The HHS OIG recently released an audit report in which they concluded that for a recent one-year period, Medicare improperly paid physicians approximately $15.2 million for sacroiliac joint (SI) injections (see: https://oig.hhs.gov/reports/all/2026/medicare-improperly-paid-physicians-an-estimated-152-million-for-sacroiliac-joint-injections/).  

SI injections can help some patients improve their spinal mobility as well as relieve pain. Medicare covers these injections under certain conditions but not others. That’s where confusion can create painful compliance risks. 

Most Recent Audit in Series Related to Spinal Pain Management Services 

This was the most recent audit in a series of audits related to spinal pain management services which the OIG has been performing over many recent years.  

In prior audits of similar spinal services, the OIG found, for example, that Medicare improperly paid physicians for facet-joint interventions for more than 50 percent of sampled services that didn’t comply with one or more of the Medicare requirements:  

• https://oig.hhs.gov/reports/all/2023/medicare-improperly-paid-physicians-an-estimated-30-million-for-spinal-facet-joint-interventions/ 
• https://oig.hhs.gov/documents/audit/9596/A-09-20-03003-Complete%20Report.pdf 
• https://oig.hhs.gov/documents/audit/9602/A-09-20-03010-Complete%20Report.pdf  

They also reported finding improper payments associated with epidural steroid injections: 

• https://oig.hhs.gov/reports/all/2023/medicare-improperly-paid-physicians-for-epidural-steroid-injection-sessions/ 

Audits Continue in Therapeutic Spinal Pain 

In addition, last year, they published audit findings that said Medicare could have saved an estimated $17.7 Million if CMS oversight had prevented at-risk payments for anesthesia administered during spinal pain management procedures: 

• https://oig.hhs.gov/reports/all/2025/medicare-could-have-saved-an-estimated-177-million-if-cmss-oversight-had-prevented-at-risk-payments-for-anesthesia-administered-during-spinal-pain-management-procedures/  

Consequently, it should come as no surprise to healthcare compliance professionals that the audits in the therapeutic spinal pain space continue with the recent report about SI joint injections. 

Background on Crucial SI Joints 

The SI joints connect the lower portion of the spine to the pelvis. 

They support upper-body weight and play an important role in walking and changes in posture or position, such as moving from standing to sitting. These joints become painful for various reasons, including sacroiliac joint dysfunction, which occurs when the joint moves too much or too little, often due to injury, pregnancy or osteoarthritis.  

To improve movement and relieve lower back pain, a physician may administer an SI joint injection. A diagnostic injection is first used to determine whether the SI joint is the source of the pain. Significant immediate pain relief following the injection strongly suggests that the SI joint is responsible.  

(Image from page 2 of the OIG report) 

Once the SI joint is confirmed as the pain source, a therapeutic injection may be administered, with pain relief potentially lasting up to six months. 

How SI Joint Injections Are Covered 

Medicare Part B covers SI joint injections when medically reasonable and necessary. Five of seven Medicare Administrative Contractors (MACs) have local coverage determinations (LCDs) outlining requirements for  

• Pain indications 
• Imaging and pain assessment 
• Coverage limits  
• Diagnostic and therapeutic injections 

These LCDs limit coverage to two diagnostic and four therapeutic injection sessions within a rolling 12-month period, whether performed unilaterally or bilaterally.  

Billing and Coding for SI Joint Injection Procedures 

Each MAC also issued billing and coding guidance stating that physicians must add the “KX” modifier to each claim line for diagnostic injections to distinguish them from therapeutic injections. (Appendix C of the OIG Audit report summarizes the MACs, the states they cover, and the specific LCD number and LCD Reference article pertinent to their audit.) 

CPT code 27096 is used for injections made directly into the sacroiliac joint, while CPT code 64451 is used for injections targeting the nerves that innervate the sacroiliac joint. 

