Medicare Part A Billing Compliance Guide

Learn What Providers Need to Know About Medical Billing Compliance Under Medicare Part A

Medicare billing compliance requires a comprehensive and custom-tailored approach. For healthcare organizations that bill under Medicare Part A, submitting claims that do not comply with the program’s requirements can lead to steep penalties. This guide covers the key aspects of developing and maintaining compliant Medicare Part A billing practices.

The Medicare billing requirements under Part A apply to all healthcare organizations that bill for inpatient care, hospice care, skilled nursing, and home health services. Under the Medicare billing system, participating organizations are required to implement billing procedures that are designed to ensure compliance, and they can face financial penalties if they receive improper payments due to the submission of fraudulent claims.

All claims submitted under Medicare Part A must comply with the rules that the Centers for Medicare and Medicaid Services (CMS) have put in place, and providers must be prepared to substantiate compliance when necessary. In the event of a Medicare audit, having affirmative documentation of compliance on-hand can be the difference between closing the audit efficiently and facing severe penalties.

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

Medicare Part A, which is part of “original Medicare,” covers in-patient care at hospitals and skilled nursing facilities. It also helps cover hospice care and some forms of home health care.

As a result, when it comes to effectively managing Medicare Part A compliance, ensuring that providers are billing for eligible services (and only billing for eligible services) is a key first step. As we discuss in greater detail below, staff training is a key aspect of compliance program implementation—and, while human error will always be a concern, providing staff members with the information they need to make the right decisions can be key to mitigating providers’ risk, avoiding major headaches, and ensuring that they can take corrective action in a timely manner when necessary.

5 Key Aspects of Medicare Part A Billing Compliance

Ensuring that all services billed under Medicare Part A comply with CMS’s requirements requires a comprehensive and custom-tailored approach. With this in mind, here are five key aspects of Medicare Part A billing compliance:

1. Medical Coding

All healthcare providers that bill under Medicare Part A need to prioritize medical coding compliance. Audits conducted by Recovery Audit Contractors (RACs) and CMS’s other audit contractors target improper payments—and these auditors focus specifically on potential coding violations.

Coding compliance is a substantial undertaking; and, while providers can use software to help them code and bill correctly, providers cannot rely on their billing software exclusively. Rather, they must have written policies and procedures in place that are designed to both: (i) ensure that their billing software bills correctly; and, (ii) ensure that any improper billings are promptly corrected.

2. Medical Necessity

Medical necessity is a fundamental requirement for all billings under Medicare Part A. Accurate documentation that supports medical necessity for all services billed is essential; and, for inpatient admissions, admission must be clinically justified. Lack of medical necessity is a common allegation in Medicare audits; and, when audited providers cannot affirmatively demonstrate medical necessity, they can face allegations of noncompliance regardless of whether their billed services were medically appropriate.

3. Patient Documentation

Medicare-participating providers need to ensure that they properly generate and store all required medical records, including electronic health records (EHR). Patient documentation should reflect the services provided at the time of care (in addition to reflecting the medical necessity of these services). Maintaining proper patient documentation is important for other reasons as well. For example, Medicare claims must generally be submitted within 12 months of service, and even simple oversights (i.e., missing dates) can lead to claim denials.

4. Billing Documentation

Along with maintaining comprehensive patient documentation, maintaining comprehensive billing documentation is also key. Here too, the purposes of effective document management and retention are twofold: (i) maintaining comprehensive billing documentation allows providers to manage compliance effectively; and, (ii) in the event of an audit, having documentation of compliance on-hand can be critical for avoiding unnecessary consequences.

5. Addressing Billing Errors and Denied Claims

While Medicare-participating providers should take the necessary steps to ensure that they properly bill under Medicare Part A, they should also have procedures in place to address billing errors and denied claims when necessary. Among other things, this includes implementing internal auditing procedures and ensuring that claim denials are reported to appropriate internal personnel. Crucially, improper claim denials are not uncommon; so, when providers receive denials, they should also follow established internal procedures to determine if an appeal is warranted.

Building a Comprehensive Medicare Part A Billing Compliance Program

Building a comprehensive Medicare Part A billing compliance program is a multi-step process. The major steps in the process are as follows:

• Conducting a Comprehensive Compliance Needs Assessment – The first step is to conduct a comprehensive compliance needs assessment. While all healthcare organizations are broadly subject to the same Medicare billing rules and regulations, different organizations will need to prioritize different areas of billing compliance.
• Developing Custom–Tailored Policies, Procedures, and Protocols – After assessing their compliance needs, providers and other organizations should work with their compliance counsel to develop written policies, procedures, and protocols that are custom-tailored to their specific compliance obligations under all applicable federal laws and regulations.
• Providing Staff Training – Medical and billing personnel should be provided with clear guidelines for doing their part to maintain compliance. This includes employees ranging from physicians to billing administrators. In the event of a Medicare audit (or an investigation involving the HHS Office of Inspector General (OIG)), having proper documentation of training can be critical for mitigating exposure to civil monetary penalties (among other adverse consequences).
• Conducting Regular Audits – Even when organizations have robust compliance programs in place, they still need to self-audit Medicare Part A billing compliance. This helps ensure that they can remedy compliance failures as necessary, and it also creates additional documentation of their good-faith efforts to avoid improper program billings.
• Documenting Compliance Efforts on an Ongoing Basis – From keeping patient and billing records to documenting their internal audits, all Medicare-participating providers should prioritize documenting their compliance efforts on an ongoing basis. Even compliant organizations can face intensive Medicare audits; and, when facing these audits, having ready access to comprehensive compliance documentation is one of the keys to avoiding unwarranted liability.

FAQs: Billing Compliance Risks for Healthcare Providers

Speak with a Federal Healthcare Billing Compliance Lawyer at Oberheiden PC

If you would like to speak with one of our lawyers about developing or updating a Medicare Part A billing compliance program, we invite you to get in touch. We work with all types of healthcare providers and other Medicare-participating organizations to help them efficiently manage compliance. Call 888-680-1745 or contact us online to arrange a free initial consultation today.

Additional Resources

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