An annual compliance checklist ensures billing departments meet all CMS
and payer requirements. The checklist covers 10 critical areas: coding
accuracy, documentation standards, NCCI edits, modifier usage, timely
filing, prior authorization, payer credentialing, OIG exclusion checks,
HIPAA compliance, and claim status tracking. Systematic compliance
auditing reduces audit risk by 60-80%, according to CMS reports.
Practices completing annual checklists report 40% fewer denials and 30%
faster payment cycles.
Who Needs a Compliance Checklist?
Every medical billing department. Large hospitals employ dedicated
compliance officers. Medium practices assign compliance to revenue cycle
directors. Small practices delegate to senior billing staff. Regardless
of size, all providers must audit compliance quarterly at minimum. Lack
of documented compliance program increases audit penalty assessments by
25-50%.
Key Requirements
Coding accuracy: Audit monthly. Sample 50 claims. Check diagnosis and
procedure codes match documentation. Error target: under 2%.
Documentation: Audit monthly. Verify E/M codes supported by complexity
or time. Check for cloned notes. Error target: under 3%.
NCCI edits: Update quarterly. Verify no Column 1/Column 2 bundles
billed without modifiers. Check MUE compliance. Error target: under
2%.
Modifier usage: Audit monthly. Verify Modifier 25 applied clinically.
Check NCCI allowed modifiers. Modifier 25 should be under 50% of
procedure claims.
Timely filing: Track all claims. Ensure submission within 120 days of
service. Compliance target: 100%.
Prior authorization: Verify PA obtained before service. Maintain
approval documentation. PA compliance target: 95%+.
Payer credentialing: Verify provider credentialing current with all
payers. Update yearly. Target: 100% current.
OIG exclusion: Check SIED/LEIE database monthly. Verify no employees,
contractors, or referring physicians are excluded. Target: 100% clear.
HIPAA: Verify standard transactions (837/835). Check minimum necessary
on claims. Annual training mandatory. Compliance: 100%.
Claim status: Track claim volume, days in accounts receivable, denial
rates, and appeals. Monthly reporting to management.
Timeline & Enforcement
Compliance audits should run monthly with quarterly summary reports.
Annual comprehensive review required by management. CMS expects
documented compliance programs. Lack of compliance documentation
increases penalties and suggests institutional negligence. Practices
with compliance programs receive reduced penalties in enforcement
actions.
How to Comply
Assign a compliance coordinator. Designate senior billing staff
responsible for audit coordination and documentation.
Create audit templates for each of the 10 areas. Document sample
selection, findings, error rates, and corrective actions.
Schedule monthly audits on high-risk areas. Quarterly comprehensive
audits covering all 10 areas.
Report audit findings monthly to department managers. Quarterly
summary to executive leadership. Document management responses.
Implement corrective actions on any finding exceeding error
thresholds. Re-audit corrected area in following month.
Maintain all audit documentation. Organize by month/quarter/year for
easy retrieval during regulatory review.
Common Questions
How often should compliance audits run?
Monthly internal audits are recommended. Audit 50-100 claims monthly
on high-risk areas (modifier 25, E/M codes, documentation). Quarterly
comprehensive audits covering all 10 compliance areas. Annual
management review of audit findings and corrective actions.
What triggers corrective action requirements?
Audit findings above 5% error rate, patterns of non-compliance, and
peer benchmark outliers trigger corrective action. Corrective action
plans should include: root cause analysis, specific corrective steps,
timeline for implementation, and follow-up audit.
How should compliance be documented?
Maintain audit reports with sample selection, findings, error rates,
and corrective actions. Document staff training with attendee names,
dates, and topics covered. Keep OIG exclusion check records. Store
corrective action plans with completion dates.