OIG Selects 100 Random Samples out of 186,000+ Procedural Sessions 

For the audit report, the OIG selected a random sample of 100 SI joint procedural sessions from a population of 186,842 sessions paid for by five MACs in a one-year period. They requested physicians’ supporting documentation to determine if the claims met Medicare requirements including LCD and LCD Reference Articles.   

Of the 100 sampled sessions, 28 complied with Medicare requirements, and 75 complied with Medicare billing guidance. However, the remaining 72 sessions didn’t comply with Medicare requirements, and 25 didn’t comply with Medicare billing guidance.  

Seventy-two sampled sessions didn’t comply with one or more of the requirements. The OIG report summarizes the noncompliant sessions by the type of noncompliance observed: 

(The total exceeds 72 sessions because 41 sessions had more than one deficiency.) 

Estimated Improper Payments of $15.2 Million in Sample Universe 

OIG then extrapolated their findings across the entire population of 186,842 sessions and calculated overpayments to determine their estimated improper payment amount of $15.2 million for the universe of sessions sampled for the one-year period. 

OIG found that although CMS had systems to identify some billing errors, it didn’t provide enough additional oversight or education to help physicians understand and follow Medicare requirements. CMS relied on MACs to educate physicians, but this wasn’t sufficient.  

As a result, some physicians may not have fully understood the requirements and billing rules. Physicians with billing errors said that more frequent and consistent training would have helped them understand the rules and avoid future errors. 

Other Improper Payments Assumed, Potentially Pushing Total Higher 

As mentioned, the sample universe of SI joint procedural sessions was limited to the five of the seven MACs that had issued LCDs. The other two MACs that didn’t have LCDs paid physicians $12.3 million for sacroiliac joint injection sessions. That accounts for approximately 36 percent of total Medicare payments for sacroiliac joint injections nationwide.   

Since these sessions were excluded from the audit, OIG wrote that this set of payments to physicians may also include improper payments. If true, the estimated $15.2 million in improper payments could potentially be higher. 

Four Areas of Noncompliance in SI Joint Injection Procedures 

Below are four categories of noncompliance and indications of unmet requirements: 

1 – Indications of Pain Requirements Not Met 

• At least three positive findings with provocative maneuvers 
• Low back pain below the L5 vertebra without radiculopathy 
• Low back pain that persists despite a minimum of four weeks of conservative therapies 
• Clinical findings and imaging studies that do not suggest any other diagnosed or obvious cause of the lumbosacral pain such as tumor and fracture 
• Low back pain for at least three months 
• Moderate to severe low back pain primarily experienced over the anatomical location of the sacroiliac joints between the upper level of the iliac crests and the gluteal fold 

2 – Imaging and Pain Assessments Requirements Not Met 

• The sacroiliac joint primary pain level must be measured prior to the injection at the beginning of the session. 
• The post procedure pain level must be measured at the end of the session. 
• The injections must be performed under computed tomography (CT) or fluoroscopy image guidance with contrast unless the patient has a documented contrast allergy so that ultrasound guidance without contrast may be considered. 

3 – Diagnostic or Therapeutic Sacroiliac Joint Injections Requirements Not Met 

• A diagnostic injection must have provided a minimum of 75 percent relief of primary pain before a therapeutic injection is administered 
• A subsequent therapeutic injection is not reasonable and necessary when the prior therapeutic injection did not result in at least 50 percent consistent pain relief or functional improvement for at least three months 

4 – Limitation of Coverage Requirements Not Met 

• Administer other musculoskeletal injections in the lumbosacral spine during the same session as sacroiliac joint injections 
• Perform multiple injections (e.g., epidural steroid injections, facet-joint injections, and trigger point injections) during the same session as sacroiliac joint injections and during the period when the physician is evaluating whether the injection reduced pain (i.e., efficacy assessment period) 

The Audit Details Smart Compliance Professionals Look For 

Like most medical claims’ audits, the “devil is in the details”. To avoid problems, wise compliance professionals will: 

1. Monitor the most recent LCDs from their MAC 
2. Maintain a process to review the LCDs and implement processes to ensure compliance 
3. Perform records audits for both coding and medical necessity  

Some coders might have the requisite medical knowledge to audit for medical necessity. However, it usually requires a clinical background as well as an understanding of Medicare billing requirements such as LCDs. 

