Just as a PSG can diagnose a patient’s sleep disorder and CPAP utilization can assist with the treatment of obstructive sleep apnea, hiring a qualified attorney to serve as a billing specialist for a sleep lab or DME company can assist in identifying regulatory compliance concerns and provide advice on documenting areas of concern related to billing and claims submission.
Sleep labs, sleep medicine professionals, and durable medical equipment (DME) companies are operating in an environment of decreasing reimbursement, complex regulations, and increasing audits and other investigations by government agencies and commercial insurance companies. Due to decreasing reimbursement and delayed payment by various payors, sleep labs and DME companies should revisit their billing efficiencies and collections cycles. While sleep labs and DME companies strive to navigate regulatory compliance with all applicable state and federal regulations, they also face the challenge of receiving payment for services rendered in a timely manner.
Depending upon the payor, the fiscal intermediary, and the region, sleep labs and DME companies may experience significant payment delays that impact the bottom line and future viability. Historically, many sleep labs have outsourced billing and collections to a third-party company. A sleep lab and a third-party billing company typically enter into a billing services agreement. Pursuant to the terms of the agreement, the third-party company submits claims on behalf of the sleep lab to various payors, then tracks collections and follows up on outstanding claims and aged receivables. There seems to be a trend in recent years in which sleep labs hire billing experts as employees, and the billing experts run an internal billing department within the sleep lab that is responsible for all billing functions including coding, claims submission, and collections.
Due to increasing Medicare, Medicaid, and commercial insurance audits and other investigations and the rising number of qui tam actions (also known as whistleblower lawsuits), some sleep labs have hired attorneys and law firms to serve as their billing specialists. The case can be made for hiring an attorney to serve as the sleep lab’s billing specialist in light of the potential penalties, sanctions, and possible exclusion from the Medicare Program if federal fraud and abuse regulations (including but not limited to the Anti-Kickback Statute, Stark Law, Anti-Markup Rule, and the False Claims Act) are violated.
If the sleep lab is providing services to government beneficiaries, including Medicare and Medicaid patients, it must comply with the Medicare coverage guidelines for polysomnography (PSG) set forth by the Centers for Medicare and Medicaid Services. DME companies providing CPAP and related DME supplies to Medicare and Medicaid patients must comply with the Medicare coverage guidelines and regulations for DME. In addition, sleep labs and DME companies need to comply with federal regulations. In the event that a sleep lab or DME company violates the Anti-Kickback Statute, Stark Law, and/or False Claims Act, the government can seek the payment of civil monetary penalties as well as criminal penalties and sanctions for such violations, including exclusion from the Medicare Program.
The risk of exposure and potential liability, including civil monetary penalties and criminal penalties and sanctions, for a sleep lab or DME company that violates the federal fraud and abuse regulations makes a strong case for hiring an attorney to serve as the billing specialist. It can minimize the sleep lab’s or DME company’s risk of exposure if the attorney serves efficiently. If the sleep lab or DME company decides to designate and hire an attorney as its billing specialist, they should ensure that the attorney and law firm are qualified to serve in that capacity. That means conducting due diligence to make sure the attorney and law firm have the requisite expertise and experience with reimbursement and billing issues, audits and investigations, and claim denials. The sleep lab or DME company also must identify and communicate its expectations for the parameter of the services to be provided by the attorney.
An advantage of hiring an attorney to serve as a billing specialist is that any documents that are produced or advice that is given by the attorney to his client are most likely protected by the attorney/client privilege and may not be discoverable by a government agency, auditor, or investigator in a future lawsuit, audit, or investigation. The attorney/client privilege protects the sleep lab or DME company from having to disclose and produce any documents or communications that result from the attorney’s representation of the lab or company. While there are certain exceptions to the attorney/client privilege, it can serve as a shield to protect the sleep lab or DME company from potential liability triggered by an audit, investigation, billing errors, or submission of a false claim.
Typically, most compliance plans implemented by sleep labs or DME companies include an attorney review component as well as a policy and procedure for contacting the sleep lab or DME company attorney in the event of a coding or billing issue or claim denial by a payor. In the event of an audit or investigation or a pattern of claim denials, the sleep lab or DME company may decide to consult an attorney to provide guidance and advice in dealing with the government agencies, auditors, inspectors, and fiscal intermediaries. However, sleep labs and DME companies should consider seeking guidance and advice from an attorney on billing issues as a preventative measure and not in the midst of a crisis (such as lawsuit receipt or the appearance of federal agents).
If a sleep lab or DME company decides to hire an attorney and law firm to serve as its billing specialists, they should conduct due diligence and contemplate the following preliminary considerations:
- Interview the attorney to determine whether the professional has the background, expertise, and experience to represent the sleep lab or DME company and provide legal advice on regulatory compliance issues, including billing and coding. While the attorney will not be conducting the actual coding and claim submission for the sleep lab or DME company, he should have a solid working knowledge of how claims are processed and submitted to various payors. The attorney also should understand how claim denials are challenged and appealed for the sleep lab or DME company payors.
- Ask the attorney if he can conduct education and training for the sleep lab or DME company staff regarding regulatory compliance issues. It is imperative that all reimbursement procedures conducted, specifically billing and coding policies and procedures, be fully understood by the staff to ensure compliance.
- Determine if the attorney can conduct periodic reviews of the business’s compliance plan and policies and procedures to ensure that they are implemented, updated, and executed in compliance with the applicable state and federal regulations. An effective compliance plan should contain written standards of conduct; an education and training plan and related objectives; identification and enforcement procedures for disciplinary procedures; internal auditing, monitoring, and reporting procedures; and provisions for investigations and corrective action.
- Ask the attorney if he can conduct patient chart reviews. Conducting an internal patient chart review can be an effective tool for targeting areas that need to be improved and continually monitored. Subsequent patient chart reviews should address any previous concerns or cited deficiencies. Make sure the patient charts are stored and retained in compliance with all applicable state and federal regulations.
- Determine if the attorney can periodically be on-site to walk through and observe how patients are receiving care from the staff. The sleep lab or DME company should consider who has access to the patients’ records, including financial documentation, and make sure to protect the confidentiality of all patient records pursuant to the federal HIPAA privacy and security regulations and applicable state regulations.
A strong case can be made to hire an attorney as the billing specialist for a sleep lab or DME company in light of the current regulatory landscape and increasing enforcement effort by government agencies and commercial insurance companies. Consulting with and hiring a qualified attorney who is well versed in regulatory compliance regarding sleep medicine and the operations of a sleep lab or DME company and related documentation can assist the sleep lab or DME company with avoiding potential regulatory pitfalls and liability exposure.
Jayme R. Matchinski, Esq, a partner with the law firm of Clark Hill Plc in Chicago, concentrates on healthcare law and has counseled sleep disorder centers, physicians, and healthcare providers nationally.