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What Is Medical Billing Compliance? 5 Ways to Protect Your Practice

As a healthcare provider, you know that accurate medical billing is critical to your practice’s financial stability. Non-compliance can have serious consequences for your practice, increasing the chances of reimbursement denials, fines, penalties, and in serious cases, even loss of licensure or litigation.

However, medical billing compliance is a complex and constantly evolving field. Healthcare organizations must stay on top of all applicable federal and state laws, Medicare and Medicaid guidelines, and private insurance contracts—and the rules are continually evolving.

As a law firm that works closely with healthcare providers on reimbursement denials, billing and compliance issues, and provider-payer disputes, we know how often errors and misunderstandings create financial stress. In this blog, we’ll discuss the importance of medical billing compliance and suggest ways your practice can improve its revenue cycle.

What Is Medical Billing Compliance?

Healthcare is a highly regulated industry. Your practice must adhere to many rules and regulations—and many of them relate to the billing and coding of healthcare and physician services. These rules and regulations come from many different sources, such as:

  • Federal laws, such as the Health Insurance Portability and Accountability Act (HIPAA), Affordable Care Act (ACA), and No Surprises Act
  • State laws, such as Illinois’ Fair Patient Billing Act
  • Medicare and Medicaid guidelines
  • Health insurance policies, which can include specific requirements related to billing and coding

When we talk about medical billing compliance, we are referring to systems and steps that help you meet these complex requirements. The goal of medical billing compliance is to ensure healthcare providers employ accurate, ethical billing practices.

As part of their medical billing compliance strategy, healthcare organizations often employ a variety of tactics and best practices, including staff training, regular audits and contract reviews, and the implementation of electronic health records systems and billing software.

Why Is Medical Billing Compliance Important?

If your healthcare organization does not meet its regulatory and contractual obligations, the consequences can be severe.

  • Overbilling or underbilling, which can result in lost revenue or even legal action
  • Reimbursement denials from Medicare, Medicaid, or third-party private insurance
  • Allegations of fraud and abuse
  • Fines, penalties, and legal consequences
  • Damage to your reputation

You don’t want to cut corners when it comes to medical coding and compliance. Even innocent errors and mistakes can cause major headaches for medical providers and professionals. Any fraud or abuse that’s discovered (and it will be discovered, sooner or later) will lead to serious consequences.

5 Ways to Help You Meet Your Regulatory and Contractual Requirements

1. Establish an Overall Healthcare Compliance Program

Maintaining compliance is an extremely complex process. You should have a comprehensive compliance program that outlines all the written policies and procedures you have in place to quickly prevent, identify, and correct any violations.

Aspects of a good compliance program might include:

  • Regular compliance training for all employees
  • Sytems that help improve the quality of clinical documentation, which can reduce the likelihood of coding errors
  • A consistent cadence of monitoring and auditing activities to identify issues
  • A standardized process for reporting and investigating potential compliance violations
  • Standard procedures for corrective action and mediation if violations are discovered
  • Ongoing risk assessment evaluations

2. Use Technology Wisely

Today, there are many automated tools and software applications that can help healthcare organizations stay on top of compliance, as well as improve overall efficiency and profitability. Computer-assisted coding and other advanced billing solutions can automate parts of the billing and coding process (like pulling documentation from electronic health records), create efficiencies, and reduce human error.

However, software and apps still require care and attention. You will need to identify which programs make the most sense for your organization and train your employees to use them effectively. Don’t be shy about asking questions and requesting support as you shop for and implement new programs. The more work you do up front, the better your experience will be later.

3. Regularly Review Your Healthcare Payer Contracts

Payer contracts contain dense legalese that isn’t easy to understand. Unfortunately, this can lead to billing and compliance inefficiencies, uncertainties, and mistakes.

Don’t just skim your payer contracts and assume that things will work out in your favor. You need to carefully read the fine print and understand what is in your contracts, including:

  • Dispute resolution requirements
  • Fee schedules
  • Network requirements
  • Your contract’s definition of medical necessity

This not only helps you stay in compliance and improves your “clean claim” rate, but it also protects you from being taken advantage of by the insurance company. (And if you need help translating your payer contracts into plain language, reach out to the experienced healthcare attorneys at Bryant Legal Group.)

4. Perform Regular Coding and Billing Audits

Despite your best efforts, compliance mistakes can still happen. When they do, it’s much better for you to find and correct those mistakes yourself, rather than wait for the government or insurance payer to discover them.

Your team should be regularly reviewing claims, medical records, financial records, and other documentation to determine things like:

  • Were claims accurate and complete?
  • Were the correct codes used for the medical services provided?
  • Were they supported by the appropriate documentation?
  • Were claims compliant with all applicable regulations?
  • Was billing conducted in a timely manner?
  • Did the practice follow up promptly on denied claims?

The findings of the audit should be fully documented for future reference.

Many healthcare organizations rely on outside consultants to conduct compliance audits. This can be a good choice if your in-house team lacks the time or expertise to conduct robust audits.

5. Respond Promptly When Claims Are Denied

According to the American Health Information Management Association, the initial claim denial rate in the healthcare industry is about 20 percent—and more than half of those claims are never reworked or resubmitted, even though most are recoverable.

Once a claim is denied, you may have a very short window to appeal under the terms of the payer contract. Missed deadlines is one of the most common reasons claims end up unpaid. So, be sure your team is following up quickly, reviewing claims for errors, and providing any additional documentation necessary before resubmitting.

Struggling With Compliance Issues or Reimbursement Denials? Work With an Experienced Healthcare Reimbursement Attorney

A healthcare reimbursement attorney, sometimes called a medical revenue attorney or health care lawyer, can be a valuable ally for healthcare organizations of all sizes.

Among other things, your attorney can:

  • Investigate provider billing practices to ensure medical billing compliance
  • Advise and guide you on best practices for claims reimbursement methods and procedures
  • Help you understand your current payer contracts
  • Help you negotiate or renegotiate new payer contracts
  • Handle claims, audits, recoupments, disallowances, and administrative proceedings
  • Defend you against unreasonable legal challenges, including fraud or abuse claims

Bryant Legal Group: Chicago’s Premier Law Firm for Medical Practices

Medical practices are highly specialized businesses with extremely complex regulatory and compliance requirements. You should only trust your practice’s legal needs to a firm with extensive experience and a strong reputation representing healthcare professionals and organizations.

Bryant Legal Group helps physicians, private practices, and large healthcare organizations resolve payer-provider disputes; negotiate contracts; improve their coding, billing, and revenue cycle management; and more. We’d love to talk to you about your current challenges and guide you toward your next steps.

To schedule your consultation, give us a call today at (312) 313-6179.