The regulatory compliance landscape around SI joint injections is dynamic and significant. It’s worth paying attention to those devilish details.  

CJ Wolf, MD, M.Ed. is a healthcare compliance professional with over 22 years of experience in healthcare economics, revenue cycle, coding, billing, and healthcare compliance. He has worked for Intermountain Healthcare, the University of Texas MD Anderson Cancer Center, the University of Texas System, an international medical device company and a healthcare compliance software start up. Currently, Dr. Wolf teaches and provides private healthcare compliance and coding consulting services as well as training.   

Here are other resources to check out next: 

How to Avoid False Claims Related to Medical Necessity 

This expert blog gives compliance readers actionable steps to avoid civil monetary penalties and False Claims Act scrutiny resulting from documented medical necessity failures. 

Physician Coding and Billing Errors Enforcement: Compliance 

Get more context on enforcement actions stemming from unbundling, modifier misuse, and improper billing during same-day procedures. 

Know the Compliance Risk for Certain Anesthesia Services 

Learn about another recent OIG audit targeting spinal injection procedures and associated anesthesia/sedation coverage limitations. 

Medical Necessity: A Guide for Healthcare Compliance Leaders 

The linked article specifically discusses how MAC LCDs define medical necessity (such as requiring four weeks of conservative therapy prior to approving spinal injections)

The post Don’t Let Pain Injections Cause Regulatory Compliance Pain  first appeared on YouCompli.

A compliance control can exist, be documented and even be automated, yet still fail to prevent or detect a problem. That distinction matters as healthcare organizations add more policies, system edits, review procedures and reporting tools. The purpose of regulatory compliance control is to mitigate risk across the different operations and workflows in healthcare delivery.  

The presence of a control may give a false sense of security.  

The presence of a control may demonstrate that an organization recognized a risk. It doesn’t necessarily prove that the risk is being managed consistently. 

A recent audit from the U.S. Department of Health and Human Services Office of Inspector General offers a practical example of where controls can go wrong. 

What the OIG Audit Found 

The audit reviewed certain Medicare Part B payments made by Wisconsin Physicians Service (WPS) Insurance Corporation, a Medicare administrative contractor, for outpatient services during 2022 and 2023. 

Of 801 selected claim lines, OIG found that: 

• 138 claim lines were incorrect, resulting in at least $140,182 in overpayments. 
• 31 additional claim lines totaling $76,640 didn’t have supporting documentation. 
• Providers attributed identified overpayments to clerical errors and issues with their billing systems. 
• WPS had system edits in place but edits and review of flagged payments didn’t consistently identify claim lines that were in error. 

OIG recommended recovering identified overpayments and locating additional medical record documentation. Other recommendations included enhancing existing system edits and review processes and improving provider education. WPS agreed with all five recommendations. 

Read the official HHS-OIG audit summary and access the full report. 

Why Established Compliance Controls Still Fail 

Even though the audit focused on a specific contractor and set of Medicare payments, its findings illustrate a broader operational issue for healthcare compliance leaders: 

Having a control isn’t the same as knowing the control works. 

Most healthcare organizations don’t lack policies, procedures or controls. In fact, it may seem like there’s an abundance of those to some people.  

The more common challenge is that those controls operate across different people, departments and systems, and workflow can break down. A billing edit may identify a claim, but someone still needs to review it. A policy may require supporting documentation, but someone must still locate that documentation when it’s requested. An error may be corrected, but the organization still needs to verify the correction occurred. 

Each handoff creates an opportunity for the process to break down. 

Four Reasons for Control Failure 

As discussed in From Manual to Scalable: How to Manage Healthcare Compliance Risk, regulatory and compliance work becomes its own source of risk when it depends on individual effort, institutional memory and disconnected systems.  

