One of the most important aspects of providing evidence to support that a laboratory’s compliance program is effective is through a process of constant activity, including annual reviews and updates to the compliance plan and code of conduct, which includes a risk assessment and audit planning. The beginning of each year is a good time for compliance officers to plan their activities for the coming year. Many important changes occur at the beginning of each year, including the implementation of new fee schedules and any changes to coding and other policies the government includes with that. Labs also need to be aware of and address changes to the Current Procedural Terminology (CPT) code lists and a variety of other technical changes that occur at the beginning of the year and quarterly, such as Correct Coding Initiative lists and the national and local coverage determinations. Compliance officers must make certain their laboratories are prepared for these changes and accomplish them in a timely manner to avoid claims submission problems. Part of that preparation is designing audits to verify that changes have been made and the outcomes are as expected. Sometimes introducing multiple changes at one time can result in errors that produce unexpected problems, and auditing is a way to catch those as early as possible in the year before they become bigger problems later. Where to Start The best time to start planning for the year is in the last quarter of the previous year. In November, G2 Intelligence presented a webinar that provided some tips and information about what a compliance officer should do at the end of the year to help better prepare for the new year. One of the items discussed was a year-end review of the compliance program and a step-by-step process to accomplish the review. One of the more important aspects of that review is making certain that the laboratory compliance committee, or if there is no formal committee, the group of individuals responsible for compliance in the laboratory, participates in the process. This helps ensure that all affected parties are involved and have input into the program review. It helps demonstrate the importance of the program and can be an effective tool to provide a road map for the upcoming year. The process also produces foundational information that can be used to ensure that vulnerabilities are noted and can be addressed in the new year. One thing that a lab can do is to create a review tool, such as a checklist, that can be used as a risk assessment tool to determine the current status of compliance effectiveness in the laboratory. The checklist should address all areas of the compliance plan for the laboratory and cover the Health and Human Services Office of Inspector General’s (OIG’s) seven elements required for any compliance program. The checklist should ask when policies or procedures were last reviewed, when training material was last updated, and other key elements. The review should also include structured interviews conducted with randomly selected employees, stratified to ensure the interviews include long-term and short-term employees and managers and supervisors, as well as regular employees. The selection process should also ensure employees from higher-risk areas are included, such as billing and coding, client service, and sales and marketing. Once the review is completed and the updated plan is finalized and distributed, the compliance officer can use the results to create the audit plan for the year and adjust training material. First-Quarter Priorities There are certain things that should be accomplished during the first quarter of the year, and it is the laboratory leadership’s responsibility to ensure the compliance officer sees that they are completed in a timely fashion. Since billing and coding are the highest-risk areas for any provider, including labs, it is important that they receive an appropriate amount of focus and attention. First and foremost, changes to the CPT codes must be reviewed and any changes should be accounted for and made in the charge master or billing computer as appropriate. If there has not been a recent outside review of the billing charge master within the last two to four years, depending on the complexity of the charge master and whether internal audits and reviews have revealed a high number of charge master-related claims problems, one should be conducted during the first quarter. If the charge master review proposed by the outside contractor does not include a specific review for new codes and changes to codes for the current year, add that to the outside reviewers’ scope for the review or do that part internally. Aside from or in addition to the charge master review, a comprehensive audit of the claims submittal process should also be conducted during the first quarter. This audit looks at the claims submittal process from start to finish and includes reviews of orders, test performed, documentation, claims submitted, denials and reductions in payment amounts, and appeals. If there have been reviews by government contractors like recovery auditors or Zone Program Integrity Contractors, the results from those should be reviewed, and any problems noted or corrected as a result should be verified for the effectiveness of the corrective actions. Another priority for the first quarter is a review of legislative and regulatory changes that occurred during the past year or are projected to be changed during the current year. The first place to look for these is in government documents and agency Web sites, such as those for the Centers for Medicare and Medicaid Services and the OIG. However, an active review of newsletters and the Internet should provide clues that can be used to further research projected changes. Many times these kinds of changes precipitate significant changes in laboratory policies or practices and it is important to get a handle on this early in the year. Every laboratory should have a system in place to continuously monitor government sources for regulatory changes. In fact, this is one of the seven elements of any effective compliance program as indicated in the OIG’s Compliance Guidance for Clinical Laboratories, published in the Federal Register in August 1998. One of the government’s most important communications to the compliance community is its annual work plan. Each year the OIG issues its work plan for the upcoming year. There is an expectation that providers actively review the work plan and make certain they account for the items included that affect their laboratory or other entity. The OIG would expect to see some reference to the work