estimated to cost the government >at least $68 billion each year. With those numbers, federal prosecutors throughout the United States aggressively look for any sign of healthcare fraud. They will use sophisticated computer fraud detection programs and federal investigators to look for any “outlier,” such as billing for:

  • Unnecessary services
  • Services not provided
  • Unreasonably high level of care
  • Mutually exclusive services
  • Services not covered
  • Out-of-network services

Federal agencies are serious about investigating these crimes, and with all that scrutiny, hospitals cannot afford to make a mistake. All administrators and directors must ensure they do not violate any of these laws, regulations, and statutes.

When you need assistance with hospital billing procedures, contact the legal team at Oberheiden P.C. We will help you establish the proper billing procedures and protocols that meet all federal and state compliance laws, helping to shield you from a criminal investigation.

Billing Compliance Risks for Hospitals

Whether you are developing or customizing your hospital’s compliance procedures or policies, you need to make sure all those efforts are tailored to meet your facility’s unique risks. While there are always general risks to consider, specific problems will need to be addressed to avoid federal violations. These compliance risks include:

Lack of Medical Necessity

All payors require evidence to justify the hospital’s payment requests. Sometimes, federal enforcement officials and auditors can second-guess those requests and the need for medical treatment.

Inadvertent Coding Errors

Mistakes can happen, but when there are numerous coding errors, they can pique the attention of federal investigators. Hospitals must make sure they are submitting accurate bills with the proper codes. Otherwise, your facility may be subjected to a billing fraud audit or investigation.

Pattern of Overbilling

Along with a history of coding errors, hospitals that overbill could face penalties and federal enforcement action. When these incidents occur, it could be mistaken as a pattern of failing to maintain compliance.

Inadequate Compliance Protocols

When hospitals establish billing compliance programs, they often fail to implement them properly. Federal investigators and compliance officials want to see documented proof that all protocols are being followed. Also, there needs to be evidence that workers are trained to adhere to these procedures.

Lack of Internal Compliance Oversight

All hospitals should have compliance officers who provide internal oversight of their policies. Compliance officers must independently assess the facility’s compliance efforts and be free to report any positive or negative findings to hospital administrators or directors.

Unlawful Financial Relationships, Rebates, and Incentives

You must carefully examine any third-party relationship in the healthcare industry. Even an innocent acceptance of program-reimbursed funds from an unauthorized source could be construed as billing fraud. In turn, that can lead to substantial fines and penalties under the False Claims Act.

Intentional Billing Fraud

While all the previously mentioned risks could be deemed as a mistake, intentional billing fraud is another issue. Hospitals should never intentionally falsify records, inflate billing requests, or upcode services. Should this occur, the compliance program must be able to monitor for red flags and take the appropriate action.

Hospital Billing Compliance Program

Hospital billing compliance is essential to avoid strict penalties and fines from the federal government. All directors must devote time and resources to ensure these simple mistakes do not happen at their facility. Hospitals need to pay attention to these four components to establish an effective billing practice:

  • Documentation
  • Implementation
  • Execution
  • Enforcement

Reach Out To Our Healthcare Billing Compliance Lawyers at Oberheiden P.C.

All hospitals must be compliant with federal laws and regulations. Oberheiden P.C. can help protect your facility from inquiries, audits, and investigations. We have represented clients facing federal criminal charges and investigations. However, the first step is ensuring your billing complies with all federal laws.

If you are wondering whether your hospital’s compliance program is efficient, schedule a consultation with a senior healthcare billing compliance attorney at Oberheiden P.C. Call us at 888-680-1745 or fill out the contact form today.

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