In this environment, controls commonly fail for four reasons. 

1. The Process Depends on Manual Perfection 

Many compliance processes still rely on someone remembering to complete a step, notice an exception or follow up with another department. 

Manual work isn’t inherently ineffective. Human judgment is still essential to compliance. The problem arises when the process relies on individual memory without a reliable structure around it. 

Consider how often an organization depends on someone to: 

• Recognize that an issue requires review 
• Send an email to the appropriate person 
• Remember to follow up 
• Save supporting documentation 
• Confirm that the issue was corrected 
• Preserve evidence of the completed response 

A capable employee may perform those steps correctly most of the time. But a mature compliance program shouldn’t depend on perfect execution every time. The odds are against that long term. 

Instead, every regulatory change process should make the required next step clear, assign responsibility and show when work remains incomplete. 

2. A System Flag Is Mistaken for a Completed Control 

There are many reasons a system may successfully flag a potential error while the broader control still fails: 

• The alert goes to the wrong person. 
• No deadline is attached to the review. 
• The reviewer lacks sufficient context. 
• The alert is dismissed without documenting why. 
• The issue is corrected but not verified. 
• No one evaluates whether similar errors may exist elsewhere. 

This is the difference between detection and resolution. 

Automated edits and alerts can strengthen a compliance process, but an alert is only the beginning. 

A system edit can detect a possible problem. It can’t by itself ensure someone in the organization:  

• Evaluates the issue  
• Decides what action is required  
• Completes that action  
• Preserves evidence of the response 

Look at the full process surrounding an automated control, not just whether the technology generates an alert. 

3. Documentation Exists but Can’t Be Retrieved 

Supporting documentation is a recurring issue in audits, investigations and internal reviews. Sometimes the underlying work was completed, but the organization can’t produce any evidence.  

The organization may believe the record exists without actually knowing who owns it or where it can be found. Documentation could be stored in an individual inbox, a shared drive, a clinical system, a billing platform or a department-specific folder.  

For compliance purposes, documentation that can’t be retrieved may provide little practical protection. 

What Helpful Documentation Should Look Like 

A defensible process should make it possible to determine: 

• What happened 
• Who reviewed the issue 
• What information was considered 
• What decision was made 
• Why that decision was reasonable 
• What corrective action was assigned 
• Whether the action was completed 
• Where the supporting evidence is stored 

The goal isn’t about creating documentation for its own sake. The goal is to preserve a clear, trustworthy account of how the organization responded. 

For a deeper look at this issue, read How Healthcare Compliance Teams Can Turn Documentation Into Defensible Proof. 

4. Ownership Ends at the First Handoff 

Compliance teams rarely perform every operational task required to address a risk. They may identify the issue and send it to Revenue Cycle, Coding, Clinical Operations, Privacy, Legal, Quality or another department. Those handoffs are necessary, but they don’t complete the compliance process. 

Someone must remain responsible for determining whether the requested work was completed and whether the result adequately addressed the original risk. 

Without that accountability, a process becomes a series of disconnected activities: 

1. Compliance identifies a concern. 
2. The issue is sent to another department. 
3. The department begins reviewing it. 
4. A correction may or may not occur. 
5. The outcome is never reported back. 
6. Compliance can’t confirm completion or produce evidence later. 

Activity occurred, but the organization can’t demonstrate resolution. That’s why clear ownership means defining responsibility for both the operational action and the final verification. 

Three Questions to Test Whether a Control Works 

Healthcare compliance leaders can use three practical questions to evaluate a control. 

1. Does the Control Reliably Detect Exceptions? 

Don’t just ask whether a policy, edit or review procedure exists. 

Every time, the compliance leader should ask: 

• What specific risk is the control designed to identify? 
• What information does it evaluate? 
• Are there circumstances it may miss? 
• How often is its effectiveness tested? 
• What happens when the control identifies a potential exception? 