plan in any review it conducts of the lab’s compliance program, particularly if the item that caused the review was one addressed in the work plan. During 2012, the OIG changed the date that it publishes its work plan for the upcoming year to January instead of in the fall. This reflects OIG efforts to align its activities to be more in step with how laboratories and other health care providers work and plan, as well as the multitude of changes that occur at the first of the year. One of the bigger changes coming in October of this year is the conversion to the new diagnosis coding system, International Classification of Disease Tenth Revision (ICD-10) from the current ICD-9 system. This change will involve a great deal of planning and resource commitment. How your laboratory does its billing, outsourced or internally, or whether or not it is hospital-based or independent, will make a difference on how much effort this will take. January is not too early to consider what is going to happen during that transition and determine how the compliance officer needs to prepare. Government Expectations The government expects all providers, including clinical laboratories, to have an effective compliance program in place. The compliance program should incorporate the seven elements listed in any compliance program, and there should be evidence that the program is active and embedded in the culture of the laboratory. We have so far focused on billing and coding because they are a first-quarter priority and a high compliance risk area for labs. However, there are other areas that laboratory compliance officers need to address as well. The compliance guidance requires laboratories to do sanction checks on employees, clients who order tests, and certain vendors to prevent the laboratory from hiring an individual who has previously been sanctioned by the government and to prevent the laboratory from filing claims for tests ordered by sanctioned providers or practitioners. If the laboratory does not regularly review and update their sanction checks, or has not reviewed its entire list of employees, contractors, and referral sources in more than a year, this should be done as a January priority, also. Education and Training The government puts a lot of faith in educating employees about the laboratory compliance program and the compliance risks the laboratory faces. It believes that a well-educated workforce can help the laboratory detect and prevent problems and reduce the risk that a problem will continue for a long period of time before it gets corrected. As a result, laboratory compliance officers must pay attention to the compliance education and training program. Make sure the education program is current and is relevant to your employees. It should flow from the compliance plan and the policies and procedures that govern employee activities and it should include additional training for employees working in higher-risk areas. The laboratory should also ensure that new employees are not working unsupervised until they have had at least basic compliance training. The education program should include audits or reviews that confirm employees are getting the message. Tracking attendance and making sure that all employees receive the appropriate training is almost as important as the training itself. One other area of focus for the education program is to make certain that those in positions of authority, like executives, physicians, managers, and supervisors, are required to attend compliance training and meet the same criteria as all employees. Leadership-level employees like these should also receive training on preventing whistleblower lawsuits and the importance of strict enforcement of a nonretaliation policy. Other Compliance Issues The compliance issues addressed in this article represent those areas where the compliance officer should focus attention at the beginning of the year. These are not the only compliance issues labs face, and appropriate attention should be given to other areas, including issues unique to state laws and regulations. More and more states are developing laws and regulations that govern activities that involve laboratories. Some states have passed laws that prohibit placing laboratory phlebotomists in a referral source’s office. Late in the year some states passed laws that prevent labs from placing electronic health records or computers in physician offices. Many states have laws on the books that mirror or address federal anti-kickback laws and regulations as well as self-referral (Stark) laws. It is important that laboratory compliance officers have a plan and locate resources to allow them to keep track of state laws and regulations and take care when hiring legal counsel and consultants that they are knowledgeable in the laws in their state. Stark law and anti-kickback law issues are also an area of focus by the government as is evidenced by a variety of advisory opinions, cases, and proposed legislation. One of the higher-risk areas for these kinds of problems is the expiration of contracts or agreements that have Stark and anti-kickback implications, like lease agreements and nursing home contracts. An audit of these contracts and the processes and procedures used to maintain them is an important first-quarter task as well. The compliance officer should make sure there is a tracking mechanism in place to detect expiration enough in advance to ensure adequate review and renewal. Conclusion In the coming year, laboratories face important business issues such as reductions in Medicare and Medicaid reimbursements, revisions to the Clinical Laboratory Fee Schedule, and low reimbursement or noncoverage of molecular and genetic tests. Even when faced with those challenges, laboratories and their compliance officers should make sure their planning processes include specific compliance activities from the very first day of the year. If the compliance plan is going to provide the benefits it is supposed to provide, it is important to start the year with a review of the previous year’s activities and make appropriate adjustments to critical compliance activities based on the information provided as a part of that review. Focusing on compliance at the beginning of the year can have the effect of demonstrating the importance of compliance efforts to all employees. It is a sure bet that compliance scrutiny by the government is not going to go away any time soon. Takeaway: Lab compliance officers should get a jump start on the new year by reviewing new codes, federal and state regulations, and other critical policies necessary to keep the compliance program up to date.