Compliance Issues

Relative To Coding, Billing,

Documentation, Reimbursement &

Payment Systems


The Compliance Era

The Federal Government has greatly expanded its enforcement efforts in the health care area during the past several years.  Enactment of HIPPA, Insurance Portability and Accountability Act, has significantly raised the ante in terms of the amount of auditing that is and will be done relative to coding, billing, documentation, reimbursement and payments to all types and levels of health care providers.  The Balanced Budget Act of 1997, BBA 1997, and the Balanced Budget Refinement Act, BBRA 1999, continues this trend to an even higher level.  More recently the Benefits Improvement & Protection Act, BIPA 2000 has been enacted which makes even more changes.

Hospitals, clinics and all types of health care delivery systems must take a keen interest in making certain that they are in compliance as much as possible.  The rules, regulations and directives from government programs such as Medicare and Medicaid are not always immediately understandable.  All those in the health care field must take the time and trouble to carefully examine what they are doing, how they are doing it, the documentation, the various contractual agreements they have, the coding, the quality of claims filed and the list goes on.

The reason for the necessity is that the recoupment, civil monetary penalties and even criminal prosecution are so severe that action to reduce risk by maintaining a careful compliance status is more than justified.

Abbey & Abbey, Consultants, Inc.

The consultants at Abbey & Abbey, Consultants, Inc., and the associated consulting firms in the Health Care Consulting Group, L.C., have for more than fifteen years been providing consultation in the compliance area.  Extensive experience has been gained through coding reviews, Charge Master reviews, developing policies and procedures, risk assessments, revenue enhancement and associated services.  As the focus of compliance has become sharper, the services of these consultants is also now honing down services that are explicitly designed to help keep hospitals, physicians and other health care provider entities within compliance in the billing, documentation, coding and reimbursement areas.

Attorney-Client Privilege

The services provided are of a highly technical nature.  If maintaining a good compliance stance is all that is of concern, then the consultation can be provided on a regular consultative basis.  However, if it is suspected that there may be significant and/or long term patterns of non-compliance, then it is generally recommended that our services be retained through legal counsel.  This provides a mechanism whereby the assessment, finding and recommendations of our consultants can remain confidential while corrective actions are taken.

Corporate Wide Compliance Program

The assessment, findings and recommendations relative to compliance in the billing, documentation, coding and reimbursement area are a part of a larger picture.  In the diagram below the general organization wide compliance program


is illustrated.  The top level of the organization must mandate that the organization - hospital, clinic, IDS - will be in compliance with all appropriate laws, rules, regulations and contractual commitments.  This mandate then translates into a Compliance Action Plan along with the organization infrastructure to support the process.  Including

·        Communication

·        Compliance Team & Coordinator

·        Compliance Education & Training

·        External Consultants Audits

This whole process addresses the full range of compliance issues including areas such as ADA  (American with Disabilities Act), FLSA (Fair Labor Standards Act), OSHA (Occupational Safety and Health Administration, just to name a few.

The key steps in setting up a program to meet the compliance challenge include:

·        Standards & Procedures

·        Oversight Personnel

·        Due Care In Delegation

·        Communication And Training

·        Steps To Achieve Compliance

·        Enforcement and Discipline

·        Response To Violations

The Medicare Fraud, Abuse and Anti-kickback laws along with other related issues surrounding payment systems then becomes one of several areas that the corporate wide compliance program must address.

Standard Of Conduct

The standard of conduct and requirements to be knowledgeable are quite strict.  In a technical areas such and billing and reimbursement, there are many rules and various interpretations of the rules.  However, physicians and executive management of health care organizations are held to a standard of knowing the various rules and making certain that they are followed.

Thus it become important not only to make certain the rules and regulations are being followed, there must be a systematic infrastructure that provides for continuing compliance.  For instance, the flow of critical coding, billing and reimbursement information must be established with all affect personnel and departments being kept fully informed on a timely basis.  Another example is coding changes along with claims generation rules that affect the ongoing updating of the Charge Master.

Coding-Claims-Billing-Reimbursement  Compliance Areas

The following table is divided into eleven areas of general compliance concerns in this area.  On the right are more specific subdivisions of concerns.

Outpatient Documentation

Quality, Legibility, Completeness, Accuracy

Documentation Standards

Ordering/Attending Physician

Documentation System

Location Of Documentation Development

Specialized Areas (Laboratory, Radiology)

Interface Of Payment Systems

Outpatient To DRGs

Outpatient To Physician - RBRVS

Outpatient To Subacute

Outpatient To Skilled Nursing-RUGs III

Outpatient To Home Health

Medical Necessity Standards

General Provision Of Services

Emergency Department Services

Observation Admit/Discharge

Hospital Admit/Discharge

Special Area Medical Necessity

Outpatient Coding

Accuracy And Completeness

Qualifications Of Personnel

Utilization Of Automated Systems

Sequencing Of Codes

Correlation Of Codes - HCFA-1500 - UB-92

Coding Policies And Procedures

HCFA’s Correct Coding Initiative

Physician Related

Face-To-Face Services

Medical Staff Bylaws And Policies

Incident-To Services

Specialty Clinics - Place Of Service

Outpatient Organization

Outpatient Department Requirements

Rural Health Clinics

Non-Physician Providers

PA, NP and CNS Independent Billing

Other Non-Physician Billing

Incident-To Services

Billing And Claims Process

Integrity Of Codes

Charge Master Code Overrides

Quality Of UB-92s Generated

Systematic Edit/Review Of Claims/Detailed Bills

Inclusion And Appropriateness Of Modifiers

Charge Master Related

Non-Covered Services

Static Coding Versus Dynamic Coding

Supply Charges

Equipment Charges

Personnel Time Charges

Correlation Of CPT/HCPCS To RCCs

Charge Explosion Reporting

Laboratory Bundling/Unbundling

Appropriateness Of Charge Descriptions

Consistency And Reasonableness Of Charges

Self-Administrable Drugs

Special Drugs/Supplies Reporting

Cost Report Related

Charge Master Categorization

Proper Development Of Cost Reports

Exclusion of NPP Salaries


Provider-Based Status

Other Areas

Ambulance Services-Hospice-SNF-Respite-Rehabilitation

 Compliance Checklists

The consultants at Abbey & Abbey, Consultants, Inc., have developed extensive checklists in given areas of compliance.  For instance, a number of compliance concerns surface in connection with the Charge Master.  When performing a Charge Master review these areas are addressed.  Documentation standards and level of service coding correctness has long been for physicians and hospitals.  While auditing guidelines may exist, it does little good unless the providers of services, those who develop the documentation, both know the standards and are sensitive to their use.  Thus, organizations must be willing to make changes to meet the various compliance standards and must understand the rules and regulations.  This means that there must be a heavy educational component for any compliance program.  This is especially true with a complex area such as coding, billing and reimbursement.  A major thrust of our work includes both education and developing an organizational infrastructure for out clients to meet the compliance challenge with a minimal amount of outside consultation.

Educational Programming

Training and education in various compliance issues such as correct coding, proper documentation development, proper billing procedures, maintaining Charge Masters and the like are offered by Abbey & Abbey, Consultants, Inc., through hospital associations, medical societies and other health care organizations.  In-house training sessions are also available to both better meet compliance concerns and to also enhance revenue generation for services provided.

Contacting Abbey & Abbey, Consultants, Inc.

  • Abbey & Abbey, Consultants, Inc.
    P.O. Box 2330
    Ames, IA 50010-2330
    Attn: Consulting
  • For further information, please email or call us at: