Are You Prepared?: Compliance Programs for Health Care Providers Now Mandatory

April 2012 (No. 1)


The days of voluntary compliance plan adoption are rapidly drawing to a close. The Patient Protection and Affordable Care Act (PPACA), enacted on March 23, 2010, mandates that health care providers enrolled in Medicare and Medicaid adopt a health care compliance plan. Even if the Supreme Court throws out the entire PPACA, this provision is almost certain to be reenacted.

The relevant section of the PPACA, section 6401, specifically provides that health care providers must establish a compliance program that contains certain "core elements" as a condition of enrollment in government programs.

Under the PPACA, the Secretary of Health and Human Services (HHS), in consultation with the HHS Office of Inspector General (OIG), is required to define what are "core elements." HHS still has not issued regulations defining these "core elements," which will vary according to the type of health care provider. However, it is important to note that nursing facility providers are subject to section 6102 of the PPACA, which expressly provides eight required components for compliance programs. Nursing facility providers are also forewarned that HHS was required to issue regulations outlining additional requirements by March 23, 2012.1

Health care providers currently without compliance plans meeting the criteria in the Sentencing Guidelines should adopt programs as soon as possible. Compliance plans enable providers to avoid or mitigate the significant penalties associated with violations of existing health care regulations. Enforcement initiatives against health care providers are also ever-increasing, particularly with respect to Medicare Fraud. Further, the OIG has placed increased emphasis on compliance programs. This is evidenced by the recently released online podcast "Tips for Implementing an Effective Compliance Program" as well as the OIG's FY2012 Work Plan. The Work Plan identifies compliance-related action areas such as claim accuracy, review of nursing home incorporation of compliance plans into operations, and provider training.

Even without official identification of "core elements" for compliance plans, it is doubtful that HHS will stray from previously issued guidance materials2 or PPACA section 6102 in its regulations for other types of providers. Section 6102 and OIG guidance materials consistently cite the following as basic elements for inclusion in provider compliance programs:

  • Establishment of written compliance policies and procedures and distribution to employees.
  • Designation of a specific individual or individuals to monitor compliance (i.e., compliance officer and/or compliance committee).
  • Commitment to conducting formal training and education programs.
  • Development of internal system for communication of suspected compliance violations.
  • Commitment to auditing and monitoring to evaluate compliance and identify potential problematic areas.
  • Maintenance of disciplinary policies which are consistently enforced.
  • Development of process for investigation of suspected violations and reporting to the government and law enforcement authorities when necessary.

Health care providers which have yet to adopt compliance plans should utilize these elements as the foundation for their new programs.

If you have not yet established a compliance plan or if you have questions regarding whether your compliance plan meets the criteria of the HHS or the Sentencing Guidelines, please contact Nicholas C. Harbist, Esquire.

  1. At this writing, the HHS had not issued these regulations.
  2. See, e.g., OIG Compliance Program for Individual and Small Group Physician Practices, 65 Fed. Reg. 59434 (Oct. 5, 2000); Publication of the OIG Compliance Program Guidance for Hospitals, 63 Fed. Reg. 8987 (Feb. 23, 1998); Department of Health and Human Services-Centers for Medicare & Medicaid Services, Compliance Program Guidance for Medicare Fee-For-Service Contractors (March 2005).

Notice: The purpose of this newsletter is to review the latest developments which are of interest to clients of Blank Rome LLP. The information contained herein is abridged from legislation, court decisions and administrative rulings and should not be construed as legal advice or opinion, and is not a substitute for the advice of counsel.