Compliance in Specialty Settings and Emerging Risk Areas

Compliance Looks Different Depending on Where You Work

A compliance rule that applies in a physician office may not apply the same way in a hospital outpatient department, and telehealth adds yet another layer of requirements. Understanding these differences is not optional—misapplying rules from one setting to another is one of the most common sources of billing errors and audit findings. This lesson builds your ability to recognize setting-specific risks, use the OIG Work Plan as a practical tool, and connect audit findings to real-world coding decisions.

Physician Office Settings

Physician offices (also called professional fee settings) bill under the professional fee schedule using CMS-1500 claims. Common compliance risks here include:

• Evaluation and Management (E/M) level selection: Overcoding E/M visits remains a persistent OIG and payer concern. Since CMS revised office E/M guidelines (effective 2021), medical decision making (MDM) and total time are the primary selecting factors. Coders must understand what documentation supports each level.
• Incident-to billing: Services billed incident-to a physician under the physician's NPI must meet specific requirements—the physician must be present in the suite, the plan of care must originate with the physician, and the service must be within the scope of the auxiliary staff member's licensure. Billing incident-to when those conditions are not met is a recognized high-risk area.
• Modifier misuse: Modifiers such as -25 (significant, separately identifiable E/M on the same day as a procedure) must be supported by documentation. Routine or unsupported use of -25 is an audit target.

Hospital Outpatient Settings

Hospital outpatient departments (HOPDs) bill on the UB-04 claim form under the Outpatient Prospective Payment System (OPPS). The compliance landscape differs significantly:

• Facility vs. professional fee distinction: HOPDs bill for facility resources (staff, equipment, supplies), not physician work. A physician rendering the service bills separately. Coders in HOPDs must not capture physician work components in the facility bill.
• Condition Code 44 and observation status: Correct status assignment (inpatient vs. outpatient observation) carries significant compliance weight. Improper status assignment affects patient cost-sharing and payer reimbursement.
• Comprehensive APC and packaging rules: Under OPPS, certain ancillary services are packaged into a primary procedure payment. Billing a packaged service separately is a frequent audit finding.
• Medical necessity for outpatient procedures: Local Coverage Determinations (LCDs) and National Coverage Determinations (NCDs) apply strictly. Procedures performed without meeting coverage criteria—and without proper ABN when required—create compliance exposure.

Telehealth and Remote Patient Monitoring (RPM)

Telehealth expanded rapidly, and the compliance requirements are still evolving. Key risk areas include:

• Eligible originating and distant sites: Historically, Medicare telehealth required the patient to be in a rural originating site. Temporary flexibilities expanded access during the public health emergency. Coders must verify which rules are currently in effect for each payer before coding a telehealth encounter.
• Place of service (POS) codes: Telehealth services require specific POS codes. Using the wrong POS code affects payment rates and may constitute a billing error. For example, using POS 02 (telehealth provided other than in patient's home) versus POS 10 (telehealth provided in patient's home) is not interchangeable.
• RPM coding: Remote patient monitoring uses specific CPT codes for device setup, patient education, and data collection/interpretation. Services must meet minimum time or data transmission thresholds. Billing RPM codes without meeting those thresholds is an audit risk.
• Consent documentation: Many payers—including Medicare—require documented patient consent for telehealth services. Missing consent is a claim integrity issue that can trigger recoupment.

The OIG Work Plan as a Compliance Tool

The Office of Inspector General (OIG) of the U.S. Department of Health and Human Services publishes an annual Work Plan that identifies areas it intends to audit or review. The Work Plan is publicly available at oig.hhs.gov and is updated throughout the year.

As a coder or billing specialist, the Work Plan is a free, authoritative signal of where regulators see billing risk. When the OIG announces it is reviewing a particular code set or service type, that is your cue to:

1. Pull your organization's claims for that service and review them against documentation.

2. Confirm that coding and billing policies reflect current coverage criteria.

3. Flag the area for internal audit if one has not been conducted recently.

Work Plan items typically describe what is being reviewed (e.g., a specific CPT code range, a diagnosis group, or a billing practice), why it is a risk (prior audits showing error rates, program integrity data), and which provider types are affected.

Safety and Scope of Practice Considerations

Compliance failures are not only financial—they can harm patients. Upcoding an E/M level may seem like a billing problem, but it can create a false medical record suggesting more complex care than was delivered, which downstream providers may rely on. Billing for services not rendered deprives patients of accurate health records and may delay appropriate care.

Coders must remain within their scope: they assign codes based on documentation. They do not change clinical documentation, pressure clinicians to alter records, or assign codes for services that are not supported in the record. When documentation is insufficient, the correct action is to query the provider through the established query process—never to assume or guess.

Putting It Together

No single compliance program fits every setting. A well-prepared coder understands the specific rules for the environment in which they work, monitors OIG and payer guidance actively, and applies that knowledge to every claim. The activities in this lesson give you practice doing exactly that.