At the top of the medical coding and billing career ladder is the role of a corporate compliance officer. These professionals are cognizant of the many regulations that govern the assignment of medical codes to describe medically necessary services. Compliance refers to compliance to legal mandates at the federal and state level, code definitions and their documentation requirements, coding methodologies as established by professional bodies in the healthcare industry, and policies designed by private third-party payers to manage the accurate flow of medical information.

Guaranteeing Financial Solvency

To ensure that the healthcare reimbursement system functions transparently without fraud or abuse, compliance to the standards of accurate coding and claims submission is paramount to the financial success of any healthcare company. Each medical specialty and arena of care are governed by different reimbursement systems that place a premium on different aspects of the coding system. Whether a provider is paid fee-for-service or under a prospective payment system (PPS), medical codes must accurately reflect what occurred during a patient encounter.

When medical claims are submitted free from coding errors, healthcare institutions can be assured that the payment received is accurate and appropriate. Third-party payers, whether commercial insurers or government healthcare programs, retain the right to audit medical records to ensure that payments have been made for properly delivered, medically necessary services to the patient of record. When an audit reveals that codes are not supported by documentation in the patient’s medical record, previously disbursed moneys are recouped by the payers, and contractual fines may be imposed for non-compliance with established coding norms. Legal action can be taken by payers who suspect fraudulent or abusive billing practices from healthcare providers, resulting in expenses that could have been avoided if clean claims were submitted in the first place.

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It is the threat of legal action, as well as the loss of already-paid claims, that make a robust compliance program a fiscally prudent component of an institution’s business operations. Experienced and credentialed medical billers and certified medical coders are the backbone of the corporate integrity of healthcare billing operations.

Compliance Oversight

While medical billing and medical coding compliance is the role of everyone involved in the delivery of healthcare, corporate compliance personnel monitor coding and billing strategies as they are practiced in a given institution, be it in a small medical practice or in a large multi-location network of clinics. Compliance personnel audit medical records to guarantee that documentation supports the information reported in medical claims.

The chain of healthcare delivery starts with the patient scheduling an appointment. At this point, every interaction needs to be documented appropriately in the patient’s medical record. The components of every encounter for evaluation and management of a patient’s condition needs to included in the healthcare provider’s progress note in order to justify the level of service denoted by code in the Healthcare Common Procedure Coding System (HCPCS). The diagnoses determined by a provider must be described to the highest level of specificity by a code found in the International Classification of Diseases, 9th Edition, Clinical Modification (ICD-9-CM). Every lab test or procedure must be accompanied by a specific written or documented oral order from the attending provider to justify the performance of that service.

A compliance auditor for a healthcare institution examines available documentation to determine that medically necessary services are provided, and that codes are correctly assigned for payment or reporting purposes. Not all codes are directly related to financial reimbursement. Under Medicare’s Physician Quality Reporting System (PQRS, formerly known as PQRI), healthcare providers are awarded incentive payments at the end of a specific period if they code quality measures that they perform over the course of a patient’s treatment. As with procedural codes, quality measurement codes must be supported by documentation in the patient’s medical record.

Compliance personnel review documentation and compare it to the codes that are reported to third-party payers. When they find systemic shortcomings in documentation, they review their findings with providers to correct deficiencies, and to improve documentation protocols to ensure that healthcare claims match the services that were actually delivered.

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The Regulatory Environment

All third-party payers are sensitive to the possibility of healthcare fraud and abuse. Fraud is defined as billing for services that were not delivered. Abuse is defined as billing for services that are billed inappropriately. In most medical practices, fraud is not as worrisome an issue as abuse. Abuse of the healthcare reimbursement system includes unbundling services that are accurately described by a single code for additional payment, billing for services that are not documented as being medically necessary, and billing for services that are not adequately substantiated in the patient’s medical record.

Medical billing compliance revolves around making sure that what is in the patient’s medical record is accurately transcribed into industry-standard medical code. While commercial insurance companies routinely request copies of medical records for review, the third-party payers who are most active in trying to detect and track fraud and abuse are the federal Medicare program and the Medicaid programs that are administered by the states.

The U.S. Department of Justice and the U.S. Department of Health and Human Services have established Health Care Fraud Prevention and Enforcement Action Teams (HEAT) to combat fraudulent billing practices. CMS (Centers for Medicare and Medicaid Services) has employed Recovery Audit Contractors (RACs) to review submitted claims to identify questionable coding practices through inappropriate code combinations and use of coding modifiers to bypass claim edits. States are employing Medicaid Integrity Contractors (MICs) to perform the same role for their Medicaid programs. Each year, new programs are introduced to ensure medical billing and coding compliance.

Career Opportunities

Coding and billing compliance is not a entry-level position. It requires a familiarity with all the issues that surround a given specialty or institutional setting. For instance, someone who is familiar with billing in an outpatient setting will not immediately be effective when enforcing compliance in a skilled nursing facility (SNF) or for a durable medical equipment, prosthetics, orthotics and supplies provider (DMEPOS). Experience and training in a given field of expertise opens doors to higher opportunities on the medical billing and coding career ladder.

Every professional medical biller and certified medical coder starts their career with a baseline of knowledge about the healthcare reimbursement field. With the current regulatory environment, employers look for candidates who have proven they have mastered the issues at hand. This starts with completing an accredited education program, followed by experience in a given medical specialty or type of institution where services are delivered. Dermatology auditors have experience in dermatology. Ambulatory surgical center auditors have experience in ASC coding and billing.

Potential employers are not limited to healthcare institutions. Third-party payers employ their own compliance auditors to review documentation to ascertain if services have been billed and paid appropriately. As more RACs and MICs are formed to audit medical claims, there are more opportunities for professionals with the appropriate skills and knowledge base to profitably offer their skills and insights into more diverse situations. In order for the healthcare reimbursement system to work effectively and efficiently, trained professional medical billers and certified medical coders with experience in coding and billing compliance are a valuable commodity in the healthcare marketplace for employers on either side of the process.