retain any funds that you have been paid. looking at your current contract, do the terms of your agreement require that the other party have a bona fide compliance plan in place? if so, does the compliance plan appear to be effective, or does it appear to be mere window dressing? in addition, you may want to consider: When did the other party conduct an internal audit? how did the other side address overpayments in the past? examine your contract. does it obligate both sides to assess, implement, and adhere to the provisions set out We recommend that you conduct “due diligence” when entering into any compensation agreement with another party. This is especially crucial should you choose to employ a percentage-based approach. This step applies equally to both third-party billers and providers. in an effective compliance plan? unfortunately, very few solo physician and small group practices currently have an effective compliance plan in place. third-party billing contracts should include provisions that allow the billing company to conduct periodic audits of a provider’s coding practices. in a perfect world, the provider would agree to pay for an outside periodic review – therefore keeping the billing company out of the assessment process. ultimately, this would be in both the provider and the company’s interests. an outside evaluation could assess both the coding and billing actions taken. contact your lawyer before engaging an outside reviewer. ensure that your contract obligates the billing company to code and bill correctly and permits the company to suspend any billing which appears to be problematic. While a percentage-based agreement can arguably raise questions regarding a billing company’s interest in ensuring that claims are properly handled, these questions can be addressed (to a large extent) through the inclusion of a provision in its billing contract which permits the company (or, preferably, an outside reviewer) to audit a random sample of the provider’s claims each quarter. • stay away from a “general services agreement:”more often than not, the agreement used by the parties is generated or suggested by the third-party billing company, rather than by the health care provider. When this occurs, we have noted that one of the most common mistakes that later leads to problems is that the company has established a contractual relationship with a health care provider based on the billing company’s use of a “general services agreement.” We strongly recommend against taking this approach. outside third-party billing services are specialized in nature – one size does not fit all. • failing to Promptly address illegal or improper conduct: government prosecutors may initially look at a physician and his or her third-party billing company as jointly responsible for any improper or false claims submitted for payment. as a company, you cannot ignore problems that you may identify. once recognized, you have an obligation to research them thoroughly. in the event of a problem, the company needs to stop submitting claims and calculate any overpayments. if a physician refuses to change his or her improper practices and fails to take remedial steps to prevent mistakes of this type from reoccurring, a billing company cannot just ignore the issue. check your contract. does it include a provision that permits you to terminate the agreement if a provider fails to take corrective action? • Provider “suspension” actions: We recently conducted an the journal of the healthcare billing and management association 19
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