LIMA MEMORIAL HEALTH SYTEM POLICY 930
TITLE: CORPORATE COMPLIANCE/FRAUD AND ABUSE OVERVIEW
Lima Memorial Health System (Lima Memorial Hospital and Lima
Memorial Professional Corporation) Compliance Plan was developed in
May of 1998. It's purpose was to institute internal controls which
promoted adherence to federal and state laws which would prevent
fraud, abuse, and waste in our health care system.
I. BENEFITS OF THE PLAN
II. ESSENTIAL ELEMENTS OF THE PLAN
- Demonstrates a commitment to honest and responsible corporate
- Provides an accurate view of Associate and contract behavior
related to fraud and abuse.
- Identification and prevention of criminal and unethical
conduct. Tailors compliance to the system's specific needs.
- Improves the quality of patient care.
- Creates a centralized source for distribution of
- Develops a methodology that encourages Associates to promptly
report potential problems.
- Develops procedures for investigating alleged misconduct, and
initiating immediate and appropriate corrective action.
- Reduces the hospital's exposure to damage, penalties, and
sanctions by early detection and reporting.
- Written standards of conduct -- language has been added to
include the failure to report a suspected fraud and abuse problem
as grounds for disciplinary action.
- Designation of a Chief Compliance Officer (CCO) - Lima Memorial
hospital's Medical Records Director, Anita Good, as well as
- Education and training programs -- Computer Based Training,
Compliance policies and procedures, special education for coders,
billers and those entering outpatient orders or answering the
- A process to receive complaints while protecting anonymity - A
hospital Compliance hotline has been created. A call can be made to
the hotline, 998-4499, which is a non-caller ID line, and the
person making the call will remain anonymous. OPI's may also be
used to report problems.
- A system to respond to allegations -- Allegations are forwarded
to the Compliance Officer for investigation, action and follow-up.
The problem may be assigned to the department Director or to an
- Audits to monitor compliance and reduce problems -- Each member
of the Compliance Committee must turn in audits performed in his/
her department to show that risk areas are being monitored and
problems are being identified, reported and corrected.
Corporate Compliance Committee Members include members of
Administration and the senior management team.
- Investigation and remediation of problems -- There is
investigation and remediation of problems through the monitoring
process, as well a follow-up from Hotline calls and Opportunities
- Exclusion of sanctioned individuals -- Before hiring, a check
is made to assure that the individual has not been sanctioned by
- Reopen lines of communication and enforce discipline
- Corporate Compliance Committee Members include members of
Administration and the senior management team.
- Leadership must be knowledgeable about the content &
operations of the program.
- Governance must be similarly knowledgeable and exercise
oversight of implementation &
effectiveness of the compliance program.
- High level responsible persons for compliance must report
directly to governance re: effectiveness and operations of the
compliance program on at least an annual basis.
- Knowledge to include: Major risks of unlawful conduct, Primary
compliance program features to address those risks, and Types of
compliance problems encountered.
- Exercise effective oversight by: Proactive information seeking
in regard to compliance problems, Evaluating information received,
Monitoring implementation & effectiveness of responses to
IV. RISK AREAS
Hospital Risk Areas:
Physician Practice Risk Areas:
- Billing for items or services not actually rendered
- Providing medically unnecessary services
- "DRG creep"
- Outpatient services rendered in connection with inpatient
- Teaching physician and resident requirements for teaching
- Duplicate billing
- False cost reports
- Billing for discharge in lieu of transfer
- Patients' freedom of choice
- Credit balances-failure to refund
- Hospital incentives that violate the anti-kickback statute or
other similar federal or state statute or regulation
- Joint ventures - Financial arrangements between hospitals and
- Stark physician self-referral law
- Knowing failure to provide covered services or necessary care
to members of a health maintenance organization
- Patient dumping
IV. WHAT EVERYONE SHOULD KNOW
- Coding and billing
- Reasonable and necessary services
- Improper inducements, kickbacks, and self-referrals
Failure to comply with federal and state regulations can result
in severe penalties to the hospital. Financial penalties can reach
$10,000 per false claim submitted, up to $290,000,000, and the
hospital could lose it's certification to care for Medicare and
Individuals can have fines and prison sentences imposed.
Specific Laws Everyone Must Be Aware Of:
Stark I and II - A law which prohibits physicians from referring
a patient to a provider of designated health services, if the
physician has a financial relationship with the provider.
Medicare Anti-Kickback Statutes - Makes it a crime to solicit or
accept payment or other compensation knowingly and willfully for
referring the patient to another provider of health services for
which payment may be made in whole or in part by the Medicare or
Medicaid programs. Also makes it a crime to offer such a payment to
induce such a referral.
Private Inurement - Prohibits all non-profit organizations from
paying more than a "reasonable" compensation to a private
individual or entity from which it purchases services or items.
Also prohibits the provision of items or services for less than
market value. False Claims - Makes it a civil, as well as criminal
offense, to knowingly present a false claim to the United States
Ohio Fraud and Insurance Fraud - Knowingly making false
statements involving the proceeds of an insurance policy, and
presenting, or causing to be presented, to an insurer any known
false statement in a claim for payment.
IV. WHAT CAN BE DONE
Everyone must first know about the Compliance program. This
program directly relates to LMH's mission and values in that it
requires all Associates to adhere to the highest moral and ethical
standards, as reflected to the Standards of Conduct.
We Must Also Be Sure That:
- Coding accurately reflects the procedures performed and/or
diagnosis as documented.
- Billing must be consistent with Medicare/Medicaid rules
- Documentation must reflect the patient's condition, as well as
procedures performed and treatments received.
- All charges must be substantiated with physician orders,
medical necessity, and medical services provided.
- Claim submission and cost reports must be completed according
to Medicare/Medicaid rules.
- Contracts must be at fair market value. Any remuneration to
physicians must not be based upon referrals, or be used to induce
Report suspected violations immediately. Examples of activities
which should be reported (not inclusive) are as follows:
To report a suspected violation:
- Billing for services or items not provided or duplicate
- Medically unnecessary services
- Coding inaccuracies or DRG inaccuracies
- False cost reports
- Unbundling charges
- Violations of anti-kickback statutes
- Report to your unit manager or director, OR
- Call the Compliance hotline at (419)998-4499, OR
- Report to the Compliance Officer, at 226-5050, OR
- Use the Opportunity for Improvement form
REMEMBER: The Hotline is confidential and the law prohibits