Corrective Action Plans

Developing A Corrective Action Plan for Your Health Care Facility

Nearly every Federal regulator in the health care industry has the ability to require or request that a Corrective Action Plan (CAP) be created. When a government regulator (CMS, ZPIC, OIG, FDA, OCR, DEA, AHCA, LARA) conducts an audit or survey and determines that certain areas of the health care company are not in compliance, it may be necessary to create a Corrective Action Plan.

Developing a good CAP can assist your health care entity in avoiding costly audits, increased frequency of inspections or surveys, regulatory/administrative action and even criminal charges. This should be done by your attorney and compliance officer to make certain that your CAP contains the required elements to meet the regulations implicated by your activities. It is important that the proper personnel is included in developing the CAP to secure involvement on all levels of your health care entity because, at the end of the day, your employees must be able to follow the CAP.

In developing a Corrective Action Plan, we generally use the “IERAIF” acronym. This stands for:

1. Identification
2. Evaluation
3. Root Cause Analysis
4. Action Plan
5. Implementation
6. Follow-Up: Effectiveness Checks

During the Identification phase, we determine what we are trying to fix – this is generally the violation found by the regulators. For instance, if the DEA takes issue with the storage of controlled substances, the CAP must address how to achieve compliance with the particular regulation. Sometimes, the regulators will not sufficiently identify the problem, and it will be necessary to examine and compare the regulations and your operations to identify the major areas of non-compliance. Often, it is necessary to involve your attorney to identify the specific regulations that your company may not be complying with.

During the Evaluation phase, you must look at the components of the problem and assess their impact on operations. You must clearly identify the consequences of the non-compliant area.

The Root Cause Analysis phase is really the essential aspect of the CAP; if you cannot identify the root cause of the problem, you cannot properly correct it. This phase is necessary is because regulators want to ensure that you understand the root cause in order to prevent repetition of the problem. There are many systems for finding the root cause of an issue, such as the “5 Whys” method and the fishbone diagram method. Both of these methods will help you find the root cause when beginning to tackle the broad issue you have identified during the Identification phase.

During the Action Plan phase, you must find a plan to solve the problem and root cause that you have uncovered. You must clearly articulate how the action plan has been carried out and implemented into your company’s operations.

Similarly, during the Implementation phase, you must identify how the CAP has been implemented. You must state how it has been communicated to all employees, how they were trained on the new changes, and potentially describe a test run of your new CAP.

Finally, during the Follow-Up phase, you must measure how the CAP works in solving the problem and root cause identified in the earlier phases. For instance, if a CAP was created to solve billing and coding issues, an audit of files to determine if codes were improperly billed would be required in the follow-up stage. You will want to articulate clear effectiveness checks that will be implemented over time, such as internal efforts as part of an overall compliance plan. Additionally, a health care organization may want external checks of effectiveness (such as a consultant) to show regulators that it has an interest in self-governance.

A CAP must clearly articulate all of the areas above in order to be accepted by the agency. If your CAP is rejected or if it is not followed, your organization may face increased audits, administrative action or potential civil/criminal culpability. Corrective Action Plans should only be created by compliance staff with extensive training in Health Care Compliance.

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