Developing Coding Policies for Compliance

Every physician practice depends upon correct coding and billing for their financial success. Coding drives reimbursement. All of the resources available for coding information and guidance are meaningless without the practice manager translating it into provider-specific coding policies and compliance plan. As a practice manager, you need to develop a compliance plan and coding policies that reflect official coding guidelines and fills in the blanks with provider-specific interpretation of how the official guidelines should be applied by the coding/billing staff of the practice.

The implementation of a comprehensive compliance plan with coding policies will provide consistency, accuracy and reliability of all your practice coding and billing, assure sound and ethical coding practices, and provide back up if your practice is questioned by insurance companies or Medicare.

The guidelines should be developed and managed on an ongoing basis by the practice manager who, along with the physician should have the final say in finalizing the guidelines and ensuring they are updated on a regular basis. In addition to the practice manager, other individuals that should be involved in coding guideline development include both the coding staff and the medical staff. Input from the coding staff is particularly important in identifying areas where they may have questions and need to have clear-cut guidelines for reference when doing their jobs. Members of the medical staff should be identified as the individuals who will assist in clarifying clinical and documentation concerns. In addition they can serve as a resource in ensuring that all policies are clinically validated.

Policies may be organized by any logical format. Once you have determined the format, it should be applied consistently. The development of Coding Policies should follow these steps:

No organization should have a "canned" compliance plan, and no organization should have 'canned" coding policies. The following are some that are recommended you include:

The OIG sees coding and billing as the biggest compliance risks for health care providers. In the OIG's Compliance Program Guidance it is stated that "general compliance education is required for all provider employees, but additional focused training is recommended for individuals in higher risk areas, like coding and billing."

In addition to training on basic coding issues, every provider should use their coding policy manual as a basis for ongoing education and training of its coding staff. More importantly, the practice manager should keep records of the education sessions their staff attends and document the content of the meetings as well as who was in attendance. In addition, each coder should be required to take periodic quizzes on different sections of the policy manual. These records will serve as evidence that the coding staff understood and was familiar with the organization's coding manual.

Once you have your policies in place, you can then develop a comprehensive compliance plan for your office. - next issue look for "How to Develop a Practice Compliance Plan".

Marge McQuade, CMSCS, CMM is a certified medical manager and a certified multi-specialty coder with over 30 years experience in the medical field as an office manager and coder.
She is an active member of PAHCS and AAOC and is on the Advisory Board for several HCPro publications. Contact her at