Corrective Action Plan - "The New Demand from Payors" - DoctorsManagement Corrective Action Plan - "The New Demand from Payors" - DoctorsManagement

Corrective Action Plan

“The New Demand from Payors”

by Sean Weiss, Partner & VP of Compliance

Audits are nothing new but the requirements tied to them are in a lot of cases. For years I have talked about and encouraged clients to create Corrective Action Plans (CAPS) when they uncover something that requires adjustments and possibly refunds to The CMS. I personally like CAPS because they demonstrate during an investigation an organization’s “Good Faith” in complying with statutes, regulations, guidelines and laws. However, creating a CAP is not something that should be done without guidance from a health care centric attorney to ensure the work product is protected to the extent the law allows.

Within an organization, if one looks long and hard enough, you can always find something questionable – just like if a police officer gets behind you on a highway and they follow you long enough, they can find a reason to pull you over. Within health care, things are often subjective and more than not shaded in grey to ensure enough of a pause to create noise.

I have had some attorneys tell clients to never create CAPs because you never want something in writing. I honestly disagree with that completely. Yes, of course you want to be measured with what you put in writing, but at the same time the whole reason for CAPs is to demonstrate compliance with Auditing and Monitoring, which as we know is one of the Seven Steps of an Effective Compliance Plan. Putting aside personal beliefs of what one versus the other has to say about them, look at the fact that insurance companies are now requiring them as part of a settlement agreement or imposing them as part of the punitive portion of an audit.

I just got done working on a case for a client in the Midwest who was hammered by a big five payer in the neighborhood of $1.7mm. Regardless of the fact we absolutely disagreed with their findings and their own expert’s admission that she knew hardly anything regarding the type of surgeries the provider was performing and put aside the fact they did not have an actual policy for this type of service; the payer still demanded a CAP because they felt the provider unbundled services and appended modifiers incorrectly as well as billed for levels of E/M Service that were not supported by Medical Necessity. Keep in mind they agreed to a settlement of $125 down from $1.7mm. They absolutely refused to accept the settlement payment without the CAP and on two (2) occasions told us without a CAP they will disregard the settlement and initiate a demand for refund of the $1.7mm.

For the past decade and even longer, Incident-to and Split/Shared Services has been a thorn in everyone’s side. I have helped countless clients through the process of drafting policies and procedures, corrective action plans, and educating their staff on the rules and billing guidelines of these service types. Below, I have provided a Sample CAP to help you with any potential issues you have uncovered or may uncover when auditing these type services and the foundation to being to create your own CAP.


What to do next…

  1. If you need help with an audit appeal or regulatory compliance concern, contact us at (800) 635-4040 or via email at
  2. Read more about our: Total Compliance Solution

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