Serbanes Oxley and Other Compliance Training Bugaboos

Compliance training gets no respect. Training managers view it as something of a bugaboo. Most trainees greet it with about as much enthusiasm as they would a parallel parking contest. So what is it, why do we need it, and how can we best go about it?

Well, government regulations and business best practices dictate that you not only conduct certain courses but also maintain records to show that they have been taken and understood by all concerned. Not offering such training can jeopardize the health and safety of your workers, earn the ire of your shareholders, and/or get you on the wrong side of the regulatory authorities.

Here are some examples of compliance training:

° Human resource issues: Such as equal opportunity, workforce diversity, and sexual harassment.

° Business ethics: A large organization will have need for courses that deal with general business ethics as well as the more specialized needs of those in sales and marketing, accounting/finance, information and document management, and corporate governance (Serbanes Oxley or SOX compliance requirements). Moreover, certain industries, such as real-estate and lending, will have additional requirements specific to their business.

° Occupational safety: US Occupational Safety and Health Administration (OSHA) regulations on both general occupational health and safety and the special needs of industries such as construction, food service, and healthcare.

° Industrial safety: OSHA and other standards that seek to prevent injuries, accidents, chemical spills, fires, and explosions.

° Driver safety education: For those who operate vehicles that are part of corporate fleets.

° HIPAA training: For healthcare workers on how to use and share patient information in accordance with the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

What's the ideal platform for such training? To answer that question, we need to examine the characteristics of compliance training, which are:

° It's required by large numbers of people, often within a short timeframe.

° It's often repetitive.

° The course content, once developed, is fairly stable (though subject to adjustment as regulations get fine-tuned).

° Even locations that have only one or two employees must undergo this training.

° And, of course, it demands good record keeping.

° Except for the needs of specialized industries, the course content - once developed - can be sold to a very large national, sometimes international, customer base.

What we have just listed are the exact situations in which e-learning is both appropriate and cost effective. E-learning has the ability to perform volume training quickly and relatively inexpensively, even when there are one or two participants per location. It's also just-in-time and self-paced, allowing it to be more easily squeezed into a crowded work schedule. All those make e-learning the ideal vehicle for compliance training. What about the records? When e-learning is delivered from an LMS, record-keeping is automatic and effortless!

Now, what's this LMS? A Learning Management System is software that allows you to display on your corporate intranet all of your training offerings, whether instructor-led or self-paced, as well as track the progress of everyone taking these courses - anywhere at any time in your company. LMSs, while quite useful, can be pricey, ranging in cost from many thousands to over a million dollars. They can also be hard to select, customize, install, and operate.

Does it ever make sense to offer instructor-led training (ILT) classes on compliance issues? There's no better training than an ILT class taught well! There are topics related to people issues, for instance cultural diversity and sexual harassment and perhaps some aspects of SOX compliance training, which can be taught with much greater impact in an ILT setting.

So how do you implement compliance e-learning and an LMS without going broke? Here are some tips and ideas that will make the job easier:

° You can buy compliance e-learning from either a vendor specializing in a particular type of compliance training, for example, just human resource, occupational safety, or SOX training. (SOX training has become an industry by itself.) If the need of the hour is to address a particular compliance issue quickly, this may do. You can also buy it from an e-learning vendor that provides a variety of compliance and general e-learning. If you're looking for a comprehensive solution addressing several compliance and/or general training requirements, this is the way to go. I should add here that there are sources of compliance training that are often overlooked, e.g., trade associations and nonprofits such as the National safety Council.

° Most large sellers of e-learning offer courses produced by the same old producers of quality e-learning courses. Given that, it may make sense to buy your e-learning from a smaller, low-overhead discount vendor than a large name-brand vendor - service and everything else being equal, of course. Doing your homework can help you stretch your training dollar.

° There are e-learning vendors who will allow you to run any e-learning courses bought from them off of their servers, using their LMS, saving you the expense and trouble of acquiring/operating both an LMS and the information technology infrastructure needed to host and support the e-learning libraries. If you have any third-parry e-learning courses, you will not be able to run them off of this vendor-provided "gratis" LMS, but if your objective was to track your compliance training for free, that objective has been achieved.

° There are vendors that offer both e-learning and ILT solutions. Some of them offer knowledgeable "blended learning" consultants who can help you take the best of the e-learning and ILT worlds and put it all together into packages that score high on the quality/effectiveness scale but are easy on your budget. A blended learning package might, for instance, combine e-learning courses on "mass market" compliance topics with high-impact ILT courses on sensitive human resource needs, especially if such courses require customization to your company's culture or processes.

