Healthcare Regulatory Compliance & the Revenue Cycle
Connect regulatory compliance requirements to revenue cycle operations and understand the consequences of non-compliant billing.
By the end of this lesson you can
- Distinguish an error from abuse from fraud
- Describe the major laws governing healthcare claims
- Recognize the billing patterns that draw scrutiny
- Respond appropriately when asked to submit something unsupportable
Lesson Notes
Read through the key concepts before you try the challenge.
Where a mistake becomes something else
You are asked to change a code on a claim.
A provider asks you to submit a higher-level code on a note that does not support it, because the practice is behind on revenue. Complying would make you a participant in submitting a false claim, and 'I was told to' has never been a defense.
Your task: Know where the line is, and know the process for what to do when someone asks you to cross it.
| Means | Turns on | |
|---|---|---|
| Error | An unintentional mistake, corrected when found | No intent |
| Abuse | Practices inconsistent with sound billing that cause unnecessary cost | Pattern, without proven intent to deceive |
| Fraud | Knowing misrepresentation to obtain payment not entitled to | Knowledge and intent |
| Law | Prohibits |
|---|---|
| False Claims Act | Knowingly submitting false claims to the government. Includes whistleblower provisions |
| Anti-Kickback Statute | Paying or receiving anything of value for referrals of federally funded services |
| Stark Law | Certain physician referrals to entities they have a financial relationship with. Strict liability — intent is not required |
| HIPAA | Improper use and disclosure of PHI |
| Exclusion authority | Excluded individuals participating in federal healthcare programs |
When you are asked to code above the documentation
A provider asks for a higher-level code than the note supports.
- 1
Treat it as a documentation question first.
Providers are often genuinely unaware of what a level requires, and the work may well have happened without being written down. 'The note does not currently support that level — was there more?' opens the legitimate route instead of starting a confrontation.
- 2
Offer the proper mechanism: amend the documentation.
If the work occurred, the provider may amend the note through the record's amendment process, dated and attributed. A properly amended note makes the higher code correct. This is the real solution and it is available.
- 3
If the work did not occur, decline clearly and without hostility.
'I can't code above what the documentation supports' is a complete answer. You are stating the rule you work by, not making an accusation. Most requests end here.
- 4
If pressed, escalate through compliance rather than deciding alone.
A repeated request is a compliance issue rather than an interpersonal one. Using the escalation route protects the practice, the provider, and you, and it creates a record that you raised it.
- 5
Document what was asked and what you did.
In any later investigation, who knew what becomes central. A dated contemporaneous note is worth far more than recollection.
Result: Either an amended note that supports the code, or the original code standing — with the exchange documented.
Documentation question first, legitimate route offered, clear decline, escalation rather than solo judgment, and write it down.
Compliance Programs in Healthcare
Healthcare organizations are required to maintain formal compliance programs that prevent, detect, and correct violations of applicable laws and regulations.
- OIG (Office of Inspector General) compliance guidance
- False Claims Act — penalties for knowingly submitting fraudulent claims
- Anti-Kickback Statute — prohibits payment for referrals
- Stark Law — prohibits physician self-referral for designated health services
Compliance and the Revenue Cycle
Billing compliance means that every claim submitted accurately reflects the services documented in the patient record. Upcoding, unbundling, and billing for services not rendered are all forms of fraud.
Challenge
Apply what you've learned in this lesson.
What is 'upcoding' in healthcare billing?
Finished this lesson?
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