Use your compliance program to solve problems and pursue opportunities
by Neil Caesar

Too few home care companies embrace the full range of benefits that a compliance program offers. Prior columns have discussed 17 ways a home care company can utilize its compliance program to enhance reimbursement returns, increase ability to withstand and reduce government scrutiny, solidify employee relationships, improve employee morale and performance and enhance relationships with business colleagues, financiers and customers, in order to obtain better funding, better contracts, better growth opportunities and more successful consumer and patient relationships. Let’s finish by examining the final four benefits.

18. An effective compliance program permits a home care company to respond more quickly to problems.

A key part of an effective compliance program is its procedure for identifying, investigating and resolving potential problems. While the compliance program applies these procedures toward fraud and reimbursement rules, these internal systems can be expanded to allow a home care company to respond quickly to other problems. For example, what is causing late deliveries? Is it order processing, the warehouse or the driver? Is it caused by ignorance, inefficiency, poor communication or disinterest? What education, incentives or punitive measures will fix the problem? How should the situation be monitored to ensure the solution works?

19. An effective compliance program facilitates expansion into new services/markets by identifying topics which must be addressed for profitability.

When a home care company wishes to expand into new markets or to offer new services, the company’s existing compliance protocols can help identify topics which must be addressed for legal safety and profitable expansion. When a DME supplier wants to expand into the CPAP market, for example, it can look to general compliance topics applicable to its current activities to identify what issues must be researched and addressed for the expansion. Are there special considerations for patient or referral marketing? When are financial incentives allowed? What are the qualification and billing rules for CPAP? What record keeping requirements are required? What resources did the supplier use to learn these answers in the DME context, and are there similar resources for the CPAP context? Similarly, when a home care company seeks to expand into new geographic markets, such growth raises service, communication and marketing questions. Its existing compliance protocols suggest the topics to be addressed for expansion, and how to find answers to expansion questions.

20. An effective compliance program establishes approved ways to deal with problems and opportunities, and this facilitates growth.

No company wants to reinvent solutions each time problems arise. Successful home care companies find it valuable to have established procedures to govern appropriate business conduct, both internally and with outside parties. Within its niche of reimbursement and fraud compliance, an effective compliance program establishes such procedures. Because a compliance program should be compatible with a home care company’s business philosophy, the compliance program should establish standards of conduct which, although focused on fraud and reimbursement issues, nonetheless define the appropriate parameters in general for conduct within the company.

21. Proactive, preventive compliance programs are tax deductible.

When a home care company creates and operates a proactive compliance program to prevent problems and maintain smooth communications, the costs of creating and running the program have been consistently treated as deductible business expenses for federal and state tax purposes. However, when a home care company becomes subject to an investigation or government enforcement action, the punitive measures imposed by the government are generally disallowed as tax-deductible expenses. This includes compliance initiatives, corporate integrity agreements and other programs agreed to by the company when negotiating a settlement with the government. The legal and consulting costs incurred in fighting or settling with the government may not be tax deductible.

Three Insights

With a little creative thinking, of course, you should be able to articulate more than the 21 benefits we have identified. Nonetheless, when our 21 benefits are evaluated, I offer three valuable insights. First, compliance programs can benefit a home care company in many, many ways – benefits go far beyond the “common wisdom” of getting out of trouble (or preventing trouble) with the federal government. Second, a compliance program is, at its heart, an internal communication system. It enables a home care company to capture, refine and disseminate information, investigate concerns about the information and correct internal processes where necessary. As such, compliance programs may be used as a template for internal communication systems generally. This offers obvious benefits to forward-thinking companies. Third, compliance programs can be marketed to a home care company’s personnel, to potential venture partners and allies, to financiers and to others as evidence that the company “has its act together.” The value of such a message cannot be overstated. Some home care companies will use compliance programs as an insurance policy, to reduce or prevent trouble. Others will use compliance programs as a communication tool as well, as a way to improve relations with their employees. Still others will use compliance programs as a marketing and public relations tool, to enhance their position with allies and within the marketplace. Regardless of the reasons, an effective compliance program provides a resounding answer to The Question They Dare Not Ask: “Why bother with a compliance program?” The answer? “Because it’s good business!”