Coding and Compliance: Why Audits Belong at the Core of Every RCM Strategy
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In today’s healthcare landscape, coding and compliance aren’t just operational necessities; they are front-line defenses for protecting your organization’s revenue. Between shifting payer rules, evolving government oversight, and increasing scrutiny from the Office of Inspector General (OIG) and Centers for Medicare & Medicaid Services (CMS), revenue cycle leaders can’t afford to treat coding and compliance as “back office” functions. They are strategic, and they deserve constant attention.
Trending Issues You Should Be Watching
The OIG and CMS have made it clear where their priorities are heading, and revenue cycle leaders should take note. Some of the most common themes emerging include:
Medical necessity and documentation integrity: Claims tied to incomplete or inaccurate documentation remain a major red flag for auditors. OIG work plans repeatedly spotlight services billed without sufficient clinical support.
Upcoding and inappropriate coding patterns: High-level E/M services, telehealth visits, and certain surgical procedures continue to be under the microscope. Consistent outlier coding compared to peer groups almost guarantees review.
Telehealth and post-pandemic billing: CMS has extended many telehealth flexibilities, but the agency is also monitoring billing patterns closely for abuse or misuse. This has become a prime audit area.
Modifier misuse: Improper application of modifiers (such as 25, 59, or 91) frequently appears in enforcement actions. These small details can have outsized impacts on compliance and reimbursement risk.
Prior authorization and coverage rules: CMS continues to tighten expectations around services that require prior authorization. Failing to follow guidelines not only jeopardizes compliance but can lead directly to denials and clawbacks.
Why Audits Aren’t Optional
Revenue cycle teams are often stretched thin, with urgent priorities like keeping AR days low or reducing denials. But neglecting compliance audits is a costly mistake. Here’s why they must be built into your plan:
Prevention saves more than correction: Discovering issues during a self-audit is far less damaging than having the OIG, CMS, or a commercial payer identify them first. The financial and reputational fallout of an external audit can be devastating.
Revenue protection: Audits aren’t just about compliance, they protect cash flow. Identifying coding errors, documentation gaps, or misuse of modifiers prevents lost reimbursement and reduces the risk of future recoupments.
Continuous improvement: Audit results should feed back into training, education, and process refinement. This creates a culture of compliance and positions your team for long-term success.
Board-level confidence: Organizations that build regular audit cycles into their governance frameworks demonstrate accountability and risk mitigation, giving leadership and investors greater peace of mind.
The Bottom Line
Compliance isn’t a box you check, it’s a continuous discipline. As OIG and CMS sharpen their focus on medical necessity, telehealth, and coding integrity, revenue cycle leaders must respond with proactive auditing strategies. Protecting your revenue means catching issues before payers or regulators do.
At Claims Theory, we believe that coding and compliance are non-negotiable pillars of revenue cycle excellence. When built into your RCM strategy, audits don’t just prevent risk, they create resilience.