Finally, ask questions; insist on answers. Take the e-learning courses out for a test drive before you buy them. Make sure the courses are interactive and fun. Find out if the vendor has blended learning consultant who can help you combine e-learning with ILT in just the right way. Compliance training needs to be effective, or it hasn't met your basic goals. It needs to be affordable. And it needs to draw and hold the audience attention. After all, you don't want to be known as the impresario of parallel parking events!

KK Arora is President of Eogogics Inc., a one-stop source of all training (technical and non-technical, e-learning and ILT), former Vice President of Human Capital Management of LCC International, and Founder and Managing Director of Wireless Institute. A scientist turned educator/trainer, he?s equally at ease in the world of high-tech and high-touch. His twenty five year career includes pioneering work in adult education and computer based training and distinguished contributions to the development and retention of high-tech human capital. For his bio: http://eogogics.com/bios/KA For information on Eogogics Inc.: http://eogogics.com/ For information on the Eogogics e-learning programs: http://eogogics.com/institute To contact KK Arora: kk@eogogics.com

Electronic Medical Billing Software and Service Compliance With Pre-Payment And Post-Payment Audits

Mistaken payments add up to an estimated $200 billion, exceeding 10% of national healthcare costs. Other Party Liability (OPL) alone, i.e., claims that should be paid by somebody else, make up $68 billion or 3.6% of national healthcare cost. The enormous size of potential savings due to improved claims processing continues to attract attention and resource focus. Insurance profitability experts believe that a payment scrutiny program can be as successful a profit-building strategy for insurance companies as raising premiums or adding members. A growing industry of outsourced technology and services to avoid mistaken payments is also symptomatic of a growing demand for such services. Some vendors cite cumulative payment savings as high as $3 billion.

However, avoiding mistaken payments is hard because of four-pronged constraints, namely, the volume of claims, the disparate and disconnected sources of relevant information, the resource-intensive manual processes needed to identify and investigate recovery opportunities, and regulatory requirements for timely payments.

To manage these difficulties, many payers adopted a two-phase-based "pay-and-refund" approach for payment minimization. The second phase of this approach is designed to correct any mistakes made during the first phase. Each of the phases can be further divided into two stages. Specifically, the initial phase splits into prepayment review and timely payment of valid items, while the final phase includes post-payment audits and refunds of items proven invalid during the audit.

Prepayment Review

Prepayment review typically proceeds in two stages, identification and confirmation. Potential overpayment identification requires cross-referencing multiple systems that manage provider enrollment, authorizations, recovery case management, and call centers for both insured and providers.

Overpayment confirmation uses Correct Coding Initiative (CCI), Local Medical Review Policies (LMRP), and other rules to categorize the potential overpayments into Contractual/Clinical, Eligibility, Coordination of Benefits, or Duplicate Payments.

Overpayment confirmation typically includes tests for inter-claim, intra-claim, or cross claim inconsistencies, lifetime duplicates, date range duplicates, re-bundling, inappropriate modifier codes, wrong E&M crosswalk, upcoded or undercoded visit level, etc.

Prepayment review requires powerful database technology. Most of prepayment claim review process can be automated along with subsequent denial notice or explanation of benefits (EOB).

Post-Payment Audit

In contrast, post-payment audits tend to consume more resources during each one of the audit stages:


Target identification

Audit identification report shows total annual revenue and the degree of variance between the audit target and peers in the same specialty and geography. The product of the two numbers is proportional to the expected gain from the audit, essentially providing a natural audit ranking.


Audit preparation

A higher return to the payer is the key advantage of a carefully designed and executed post-payment audit. Audit preparation starts with a review of audit target selection, which is the result of provider profiling and variance reporting. This stage includes a list of claims paid in the past that are most likely to fall outside of standard distribution of the peer group.


Audit execution

The auditor requests and analyzes medical notes supporting the data reflected in the sample of paid claims produced at the audit preparation stage. The auditor's objective is to establish the proportion of claims found unsupported by reviewed medical notes within the set of audited sample (percent of overpayment).


Refund (and penalty) extrapolation

The auditor extrapolates refund as the product of percent of overpayment and the total payments by the auditing insurance carrier for the past six years.


Negotiation


Settlement

Some stages, such as audit execution, negotiation, and settlement must be entirely manual, and may require highly skilled and experienced personnel. Other stages, such as verification of overpayment amount and currency, identification of overpayment reason, and audit prioritization, may be partially automated, using rule-based technology to identify procedure repetition, high payments per day, surge analysis, unusual modifiers, unusual procedure rates, geographic improbabilities, or 5/50 patterns. External resources might be added at this stage to consult provider watch lists, OIG sanctions databases, or high-risk address databases.

