Regulatory and Compliance Requirements
Regulatory and Compliance Requirements tests the legal and payer framework an auditor must apply, including false claims, inducements, physician self-referral, privacy, overpayments, and program integrity.
Core rules
- The False Claims Act prohibits knowingly presenting or causing a false claim; “knowingly” includes deliberate ignorance and reckless disregard, not only specific intent.
- The Anti-Kickback Statute prohibits remuneration to induce referrals for federally payable items or services. Stark law is a strict-liability civil statute: a financial relationship must fit an exception, and intent is not the test.
- Medicare overpayments must be reported and returned within 60 days of identification, with a written explanation; do not wait for a payer demand. Quantify and document the calculation.
- NCDs and LCDs are coverage rules; LCDs are contractor-specific and can vary by jurisdiction. NCCI edits and payer claim edits apply at billing.
- HIPAA permits disclosures for treatment, payment, and operations, but the minimum-necessary standard and accounting-of-disclosures rules still apply. Compliance programs should include the OIG’s seven elements: standards, oversight, training, communication, monitoring, discipline, and response.
Worked example
An internal audit identifies that a practice billed modifier 25 on 18 claims without separate E/M documentation. The compliance officer quantifies the overpayment, stops the billing pattern, and submits a refund and explanation within 60 days of identifying the problem. The practice also documents root cause and provider education. Waiting for the MAC to send a demand letter is a violation risk.
Traps
- Treating an LCD as optional guidance rather than a coverage rule.
- Assuming a Stark violation requires bad intent.
- Refunding only after a payer audit, not after internal identification.
- Ignoring state false-claims, privacy, or licensure laws that are stricter.
- Screening providers against exclusion lists once instead of periodically.