Moving the HME Industry Forward

General Healthcare

Corporate Compliance Manual – Recommended Contents – Part 1 of 4

August 11, 2014

AMARILLO, TX – Federal law requires DME suppliers enrolled in Medicare to establish and implement a compliance program. Because the Department of Health and Human Services has not yet published regulations on such compliance programs, a Corporate Compliance Manual should be designed to follow guidance from the Office of Inspector General (OIG) and the Federal Sentencing Guidelines.

The Federal Sentencing Guidelines, published by the United States Sentencing Commission, while designed to help judges determine the degree of fault in sentencing decisions, set forth the elements that a compliance program should meet. Similarly, the OIG has published guidance for compliance programs implemented by DME suppliers.

This four part series discusses many of the important contents that should be included in Corporate Compliance Manuals. Part 1 discusses “Code of Conduct.” Part 2 discusses “Enforcement and Discipline” and “Compliance Program Operations.” Parts 3 and 4 discuss the multiple “Policies” that should be included in the manual.

The “Code of Conduct” section of the Corporate Compliance Manual should include a number of provisions, including the following:

Relationships with Physicians and Others in a Position to Influence Business
The Stark Law prohibits a physician from referring a Medicare patient to a provider with which the physician (or immediate family member of the physician) has a financial relationship – either an ownership interest or a compensation arrangement – for the furnishing of “designated health services” unless an exception applies. Designated health services include durable medical equipment, orthotics and prosthetics, outpatient prescription drugs and parental and enteral nutrition, among others.

The Medicare anti-kickback statute prohibits knowingly and willfully offering, paying, soliciting, or receiving, directly or indirectly, anything of value if the purpose is to induce the recipient to (i) refer, order, recommend, or purchase an item or service for which payment may be made under a federal health care program such as Medicare or Medicaid; or (ii) arrange for someone else to do so.

The anti-kickback statute contains certain exceptions. In addition, an arrangement does not violate the anti-kickback statute if the arrangement falls within a “safe harbor.”

The False Claims Act prohibits submitting a bill or other information to Medicare or Medicaid that is false or misleading. Specific knowledge of violations is not required. Failing to repay an overpayment within 60 days after it is identified can lead to false claims liability.

Federal law establishes Civil Monetary Penalties for certain actions, including violation of the Stark Law, violation of the anti-kickback statute, violation of the False Claims Act, violation of HIPAA privacy rules, and offering financial inducements to beneficiaries.

Conflicts of Interest
The employees should carry out their job responsibilities on the basis of what is in the company’s best interest and independent of personal considerations.

Receipt of Improper Payments
An improper payment includes cash or anything of value, such as goods and services, received or used for any unlawful or improper purpose or payment.

Use of Company Funds for Improper Payments or Gifts
The use of company funds for any improper payment should be prohibited. Any payment that is falsified or not reported in company books and records will be deemed to be an improper payment.

Employees and agents should keep all patient records confidential. Access should be restricted to authorized persons. No confidential information will be disclosed without proper consent.

Reporting Abuse
All incidents of suspected child or elder abuse, including physical and emotional abuse and financial exploitation, should be reported as required by applicable state law. In addition to reporting required by law, employees and agents should immediately report the matter to the Compliance Officer.

Physician Orders and Certificates of Medical Necessity
Only the attending/referring practitioner may provide a written order for goods or services provided by the DME supplier. The Affordable Care Act requires that a practitioner must conduct a face-to-face examination of the patient within six months prior to the date of a physician order for DME. Intake personnel must obtain physician orders and, when required, Certificates of Medical Necessity (“CMN”), from the attending/referring practitioner.

Billing Practices
Before a claim is submitted to a third-party payor, employees should verify that all applicable policies and procedures of the company and the third-party payor have been followed. Employees should review the payor’s coverage requirements and ensure that the company has received the necessary documentation.

Medical Records Documentation
Medical records documentation should meet the requirements of all applicable laws, regulations, accreditation standards, and Medicare quality standards. When payment is made by a third-party payor, medical records documentation should reflect the standards or requirements of the third-party payor or its outside review agents.

Company Property
Company property should be used to conduct legitimate company business and other company activities. Employees and agents should not use company property for personal reasons except as permitted by company policies and procedures or otherwise approved in advance by the employee’s supervisor.

Advertising, marketing and promotional materials should not contain any unfair, inaccurate, or deceptive statements or any exaggerated or unwarranted representations. Employees and agents should not use any advertising, promotional, or other tactics or materials that unfairly undermine the products or services of a competitor.

Education and Training
Training for employees should be conducted on a regular basis.

Investigations and Corrective Action
The Compliance Officer will investigate complaints and other information (including audit results) that suggest violation of law, regulation, or policy, in order to (i) identify the individuals involved, (ii) determine appropriate corrective action, (iii) implement those procedures necessary to ensure future compliance, (iv) protect the company in the event of civil or criminal enforcement actions, and (v) preserve and protect the company’s assets.

Jeff Baird and Louis Feuer will be co-presenting a webinar for AAHomecare on Thursday, August 14. See details below:
Innovative Marketing While Remaining Within Legal Parameters

Presented by:
Jeffrey S. Baird, Esq., Brown & Fortunato, P.C.
Louis Feuer, Dynamic Seminars & Consulting, Inc.

Thursday, August 14, 2014
2:30-4:00 p.m. EASTERN TIME

Sign up now for “Innovative Marketing While Remaining Within Legal Parameters” on Thursday, August 14, 2014, 2:30-4:00 pm ET, with Jeffrey S. Baird, Esq., Chairman of the Health Care Group of Brown & Fortunato, PC and nationally recognized marketing expert Louis Feuer of Dynamic Seminars & Consulting, Inc.

Contact Ika Sukh at if you experience any difficulties registering.

Member: $99.00    
Non-Member: $129.00

Jeffrey S. Baird, JD, is chairman of the Health Care Group at Brown & Fortunato PC, a law firm based in Amarillo, Tex. He represents pharmacies, home medical equipment companies, and other health care providers throughout the United States. Baird is Board Certified in Health Law by the Texas Board of Legal Specialization. He can be reached at (806) 345-6320 or