Summary

A full-scale implementation of payment scrutiny requires sophisticated processes to handle prepayment claim review and post-payment audits and uses advanced fraud detection technology. Prepayment claim reviews are less expensive than post-payment audits and therefore can be applied to every claim, while post-payment audits must be carefully targeted. A system to manage overpayment recovery process must include claim identification, its history, provider and insured information, medical notes, insured services call center notes, authorizations, etc. Without the ability to efficiently manage a large volume of recovery cases, the risk for errors or missed payment deadlines is high, resulting in missed recovery opportunities.

Yuval Lirov, PhD, author of "Practicing Profitability - Network Effect for Revenue Cycle Control in Healthcare Clinic and Chiropractic Office: Scheduling, SOAP Notes, Care Plans, Coding, Billing, Collections, and Audit Risk" (Affinity Billing) and "Mission Critical Systems Management" (Prentice Hall), inventor of patents in Artificial Intelligence and Computer Security, and CEO of Vericle.net - Distributed Billing and Practice Management Technologies. Yuval invites you to register to the next webinar on audit risk at BillingPrecision.com

One Size Does Not Fit All When It Comes To The Applicability Of Code Issues And Compliance

Whether using one of the model codes or a site-specific code, such as New York City's Building Code, the task of analyzing and applying the applicable code requirement for a particular situation is best suited to a professional code consultant who understands the variations in codes from location to location. Owners and facility managers, primarily concerned with minimizing their risk on any scale of a project, need to understand which design professional is responsible for ensuring code compliance where the project is being built.

Domestic codes

The applicability of various domestic and international building codes reveals why owners should become aware of the assignment of responsibility for building code standards and/or oversee building code compliance for the projects they develop. A building code is a set of specifications and procedures designed to cover all aspects of construction. These codes stipulate the products or materials that can be used for a building or structure, what construction processes are permissible, and who can perform specific construction activities. Underlying all principles applicable to building codes is the protection of the public health, safety, and welfare as it relates to the following design/construction disciplines: structural, mechanical, electrical, plumbing, life safety (egress), fire safety (protection and suppression), natural light and air, accessibility standards, and energy conservation.

Since standards are at the heart of any building code, they attempt to be exact but they also allow flexibility for improvement. Building codes represent a composite of three sets of discrete information: (1) definitions of terms; (2) licensing requirements; and (3) the building standards themselves. These standards find their way into local codes either through one of the model code associations discussed below, federal law, or through direct lobbying at the local level.

There currently exists a complex web of hundreds of divergent national, regional, and local codes, which are all in a constant state of flux. This collection of building codes makes it extremely difficult for owners to provide oversight and building code expertise for the numerous projects it may undertake locally or globally.

For the reasons set forth below and because of the complexities and associated liabilities involved with assuming responsibility for the various codes, owners are encouraged to take more active roles in the preparation of their design services agreements to ensure who is responsible for code compliance for their projects. Responsibility for this area should be placed in the hands of local architectural and construction professionals retained for each project. Furthermore, owners who create a contractual framework which indemnifies owners from claims and liabilities associated with the services performed by architectural and construction professionals will be better protected should the project not pass inspection.

One project does not fit all

Despite the push towards one universal code, every community in the United States has adopted one of many building standards. Building code regulation, like construction itself, has long been considered a local activity. The prevailing pattern of regulatory use in the United States regarding building codes is one best described as being laissez faire, with each community determining its own building code requirements. Even with state codes, a pattern of local independence has evolved and efforts in achieving an all-encompassing national measure that is reciprocal among states has, for the most part, been difficult to adopt universally.

There are three model code associations in the United States which actively solicit member cities and municipalities to adopt their model code. While there is some overlap regarding the jurisdiction of these code associations, the country is generally divided into areas dominated by one of the model codes: (1) the International Conference of Building Officials ("ICBO") predominately is adopted in the West; (2) Building Officials and Code Administrators ("BOCA") in the Northeast; and (3) Southern Building Code Congress ("SBCC") in the South.

There has been a push over the last several years by a fourth model code association, the International Code Council (ICC), to consolidate the three major codes into a single unified national code. Despite the ICC's attempt to draft and seek endorsement of a single national building code, known as the International Building Code ("IBC"), many municipalities have hesitated to adopt the new code because it was merged too quickly, and as a result, lacks the specificity most local jurisdictions want in their code.