A control should have a clearly defined purpose and recognized limitations. It’s another job for compliance.  

2. Can We Retrieve the Supporting Evidence? 

Select a completed compliance action and attempt to reconstruct it. 

Can your organization quickly show: 

• Original issue or requirement 
• Analysis that occurred 
• People involved 
• Decision and rationale 
• Actions assigned 
• Completion records 
• Final verification 

This is a useful test because it evaluates the process from the perspective of an auditor, regulator or new compliance leader who wasn’t involved in the original work. 

3. Who Owns Correction and Verification? 

The person completing the corrective action may not be the person responsible for verifying it. Both roles should be clear. 

For example, an operational department may correct a billing process, while Compliance verifies that the correction addresses the identified concern and that evidence has been preserved. 

Without defined ownership, issues can remain open even after everyone believes someone else completed the work. 

From Individual Controls to Regulatory Operationalization 

The broader challenge isn’t simply building more controls but connecting them to repeatable operational processes. 

Then, when an issue or regulatory requirement is identified, the organization should be ready to: 

1. Assess its relevance and potential impact. 
2. Determine which departments and processes are affected. 
3. Define the required operational response. 
4. Assign clear owners and deadlines. 
5. Communicate expectations to the people completing the work. 
6. Track implementation and escalation. 
7. Verify that the required action occurred. 
8. Preserve documentation of the organization’s response. 

YouCompli refers to this discipline as Regulatory Operationalization: turning regulatory change into assigned, completed, verified and defensible action. This isn’t a one-off fix, but a scalable solution that adapts to health system needs. 

Technology can support this process but shouldn’t replace human judgment. The strongest approach combines structured workflows and automation with knowledgeable human review. 

Organizations evaluating whether their current technology supports that full process can use the six capabilities outlined in What to Look for in Regulatory Change Management Software for Healthcare Compliance. 

Metrics That Show Whether Controls Are Working 

Executive leadership and the Board of Directors may already receive compliance reports showing how many reviews, audits or corrective actions occurred. 

Those activity metrics are useful, but don’t necessarily demonstrate control effectiveness. 

Compliance leaders should also consider measures such as: 

• Percentage of flagged exceptions reviewed by the deadline 
• Average time from detection to resolution 
• Number of overdue corrective actions 
• Percentage of completed actions with supporting evidence 
• Recurrence rate of previously identified issues 
• Number of controls tested for effectiveness 
• Percentage of corrective actions independently verified 
• Time required to retrieve audit-ready documentation 

These measures help move the conversation from “Do we have a control?” to “Can we demonstrate that the control works?” 

For additional guidance on choosing useful measures and communicating them effectively, read Beyond the Penalty: What Metrics Should Healthcare Compliance Officers Track?. 

Compliance reporting should also help leaders identify overdue work, understand ownership and confirm what was completed and verified. Learn more about healthcare compliance reporting and verification. 

The Bottom Line 

The lesson from the OIG audit isn’t that automated edits, manual reviews or provider education are ineffective. The lesson is that no individual control should be evaluated in isolation. 

A system audit needs a reliable review process. A review needs an owner. An owner needs a deadline. A completed action needs verification. The entire response needs documentation that the organization can retrieve when challenged. 

Healthcare compliance programs have matured, and expectations have increased with them. It’s no longer enough to show that a policy was written, an alert was generated, or an email was sent. 

Organizations increasingly need to prove that risks were identified, evaluated, assigned, addressed and verified. 

That’s the difference between having compliance controls and operating a defensible compliance process. 

Can Your Documentation Prove the Work? 

Take the Compliance Documentation Readiness Check to evaluate whether your current process can demonstrate ownership, action, evidence and verification. 

The assessment takes approximately three to four minutes and provides a personalized result with access to the Prove-It Compliance Playbook. 

Download our Latest Whitepaper

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The post When Regulatory Compliance Controls Exist but Still Fail  first appeared on YouCompli.

