HEADLINES
Wednesday, July 14, 2010

• When “good” people do bad things — check your ethical culture
• GAO identifies strategies for CMS to prevent improper payments
• “Do Not Pay List” created to ensure payment accuracy
• Temporary testing and certification program established for electronic health records
• Nontraditional “family” hospital visitation rights proposed

• Healthcare Employers Under Attack: The Rise of Wage and Hour Class Action Lawsuits 
by William Schurgin, Kristin McGurn, and Noah Finkel

In addition to regularly featured columns such as electronic resources, HIPAA, best practices, coding and billing, and physician compliance, the July/August 2010 issue of the Journal of Health Care Compliance includes the following articles:

• State Offices of Medicaid Inspector Generals: Implications for Medicaid Fraud Enforcement, written by Jack Wenik, discusses the trend toward state Offices of Medicaid Inspector Generals, the implications for self-reporting and anti-fraud and waste efforts, and their effect on compliance programs.
• The Health Care Reform Bill: Compliance Implications for Behavioral and Mental Health Services, written by Dinh Nguyen, discusses the changes in the behavioral and mental health services climate and proactive approaches that can be taken to mitigate potential exposure to increasing regulatory liability.
• Medicaid Integrity Program - What You Need to Know, written by Joanne B. Erde, provides an overview of what to expect from a Medicaid Integrity Audit, including the establishment of a Medicaid Integrity Program (MIP) and how the MIP process works: from data review, through the audit, to recoupment.
• Medication Management for Medical Practices and Physicians, written by D. Scott Jones, discusses the prevalence of medication errors; how Medicare Part D has increased the focus on the prescribing practices and utilization of doctors; and additional regulatory scrutiny regarding CDC vaccine management guidelines, OSHA bloodborne pathogen standards, and FDA labeling requirements.

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Will “good” people do bad things if they are put in an environment that does not value ethics? The answer is “yes,” according to the “2009 National Business Ethics Survey (NBES)” conducted by the Ethics Report Center (ERC).

Six times since 1994, the ERC has performed a national poll of employees at all levels, exploring beliefs and experiences related to ethics and compliance. Over time, ERC research has indicated that the strength of a company’s ethical culture drives whether or not employees feel pressure to compromise company standards, the rate of observed misconduct, whether employees who observed misconduct chose to report it, and whether those who report feel retaliated against. Past ERC research has also found that ethical cultures are stronger during times of increased scrutiny, and are perceived differently by different kinds of employees. For example, ERC found that managers, nonunion workers, older workers, and tenured employees perceive a stronger ethical culture within their company; while nonmanagement employees, union workers, younger workers, and recent hires perceive a weaker ethical culture within their company.

Using NBES 2009 data, the ERC found the following:

• Ethical culture continues to have a profound impact on pressure, observed misconduct, reporting of observed misconduct, and rates of retaliation against reporters.
• Actions and perceptions of top managers drive the ethical culture of the company and have a significant impact on outcomes.
• Coworker culture is particularly powerful for decreasing observations of financial misconduct, but top management culture is associated with the greatest increases in reporting it.
• Although overall culture and coworker culture are on the rise, perceptions of management (top and supervisors) are declining.
• When it comes to strength of ethical culture, some companies (i.e., publicly traded, highly unionized, and those with more than 500 employees) are at an innate disadvantage.

ERC recommends that senior leaders wishing to improve their companies’ ethical cultures: (1) make developing a strong ethical culture a business priority; (2) lead by example; talk the talk and walk the walk; (3) develop programs that encourage ethics as a priority; (4) be mindful of what challenges are innate to your organization and find ways to help employees feel invested in the company; and (5) invest time in regular assessment and careful analysis.

The ERC survey report, titled “The Importance of Ethical Culture: Increasing Trust and Driving Down Risks,” is available from the Health Care Compliance Association web site at http://www.hcca-info.org.

Ethics Resource Center Report, 2009 National Business Ethics Survey, 2010.

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The Government Accountability Office (GAO) identified several key strategies for CMS to prevent fraud, waste, and abuse in Medicare. While CMS has made progress in implementing some of the strategies, there is still room for improvement.

One strategy was strengthening the provider enrollment process and standards to reduce the risk of enrolling providers intent on abusing the program. For instance, CMS should perform background checks on providers at the time they apply to become Medicare providers.

A second strategy identified by the GAO was to improve prepayment review of claims by having automated payment controls called "edits" in place that can deny or flag inappropriate claims. The GAO discovered that, despite its prior recommendation to CMS, CMS did not require its contractors to develop thresholds for unexplained increases in billing and use them to develop automated prepayment controls. However, CMS added edits to flag claims for services that were unlikely to be provided in the normal course of medical care.

The GAO’s third strategy was to focus postpayment claims review on the most vulnerable areas, which include HHAs and DMEPOS suppliers. The GAO discovered that CMS did not routinely provide physicians responsible for authorizing home health care with information that would enable them to determine whether an HHA was billing for unauthorized care. It was recommended that CMS direct its recover audit contractors to focus on items and services where contractors were not expected to focus their reviews, and where improper payments were known to be high.

A fourth strategy to combat overpayments was improving oversight of CMS’ contractors. The OIG observed that, while limited, CMS’ oversight of its programs has been expanding. For example, CMS was beginning to, among other things, revise its audit protocol and pilot on-site audits.

Finally, the GAO recommended that CMS develop a robust process for addressing identified vulnerabilities. Specifically, CMS should develop and implement a process to ensure that it promptly: (1) evaluates the findings of recovery audit contractors, (2) decides on the appropriate response and a time frame for taking action, and (3) acts to correct the vulnerabilities identified.

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"Do Not Pay List" created to ensure payment accuracy