Could COVID-19 cause a compliance nightmare?

August 10th, 2020 / By Barbara Aubry, RN

Sometimes I think I read way too much about the novel coronavirus. The more we learn about the virus, the more twists and turns are uncovered. Apparently, antibodies don’t necessarily equate to immunity, since it was discovered some patients can get the virus twice. Cardiovascular deficits seem to be a long term sequalae of the infection for some individuals who did not have cardiac disease prior to infection.

Something I noticed recently gave me pause: Fraudulent products—from PPE to bogus “treatments”—are still in the supply chain and being purchased unknowingly by states and providers.

Since it appears the federal government is leaving supply chain access basically up to states to maneuver, some facilities are purchasing ”fake, faulty and even illicit medical supplies” according to a recent article in MedPage Today.

According to Senate Finance Committee Chairman Chuck Grassley (R-Iowa) during a July 28, 2020 hearing, “Protecting the Reliability of the U.S. Medical Supply Chain During the COVID-19 Pandemic”:

“Before the coronavirus pandemic, hospitals and healthcare workers could avoid purchasing counterfeits by tapping into tried-and-true supply chains, However, as the demand for PPE skyrocketed, some of these providers have had to go outside their normal supply chains to source supplies, and in some cases have inadvertently purchased fake, faulty, and even illicit medical supplies”

In addition, Senator. Ron Wyden of Oregon stated, “my home state of Oregon purchased close to 1 million N95 masks from a supplier in China, but after they arrived, they were decertified because they couldn’t pass a key safety screening.”

This is devastating on many levels, the least of which is financial loss for the state and its taxpayers.

Fighting Back

The U.S. is fighting back; in addition to private companies going after bogus “suppliers” selling their illegally branded PPE, the Global Trade Investigations Division at the Department of Homeland Security (DHS), created a task force known as Operation Stolen Promise to stop COVID-19 supply fraud. The effort has resulted in seizure of “over 900 shipments of mislabeled, fraudulent, unauthorized, or prohibited COVID-19 test kits, treatment kits, homeopathic remedies, purported antiviral products, and PPE” according to Steve Francis, assistant director.

It is reassuring to see corporations and government standing up to these fraudulent suppliers. Providers need to consider compliance implications related to COVID-19 regulatory, supply chain, reimbursement and other areas of risk; likely, all operations have been impacted. Clinical teams created novel workflows to manage patient care but compliance officers, auditors, coders, CDI and HIS professionals have new tasks to perform to reduce risks in their areas of expertise.

I belong to a wonderful HFMA group called the C.A.R.E Forum. We’re a group of compliance officers, lawyers, auditors, regulatory analysts and HIM professionals that meets monthly via teleconference. During a recent call, this topic was raised and discussed; the following suggestions were shared for consideration by facilities and other providers. These are important areas for compliance focus:

HFMA Member Healthcare System Additions to 2020 Compliance/Audit Plan Necessitated by COVID-19 Pandemic, June, 2020

Financial Risks

Receipt of Funds from CARES Act

  • Proper Certifications Made
  • Analysis of Lost Revenue/Forms 990
  • Appropriate Use of Funds
  • Documentation of Use of Funds
  • Proper Approval for Disbursements
  • Costs Not Otherwise Reimbursed

Request/Receipt of FEMA Funds

  • Application for Funds
  • Documentation of Use of Funds
  • Funds Used for Approved Purposes
  • Costs Not Otherwise Reimbursed

Revenue Cycle Risks

  • COVID-19 Testing for Uninsured Patients
  • Cost Sharing Waivers for COVID-19 Claims
  • Refunds to Self-Pay Patient Collections Covered by Cost Sharing Waiver
  • Refund Process for Coverage Decisions Subsequent to Receipt of Payment from Fund
  • Medicare Advance Payment Reconciliation Process

Billing and Coding Risks

  • Proper Use of Modifiers and Condition Codes for COVID-19 Claims
  • Place of Service Indicator
  • Appropriate Technologies for Telehealth Services
  • Proper CPT-4 Code Assignment
  • Appropriate Diagnosis Coding for COVID-19 Services
  • Use of Time-Based CPT Codes for Telehealth Services

Policies and procedures (P&P) need to be reviewed and modifications made to meet new requirements based on state and federal guidance regarding reimbursements for COVID-19 testing and care, grants, loans proper documentation and coding, etc. In addition to the above suggested areas, P&P for supply chain management especially related to PPE and pharmacy should be revisited. Add updates as necessary, even temporarily to address the known risk of fraudulent activity by some suppliers. Make changes reflect the need to follow the latest requirements by state and local government as it applies to acquisition of PPE, medications, vaccines etc. and document changes as necessary as the pandemic matures.

At a time when employees are on furlough and cash flow for many providers is at an all-time low, it is still important to plan for compliance related needs. This may be a time to invest in trusted third-party consultants to help with policy updates if staff are unavailable or otherwise involved. Unfortunately, COVID-19 is not finished with us yet, but hopefully we are getting closer to the end. Once that happens and business returns to “normal,” audits will likely be imposed to track appropriate use of funds, reimbursement, coding and documentation. Those facilities and other providers who act now to address these needs can breathe a proverbial sigh of relief since they will have updated and documented P&Ps.  

Since it still unknown what the legal ramifications might be following COVID-19, flexibility and an open mind are necessary to stay current with the latest the pandemic brings—from the ER to central supply to HIS—all are impacted.

Barbara Aubry is a senior regulatory analyst with 3M Health Information Systems.


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