Legal

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Wednesday, July 31, 2002

Providers, look out for 'agents'

With Neil Caesar
Q. Rotech Healthcare just uncovered fraud by one of its subcontractors that almost resulted in $30 million in false billings. Do I need to worry about my subcontractors, partners, vendors, etc.?

A. Effective compliance requires HME suppliers to look out for their "agents" - subcontractors, partners and vendors. It is also good business to do so. The federal compliance guidelines for the HME industry state that suppliers should create written policies to be followed by both employees and agents; that suppliers should communicate compliance policies to both employees and agents; that suppliers should verify agents are trustworthy and have not been convicted of felonies or sanctioned by the government; and that suppliers monitor and enforce agents' ongoing compliance.

It makes sense to document your efforts to disseminate compliance policies to agents and to monitor their ongoing adherence. It also make sense to reflect all of these obligations in a written document asking the agent to behave compliantly, adhere to your compliance policies, and cooperate with your monitoring efforts. Sloppiness by agents can get you in much trouble. In 1999, three Florida home health agencies that failed to monitor subcontractors who submitted claims on their behalf were hit with multi-million dollar fines and penalties. Agents who sell or market on your behalf also pose risks. The key to supervising agents is to include them in your compliance education. If you observe problems with your agents, move to correct them. Don't just passively accept their promises that they are fixing the problems. The HIPAA privacy and security rules also require you to ensure compliance by your agents.

Neil Caesar is president of the Health Law Center in Greenville, S.C. You can reach him at ncaesar@healthlawcenter.com or info@healthlawcenter.com.

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