Running a healthcare practice involves more than just patient care. It demands a strong understanding of the rules that govern reimbursement collection. Navigating the world of medical billing can feel complex, but staying compliant is essential for your practice’s financial health and reputation.
This guide will break down the core concepts of medical billing compliance. It will cover everything you need to know, from its significance to key elements and essential laws and regulations that govern medical billing and coding.
Consider this your roadmap to building a compliant and thriving healthcare practice. So, without further ado, let’s get started!
What is Healthcare Billing Compliance?
Medical billing compliance can be defined as charging legally and accurately for the medical services physicians and facilities provide. Simply put, it involves following the federal and state laws and guidelines set forth by Medicare, Medicaid, and other commercial payers. In case of non-compliance, healthcare facilities and providers may struggle to stay profitable or continue the practice.
Significance of Medical Billing Compliance
Do you want a healthier revenue cycle? Then, timely and accurate claim submissions are integral. But even when your team strives to ensure accuracy and stay ahead of deadlines, errors may occur.
The following are some benefits of medical billing compliance that highlight why you must remain vigilant:
- It ensures a steady cash flow since physicians and facilities receive timely and fair reimbursements.
- It prevents waste, fraud, and abuse in the healthcare system.
- It safeguards your practice’s reputation and the overall healthcare system’s integrity.
- It protects your healthcare practice from liabilities as a result of fraudulent billing.
- It enhances the patient experience.
- It protects patients from being billed incorrectly.
Key Components of Medical Billing Compliance
Below, we have discussed the main components of healthcare billing compliance.
Coding Accuracy
Accuracy and specificity in coding are essential when it comes to billing compliance. You must accurately code every rendered procedure using the most current version of the relevant coding systems. Since these codes directly impact reimbursements, any error or inconsistency may lead to payment delays, denials, or penalties.
Comprehensive Documentation
Your documentation should support every billed procedure. Besides, the patient’s medical record, diagnosis, and symptoms must establish the medical necessity and appropriateness of the services. Inadequate documentation or lack of medical necessity may lead to serious repercussions, including denials, audits, lawsuits, and financial penalties.
Routine Audits
Conducting regular audits (internal and external) is another way of ensuring medical billing compliance. These checks can help uncover inconsistencies in the billing workflow, such as coding errors, that lead to non-compliance. Moreover, audits may reveal important insights and trends. These findings help you create smart plans to improve your medical billing and coding compliance.
Compliance Training
You should invest in continuous billing compliance training. It should cover best practices for medical coding, supporting documentation, the billing process, and relevant laws and regulations.
Essential Laws & Regulations Governing Medical Billing
Here’s a list of all the healthcare billing compliance laws that govern this industry practice.
HIPAA-Compliance Rules
The Health Insurance Portability and Accountability Act (HIPAA) is a federal law that safeguards the security and privacy of patients’ protected health information (PHI).
However, it does more than protect the patient’s information. It sets rules for electronic transactions and gives patients rights over their health information.
Breaking HIPAA rules can lead to penalties. These fines range from $100 to $1,500,000.
The final penalty amount per violation depends on how much someone is at fault.
The HIPAA compliance rules emphasize protecting the confidentiality and integrity of patient data during electronic transactions. An example of it is submitting claims electronically.
Thus, providers and facilities must acquire patient authorization before disclosing PHI, except in some permitted circumstances. For instance, the HIPAA rule does not apply to the Department of Defense (DoD). You can check the details about the exceptions on the HIPAA Journal website.
Additionally, under this rule, the patient can access and obtain copies of their medical records.
Therefore, healthcare practices must maintain detailed records of PHI disclosure. Moreover, facilities should implement physical, technical, and administrative safeguards. This stops unauthorized access and data breaches, keeping PHI secure.
Fraud & Abuse Prevention Rules
There are some medical billing compliance-related laws to prevent fraud and abuse. But before we explore these laws, let’s first understand what fraud and abuse mean in medical billing.
Fraud means twisting facts or lying on purpose to get money unfairly. For instance, billing for procedures that the physician did not perform.
Abuse, on the other hand, means not following good healthcare practices. This leads to high costs, but without the intention to deceive. For instance, using a higher code (upcoding) or billing separately for services that should be billed together (unbundling).
The following are the fraud and abuse laws to ensure billing compliance:
Anti-Kickback Statute
This law prohibits the exchange of value for referrals.
Penalties include fines of up to $25,000, jail time of up to five years, and being banned from federal programs.
Stark Law
It prohibits physician self-referrals for designated health services. In the case of violation, civil penalties of up to $15,000, willful circumvention penalties of $100,000, and exclusion from Medicare/Medicaid apply.
False Claims Act (FCA)
This law stops people or groups from sending fake claims to the government. FCA penalties can be as high as $27,894 for each violation.
Coding Compliance Rules
Some established coding guidelines you must follow to ensure medical billing and coding compliance include the Current Procedural Terminology (CPT) and International Classification of Diseases (ICD) codes.
Both coding systems ensure accurate and consistent coding for medical diagnoses and procedures, enabling error-free billing and fair reimbursement.
CPT Coding System
It offers medical codes that describe services and procedures that physicians perform. The American Medical Association (AMA) manages it. CPT codes are necessary for accurate billing, documentation, and reimbursement of procedures.
ICD Coding Guidelines
It classifies and codes symptoms, diagnoses, and procedures. The World Health Organization (WHO) developed the ICD coding system. It facilitates international comparability of health statistics while collecting, classifying, processing, and presenting.
Summary
Phew! That was a detailed guide. If things seem overwhelming, it is understandable. But not if we revisit the key takeaway. So, before concluding, here’s a quick walkthrough:
First, we explained that medical billing compliance means charging legally and accurately for the rendered care services following rules and regulations set forth by the state, federal, and commercial insurance payers.
Next, we looked at the benefits of adhering to these policies and guidelines. These include safeguarding patient data, charging the payers fairly, protecting patients from being charged extra, and upholding the healthcare system’s integrity.
Moving forward, we shared the key components of billing compliance, including coding accuracy, detailed documentation, routine audits, and training.
Finally, we discussed the essential compliance laws that govern medical billing and coding. These include HIPAA, ICD, CPT, Stark Law, Anti-Kickback Statute, and the False Claims Act.Are you still confused about navigating the complex regulatory landscape of medical billing? Don’t worry! You can partner with MediBillMD and get their professional medical billing services to ensure compliance and profitability.
