July 17, 2000
Office of Inspector General
The Association of American Physicians and Surgeons ("AAPS"), a national organization representing approximately 4,000 physicians in all specialties, was founded in 1943 to preserve and promote private medicine. We submit the following comments regarding the proposed "Draft OIG Compliance Program for Individual and Small Group Physician Practices," published in the Federal Register on June 12, 2000 (Volume 65, Number 113).
Section II.B.2 – Policies and Procedures.
AAPS objects to the proposal that "written policies and procedures are essential to all physician practices, regardless of size and capability." 65 F.R. 36821. Very small physician practices – those consisting of only one or two physicians – cannot afford the bureaucratic costs of developing and maintaining custom "written policies and procedures" for complying with numerous federal regulations. Nor is there any need for such custom written policies and procedures – in small offices the knowledge is efficiently acquired over a period of time rather than voluminously documented.
Moreover, the ever-changing nature of the applicable federal regulations renders obsolete and unusable written policies and procedures for compliance. CPT coding rules are modified monthly by the American Medical Association ("AMA"), and carrier coding requirements change frequently as well. Requiring a written policy for coding creates the risk of reliance on outdated coding rules over time, thereby causing errors.
Finally, there is no evidence that actual fraud – which requires knowledge and intent to defraud – would be minimized by having written policies and procedures for compliance. Those determined to commit actual fraud will continue to do so regardless of what is written. AAPS vigorously objects to the creation of any inference that a lack of written policies and procedures would somehow be evidence of fraud.
Section II.B.4 – Retention of Records.
AAPS objects to the proposal that "[w]hile conducting its compliance activities, as well as its daily operations, a physician practice should document its efforts to comply with applicable Federal health care program requirements. … A log of oral inquiries between the practice and third parties, such as carrier representatives, will help the practice document its attempts at compliance." 65 F.R. at 36824. This proposal that small medical practices create logs to document daily conversations imposes an unacceptable burden. This proposal establishes a level of formality that is no more suited to small medical practices than it would be for other small businesses -- very few of which use telephone logs.
In addition, the proposal states that "all physician practices, regardless of size, should have procedures to create and retain appropriate documentation. The following record retention guidelines should be followed …. Policies and procedures should stipulate the disposition of medical records in the event the practice is sold or closed." 65 F.R. at 36824. It is not productive for a small practice to attempt to develop and maintain policies and procedures, a priori, for the disposition of medical records in a sale or closure in the distant future. Such event may never happen as anticipated and even if it does happen, the optimal procedures depend entirely on the circumstances of the actual change in control. This unnecessary documentation requirement for small practices typifies the unjustified regulatory burdens embodied in the proposed regulation for such practices.
Section II.C -- Designation of a Compliance Officer/Contact.
AAPS objects to the proposal that "the practice should designate an individual who is responsible for overseeing the compliance program." 65 F.R. at 36824. One or two-physician practices cannot afford to designate one individual to be responsible for "overseeing the compliance program." Such a requirement is designed for large organizations that have small proportional costs in complying. Small practices cannot afford this regulatory burden.
The proposal does acknowledge the impracticality of assigning compliance responsibilities to one person by adding that "[i]t is acceptable for a physician practice to designate more than one employee with compliance monitoring responsibility. In lieu of having a designated compliance officer, the physician practice could instead describe in its policies and procedures the compliance functions for which designated employees, known as 'compliance contacts,' would be responsible." Id. This caveat, however, simply imposes greater – and unacceptable -- regulatory burdens onto the small medical office.
The proposal continues by declaring that "[i]n situations where staffing limitations mandate that the practice cannot afford to designate a person(s) to oversee compliance activities, the practice could outsource all or part of the functions of a compliance officer to a third party, such as a consultant, PPMC, MSO, Independent Physician Association, billing company or professional association." Id. This fails to recognize that outsourcing is expensive, often prohibitively so for a small practice.
The draft proposal should specifically exempt small medical practices from its Section II.C.
Section II.D -- Conducting Effective Training and Education.
The proposed regulation states that "[n]ew employees should be trained on the compliance program within 60 days of their start date and such training should be documented. Thereafter, employees should receive refresher training on an annual basis or as appropriate. … Training may be conducted either in-house or by an outside source." 65 F.R. at 36825.
This is impractical for small practices. Outside training is prohibitively expensive for them, as coding seminars are quite costly and the proportional expense is much higher for small practices than large ones. The CPT coding system itself is not even public domain, which creates a burdensome obstacle to receiving and reviewing it. Formal in-house training is unrealistic for small practices.
The proposal adds that "[i]n addition to the billing training, physician practices should be certain that updated ICD-9, HCPCS and CPT manuals (in addition to the carrier bulletins construing those sources) are available to all employees involved in the billing process. A source of continuous updates on current billing policies should also be readily available." Id.
AAPS particularly objects to requiring subscription to the never-ending updates to the privately-owned CPT coding system, which HCFA and the AMA have imposed on physicians without placing it in the public domain. The AMA insists on blocking access over the Internet to the CPT coding system so that the AMA can continue to charge expensive royalties for its access by physicians and patients (e.g., a charge of $10 per visit to any Web site that posts the CPT). Many small practices cannot afford purchasing full and ready access to the CPT coding system and all its updates. AAPS submits that it is a violation of Constitutional Due Process to require physicians to pay substantial charges to a private owner of a coding system in order to comply with federally imposed regulations.
Section II.D.4 – Continuing Education on Compliance Issues.
The proposal recommends that "there be at least an annual training program for all individuals involved in the coding and billing aspects of the practice." 65 F.R. at 36826. This is not feasible or appropriate for small medical practices. The proposal lacks any cost/benefit analysis of this regulatory burden for small practices. Such cost/benefit analysis would require that small practices be excluded from this requirement. AAPS objects to the promulgation of this rule without a cost/benefit analysis for small practices.
Appendix A Part I.D.
The proposed regulation states that "If the medical services provided are not covered under Medicare, but the secondary or supplemental insurer requires a Medicare rejection in order to cover the services, then would the original submission of the claim to Medicare be considered fraudulent? Under the applicable regulations, the OIG would not consider such submissions to be fraudulent. … Medicare denials may  be required so that the patient can seek payment from a secondary insurer. In instances where a claim is being submitted to Medicare for this purpose, the physician should indicate on the claim submission that the claim is being submitted for the purpose of receiving a denial, in order to bill a secondary insurance carrier. … In some instances, however, the carrier pays the claim even though the service is non-covered, and even though the physician did not intend for payment to be made. When this occurs, the physician has a responsibility to refund the amount paid and indicate that the service is not covered."
This is an unworkable approach to addressing fraud. It is administratively impractical to require the physician to refund a payment to the patient, months after services are rendered, on a claim that was not even submitted to Medicare for payment. The allocation of payment issue is between the Medicare and the insurance company, and the physician cannot be burdened with playing the role of an umpire. Physicians need to practice medicine, not chase after Medicare claim issues. AAPS submits that the last sentence in the paragraph quoted above should be deleted.
Jane Orient, M.D.