Medical Billing: the Lights are on But is Anyone Home?

By: David George

Medical billing outsourcing, also known as third-party medical billing, is regulated by the Office of the Inspector General (OIG). The OIG was created by Congress through the Inspector General Act of 1978 in response to a series of government scandals that occurred within nearly every major Federal Agency throughout the 1960s. Lawmakers believed that by creating an independent Office of Inspector General for each Federal Agency; the government would be better able to detect fraud and prevent the waste and abuse of Federal taxpayer monies. The hope was that these Federal watchdogs would reestablish the public's confidence in government agencies.

The Office of the Inspector General, in conjunction with the U.S. Department of Health and Human Services, developed and released the Compliance Program Guidance for Third Party Medical Billing Companies on November 30, 1998. The intent of this program is to promote a higher level of ethical and lawful conduct throughout the entire health care industry; and to protect the solvency and stability of the Medicare Trust Fund (also known as Medicare).

Before we go on any further don't get the impression that the U.S. Department of Health and Human Services (HHS) carries some sort of grudge against or questions the validity of medical billing outsourcing services. Prior to the Compliance Program Guidance for Third Party Medical Billing Companies was established, the HHS had already issued compliance programs for the clinical laboratory and hospital industries as well as home health care agencies.

The legislation comes in response to the proliferation of medical billing out sourcing companies throughout the health care industry; the undo influence these medical billing services could have on a physician's billing and coding practices; and the potential negative effects of unscrupulous billing and coding practices by these medical billing services on Medicare.

Like most OIG-issued compliance programs, conformity to the Compliance Program Guidance for Third Party Medical Billing Companies is strictly voluntary. On other hand, issues that arise due to a failure on the part of the medical billing service to abide by these "voluntary" compliance programs could expose the billing service to legal actions brought on by the U.S Government. Protect yourself and your business by interpreting "voluntary" as "mandatory" or be prepared to suffer the consequences.

The OIG has identified seven fundamental elements to an effective compliance program. They are:

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 standards through well publicized disciplinary guidelines;
6.Conducting internal monitoring and auditing; and
7.Responding promptly to detected offenses and developing corrective action.

In future articles I will continue to explain the Compliance Program Guidance for Third Party Medical Billing Companies in plain English so you can take the steps necessary to protect your medical billing service from unwanted government intervention.

If you are a health care professional outsourcing to a medical billing service you too should be interested in this program. Ask your medical billing service to provide you with documentation showing the steps they take to insure compliance to this very important program. Be a smart business owner and protect your practice from unwanted government action.

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