Medicare Part B Billing Compliance Guide

Learn What it Takes to Effectively Manage Medical Billing Compliance Under Medicare Part B

Healthcare providers and other organizations that bill the Centers for Medicare and Medicaid Services (CMS) under Medicare Part B need to prioritize billing compliance. Non-compliance can lead to allegations of submitting “false or fraudulent claims,” and this can potentially lead to civil or criminal penalties. Learn what it takes to implement and effectively manage a structured compliance program from the lawyers at Oberheiden PC.

Healthcare compliance is multi-faceted. From managing HIPAA compliance to managing compliance with public and private payors’ billing requirements, providers and other healthcare organizations can face numerous complex compliance obligations, and failure to meet any of these obligations can lead to serious adverse consequences.

This includes failure to meet organizations’ compliance obligations when billing Medicare Part B.

Medicare Part B is among the most important programs in the federal healthcare system. The government spends more than half a trillion dollars on Medicare Part B coverage annually. Unfortunately, fraud under the program is a major concern. As a result, the Centers for Medicare and Medicaid Services (CMS) expect medical providers to proactively manage compliance with Medicare Part B’s billing rules, and its auditors routinely inspect providers’ billing records for evidence of non-compliance.

What Medicare Part B Covers (and Doesn’t Cover)

Medicare Part B covers two broad categories of medical services: (i) medically necessary services; and, (ii) preventive services. CMS defines medically necessary services as those that, “meet accepted standards of medical practice to diagnose or treat [a] medical condition,” while it defines preventive services as those that, “prevent illness (like the flu) or detect it at an early stage when treatment is likely to work best.”

As a result, Medicare Part B does not cover services that lack medical necessity and a preventive purpose. Medical billing audits under Medicare Part B frequently focus on these core requirements—and, as a result, these are two key areas of focus when building a robust compliance program. But, there are other important considerations as well, and providers must comprehensively address their compliance obligations to avoid medical coding violations that can lead to claim denials (among other consequences).

5 Key Aspects of Medicare Part B Billing Compliance

Building a robust compliance program starts with understanding what it takes to manage compliance effectively. With this in mind, here are five key aspects of Medicare Part B compliance:

1. Billing and Coding Compliance (False Claims Act Compliance)

Billing and coding errors are easily among the most common types of Medicare compliance violations. To maintain consistent compliance, providers and other organizations need to implement custom-tailored billing process controls, and they must maintain documentation standards that allow them to consistently submit accurate billings.

From lack of medical necessity to non-compliance with local coverage determinations, various issues can cause providers to submit fraudulent billing statements for physician services and other items. Fraudulent billings under all Medicare programs violate the federal False Claims Act, and they can lead to steep financial penalties as well as other corrective action.

2. Anti-Kickback Statute (AKS) Compliance

Along with coding accuracy, Anti-Kickback statute (AKS) compliance is another key compliance area for providers and other organizations throughout the healthcare industry. The AKS is a federal law that prohibits providers and other organizations from using Medicare funds to pay for referrals. While there are safe harbors under the AKS, establishing compliance with a safe harbor requires thorough documentation, and providers should have this documentation in place before they engage in transactions that implicate the AKS’s prohibitions.  

3. Appointing a Compliance Officer

To effectively manage compliance oversight on a consistent basis, organizations that bill Medicare Part B should appoint a compliance officer who holds primary responsibility for ensuring that they properly bill for services rendered. Among other things, this includes making sure they maintain adequate medical records and other clinical documentation, as well as making sure they follow written policies to ensure the submission of accurate reimbursement requests. Compliance officers should be sufficiently knowledgeable to manage and assess compliance with providers’ other regulatory requirements as well.

4. Identifying and Addressing Billing Errors

Even with comprehensive Medicare Part B compliance programs in place, providers and other organizations still need to take proactive measures to monitor for duplicate billing, upcoding, unbundling, and other compliance failures. When these failures happen, addressing them promptly is key for avoiding unnecessary liability. If a Medicare fee-for-service auditor uncovers a billing error that could—and should—have been corrected, this can significantly increase the risks involved. In these cases, the US Department of Health and Human Services (HHS) can seek additional penalties—and it can even work with the US Department of Justice (DOJ) to pursue criminal fraud charges if warranted.

5. Documenting Compliant Claim Practices

Avoiding allegations of fraud, waste, and abuse during a Medicare audit or an HHS investigation requires comprehensive documentation of Medicare Part B billing compliance. Even if a provider’s claim submission practices are compliant, documentation gaps can lead to penalties that could—and should—have been avoided. As a result, maintaining compliance and documenting compliance should go hand-in-hand.

Building a Comprehensive Medicare Part B Billing Compliance Program

Just as there are several key aspects to Medicare Part B billing compliance, building a comprehensive compliance program is a multi-step process. The key steps in the process include:

• Identifying All Applicable Standards – All services and items (including durable medical equipment) billed to Medicare Part B must meet the standards defined by all applicable national coverage determinations (NCDs) and local coverage determinations (LCDs). Accurate coding also requires use of the correct CPT, HCPCS, and ICD-10 codes, and providers and other organizations must comply with the Anti-Kickback Statute and other applicable federal laws as well. As a result, building an effective compliance program starts with comprehensively identifying an organization’s compliance obligations.
• Developing Custom-Tailored Policies and Procedures – After identifying their specific compliance obligations, organizations should work closely with their compliance counsel to develop custom-tailored policies and procedures. These policies and procedures should address all pertinent areas of compliance and be designed with implementation in mind.
• Providing Robust Staff Training – Training staff on coding requirements and documentation standards is essential for effectively managing Medicare Part B compliance. As a result, after developing custom-tailored policies and procedures, conducting robust staff training is the next step.
• Implementing Documentation Standards and Retention Protocols – As we discussed above, maintaining adequate compliance documentation is critical for avoiding unnecessary recoupments and penalties. Organizations should ensure that their documentation clearly justifies the diagnosis and treatment provided in order to support their submitted claims, and they should document their internal compliance monitoring and enforcement efforts as well.
• Proactively Managing Compliance On an Ongoing Basis – Organizations should rely on their compliance officers to lead their efforts to proactively manage compliance on an ongoing basis. Along with actively monitoring billing and documentation compliance, this includes monitoring for any changes in (or additions to) organizations’ compliance obligations.

FAQs: Managing Compliance Risks When Billing Medicare Part B

Schedule a Free Initial Consultation with a Federal Healthcare Compliance Lawyer Today

To discuss your practice’s or business’s Medicare Part B compliance needs with a senior federal healthcare compliance lawyer at Oberheiden PC, contact us today. Call 888-680-1745 or contact us online to schedule a free initial consultation.

Additional Resources

• Medicare Audit & Appeals Lawyer
• Medicare Part A Billing Compliance Guide
• ZPIC Audit Defense Lawyers
• Healthcare Audits
• Healthcare Fraud Investigation Defense
• Home Health Fraud – Common Characteristics