Why Your Practice Needs a Medical Coding Compliance Program

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There are many benefits to working in the healthcare field. Not only do you get to ensure people in your community live their best and healthiest lives, but you get to be a support system during some of the most challenging times they will ever encounter.

However, that extra level of trust your patients put into your practice also comes with a large dose of liability. To help protect the business and your reputation, it is a good idea to have certain safeguards in place when it comes to billing. Here is what you need to know about having a medical coding compliance program.

Why Is It Important to Have a Coding Compliance Program?

There are numerous reasons why your medical practice should have this type of program in place.

For starters, there can easily be a high error rate in claims submitted by staff due to things like insufficient documentation, incorrect coding, and lack of medical necessity. This is just leaving money on the table for your practice due to errors that could easily be prevented.

In addition, the government is cracking down on issues related to fraud and abuse. In fact, many government agencies are taking certain steps to combat this problem. If you bill Medicare or Medicaid, this can mean a delay in payment or even losing the ability to submit claims. Examples include:

  • Increased number of prepayment reviewed
  • Increased post payment reviewed
  • Overpayment recovery

Having a coding compliance program in place can help protect your income and keep issues like these from happening. In fact, it is a good idea for every medical practice and not just major healthcare providers like hospitals or surgical centers.

What Should Be Included in a Coding Compliance Program?

Now that you know you need a medical coding compliance program in your healthcare clinic, it is important to discuss what you need to include. This list certainly is not comprehensive, as only you and your administrators know what is most beneficial to your practice. However, it is a good rule of thumb to include all or most of the following in your plan.

Written Policy and Procedures

You need to have some form of written policies and procedures for your medical billing department. This guide should, at a minimum, include things like internal coding practices and minimum documentation requirements for progress notes.

Also consider plans for technological issues. If computer software is used for coding, there should be a section on what to do when a coding error is detected. For example, your medical billing software might have instances where an ICD-10 code does not match the service description. What should your staff do in this instance?

By keeping everyone on the same page, you can ensure that mistakes are caught immediately before bigger issues arise.


One way to reduce and minimize coding errors is to have a written plan for employee education. The overall policy should include the type of education and/or certification expected for anyone in a coding position within your clinic or practice and these standards should be adhered to as close as possible.

There should also include a section that requires coders to complete continuing education units. And when you do host coding education in-service sessions, keep thorough records of all types of training (both internal and external) with notes on who was trained, what they were trained on, and the exact dates of the training.

Auditing to Monitor Results

Finally, your medical coding compliance program needs some form of auditing to monitor results. For example, you want to monitor coding accuracy by performing periodic audits of each coding employee’s work. You should also set an accuracy standard for the medical practice to ensure everyone is meeting that benchmark.
If this seems like it would be too tedious or your practice is small, you might consider hiring an external auditing company. These firms look at your files, let you know where there are errors, and provide you with written reports. Select a firm who can do a totally unbiased audit with no incentive to maximize reimbursement for errors caught.

Disciplinary Action

Now that you know that you need an audit component to your medical coding compliance program, it is also important to consider having a disciplinary action plan. Why? If you notice a coding employee is continually making errors or a bigger situation occurs, you need to know how you want to proceed and when it is time to make a staffing replacement.

Understand that human nature is to make small errors, but if the auditing program continually finds big issues, there needs to be a set action plan in place. Only you will know what works best for your clinic and staff, but examples include intervention, probationary periods, warnings, and even ultimately firing.

Likewise, you need to have a correctional action plan when employees make mistakes and need some form of disciplinary action. Decide how long coding staff should be held to whatever action you have decided on or how you will provide training to keep the issue from happening again.

Wrap Up: Why Your Healthcare Clinic Needs a Compliance Program

Medical coding compliance programs are important, but they are only as effective as your staff makes them. By putting everything into writing and following procedures exactly, you can help reduce errors, save money, and minimize the risk of payment delays or repayments from happening.

Jean Delva
Founder & CEO of Symbion Coding, Inc.
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