Furthermore, the possible emergence of a universal building code has given rise to the development of an alternative model code based on performance. As the ICC struggles to merge the three model codes, a subgroup of the ICC has prepared the International Code Council Performance Code for adoption by municipalities as an alternative to the IBC. The fundamental difference between the two codes is found in their structure. The IBC is a conventional prescriptive code that details exactly how a building component or system must be designed. The performance code, on the other hand, explains the intent of a code in a specific situation and lets the designer figure out how to meet that objective. This fundamental difference in the structure of these codes adds a new level of complexity for design/construction professionals charged with code compliance and interpretation.

The reality of complying with local codes

While the adoption of model codes at the municipal level has been an ongoing trend dating to the early 1960s, the elimination of locally drafted codes will most likely never take place as long as municipalities and cities choose to retain their unique identity and character owing to each location's practice of design and construction. The existence of a wide variety of building code requirements from one city to another, even among neighboring cities, will likely remain in the construction industry. Many municipalities in the United States have retained their local codes and show no sign of adopting model codes to replace their own because of their particular unique social, political, and building environment.

A considerable measure of variation has produced divergent building codes where regions differ characteristically by way of urban planning, built environment, local climate, and geology. For example, northern cities must provide for snow loads while southern cities must contend with other environmental conditions such as solar heat gain and hurricane/tornado season. Furthermore, many of the largest cities in the United States evidence special code requirements that manifest their own special problems. For example, New York City, has a unique high-rise/high-density urban condition not found in other large cities. As a result, New York City applies its own code as separate and distinct from New York State and Federal regulations.

The international building code jungle

Building code compliance becomes more complex for projects located outside the United States. As in the United States, many of the countries we researched have no one unified national standard. Rather, each region or municipality customarily applies its own unique building code.

What makes providing building code expertise more complicated abroad, is the potential lack of understanding of foreign municipal resources which work hand-in-hand with any design/construction discipline. For example, if one is not aware of a local jurisdiction's fire-emergency protocols such as the correct sizing and fittings for the standpipe connections, then it is difficult to determine fire-safety standards. Additionally, without the basic understanding of an area's regional sewage treatment infrastructure and its unique irregularities, it is impossible to identify the appropriate building sanitation system.

Compounding the problems when working internationally is that foreign countries often assert direct governmental oversight which infuse political restrictions over the applicable building code. For example, Japan applies stringent import restrictions which bar foreign building materials which would otherwise be preferable or acceptable for a particular project.

Performance-written building codes versus design-written codes, local codes versus national codes, and required or non-required filing with building authorities, are just a few of the issues owners are faced with when dealing with assignments of responsibility. If the owner retains a licensed professional, will that entity retain a code consultant? In some cases, the owner is unaware of third-party relationships formed by the architect or engineer, unless counsel has addressed this issue with the owner. If so, who assumes liability concerning the code compliance of the design drawings, the architect or its code-consultant? Reliance on the architect does not always guarantee that he or she will also be fluent in relevant code meaning and interpretation.

Steps owners should take

It is difficult, if not impossible, for owners to effectively monitor and be responsible for providing code compliance services in the diverse jurisdictions, as well as for future projects and their existing facilities. For those issues which involve code compliance obligations owners should take the following steps:

a. Require each local owner to contractually obligate the local architect and construction professionals to assume responsibility for code compliance and interpretation obligations.

b. Require sufficient professional liability and general liability insurance coverage, naming the owner as an additional insured, for each project covering claims for design and construction defects.

c. Recommend that local code standards be substituted for the general, or non-site specific "boiler plate," owner-written building standards.

d. Seek indemnification from the applicable design and construction entities for future liability related to code compliance and interpretation issues.

e. Require indemnification provisions in all agreements with design and construction professionals charged with code compliance and interpretation issues such that the owner is indemnified and held harmless from and against all liabilities, damages, losses, claims, demands, and actions of any nature whatsoever which arise out of or are connected with the performance of such design and construction services.

f. Ensure that all agreements with design and construction professional, who provides code compliance services, provide for adequate insurances which name the owner as an additional insured to cover any claims which may arise out of code compliance issues.

From the owner's perspective, a discussion on code compliance is often placed on the back burner until many other design-related issues are resolved. Discussions about code compliance are not glorious or fashionable and are rarely, if not implicitly, the arena where owners want to invest great quantities of time and energy. However unpopular, the assignment of responsibility for code compliance is an important reason why owners and their in-house facilities and design professionals should be aware of the code and liability issues that arise during the planning stages of a project.

Julian Arhire is a Manager with DtiCorp.com - DtiCorp.com carries more than 35,000 HVAC products, including industrial, commercial and residential parts and equipment from Honeywell, Johnson Contols, Robertshaw, Jandy, Grundfos, Armstrong and more.