Moving the HME Industry Forward

General Healthcare

Corporate Compliance Manual Recommended Contents – Part 3

August 25, 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 discussed “Code of Conduct.” Part 2 discussed “Enforcement and Discipline” and “Compliance Program Operations.” Parts 3 and 4 will discuss the multiple “Policies” that should be included in the manual.

The “Policies” section of the Corporate Compliance Manual should include the following (note that I am only providing brief descriptions of the policies; the actual policies are much longer):

• Auditing: To assure compliance with law and policy, the corporate compliance department will perform regularly scheduled audits on a quarterly basis, as well as periodic targeted audits as directed by the Compliance Officer.

• Background Screening: The Human Resource Officer, through the use of a third party vender (“Background Check Company”) will make reasonable inquiry into the background of prospective employees and agents who exercise substantial supervisory authority or who exercise substantial discretion within or on behalf of the company.

• CMNs and DIFs: A Certificate of Medical Necessity (“CMN”) must be completed by the patient’s physician, the physician’s staff, or other authorized clinician in order to obtain Medicare reimbursement.

The DME Information Form (“DIF”) may be completed by the company.  Employees should contact the patient’s physician or authorized person if there is any question regarding the information requested on the DIF.

• Claim Review: The company will not submit a claim to any payor until it has been reviewed and approved for completeness and accuracy.  In addition, supporting documentation should be reviewed to assure that the items or services have been provided to the patient.

• Conflict of Interest: Employees are required to properly report any actual or potential Conflict of Interest to the Compliance Officer.  When reporting an actual or potential conflict, employees must truthfully disclose all relevant facts and circumstances.

• Electronic Surveillance: The company will not use any electronic, mechanical or other device to intercept the contents of any telegraphic, telephonic, facsimile, modem-transmitted or other electronic communication, unless both of the parties to the communication consent to the interception.

• Enforcement: Imposition of disciplinary action is at the sole discretion of the company and will be made based on consideration of all of the relevant facts and circumstances of a particular situation, including whether a person involved in a Compliance Incident promptly reported the matter, the degree of the person’s cooperation and the nature of the person’s conduct.

• False Statements: It is improper for an employee or agent to make false statements or conceal material facts in any communication with company representatives in connection with the conduct of company business or other activities, including employment or employee benefit applications and any other reports or filings.

• HCPCS Coding: The HCPCS code that most accurately describes the item provided or service rendered will be used on all bills.  Intentional up coding is a violation of the law and will not be tolerated.

• Improper Payments: An Improper Payment is defined as cash or anything of value, including goods and services received or used for any unlawful or improper purpose of payment, including bribes, kickbacks, payoffs or any other payment made in violation of applicable laws or regulations for any other improper purpose.

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, HME 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