About the Medical Necessity Series 

This is the third in our series of articles on medical necessity. In the first, we described the compliance risks associated with submission of claims for medically unnecessary services.   

In the second, we highlighted a case where an organization of long-term care hospitals were alleged to have violated the Federal False Claims Act (FCA) for holding patients in the hospital longer than medically necessary to increase reimbursement from Medicare. 

In this next article, we spotlight another recent example of a healthcare provider entity agreeing to pay a six-figure sum to resolve allegations of submission of claims for medically unnecessary services¹.  This time, the providers consisted of three affiliated skilled nursing facilities (SNF) that were alleged to have submitted claims for medically unnecessary rehabilitation services.   

False Claims Act Metrics Make Significance Clear 

The Department of Justice has reported that False Claims Act settlements and judgments reached $6.8 billion in Fiscal Year 2025. Over $5.7 billion of that total was derived entirely from the healthcare sector. Most of these healthcare recoveries stem from whistleblower lawsuits targeting corporate billing schemes, upcoding, and medically unnecessary services. 

Case Involves SNF Reimbursement Dispute Over Therapy Services 

For the period in question, skilled nursing facilities (SNFs) were reimbursed for therapy services based on a patient’s resource utilization group (RUG). The RUG was determined by the amount of services the patient received, such as: 

•  Physical therapy 
• Occupational therapy  
• Speech pathology services 

In short, the more services provided, the higher the reimbursement.  However, as discussed in our two prior articles, if the services don’t meet medical necessity requirements, they should not have been performed or billed in the first place. 

Whistleblower Lawsuit Triggers Investigation 

As is frequently the case, these allegations were first brought forth through a qui tam, or whistleblower, lawsuit. The whistleblower, or relator, claimed the defendants implemented a five-pronged scheme to fraudulently bill for unnecessary “Ultra High Rehab,” (the most intensive therapy provided by SNFs) and to keep patients in Ultra High Rehab for longer than necessary. 

The five prongs of the alleged scheme were: 

1. Pressure to perform excessive, unnecessary services: The organization’s leadership exerted pressure on therapy staff to administer excessive Ultra High Rehab and to do so for longer than necessary.   

This pressure was exerted not only by administrators who oversaw SNF operations, but also by regional directors of operations who managed the facility administrators. Such pressure was also exerted by directors of rehab (DOR) who managed therapists at each facility, and regional managers who directly managed the DORs.  

In other words, management, from top to bottom, spoke to therapists and staff in one voice: increase Ultra High Rehab, regardless of patient need. 

2. Financial vs. medical reasons to provide care:  Instead of letting therapists determine the appropriate level of therapy needed based on their professional evaluation, leadership insisted that each patient’s level of therapy be at least in part determined by whether the patient qualified for lucrative Medicare Part A benefits. 

3. Care for functional patients: The organizations pressured therapists to continue providing therapy to patients who were fully functional and in no way required intensive therapy. A scheme called “Bridge to Success” was employed which mandated an additional week of Ultra High Rehab be tacked on even after patients were ready for discharge. 

4. Too sick for care: The organizations pressured therapists to provide therapy to patients who were too sick to benefit from therapy and even to patients who were actually harmed by it.  

Since therapy minutes were dictated by management and not assigned based on the professional opinion of evaluating therapists, patients ended up receiving more therapy than they could tolerate, including instances where therapy was forced on patients about to pass away. 

5. Maximizing minutes: The focus on maximizing therapy minutes to hit therapy goals also resulted in leadership encouraging an array of fraudulent billing practices. 

This included: 

• Billing non-therapeutic minutes as therapy  
• Allowing therapists to bill for therapy without actually providing it 
• Encouraging therapists to bill evaluation sessions as therapy. 

Widespread Occurrences Involve $14.6+ Billion in Alleged Intended Losses 

Federal enforcement actions emphasize the commonality of these practices. The 2025 National Health Care Fraud Takedown alone resulted in criminal charges against 324 defendants nationwide, involving over $14.6 billion in alleged intended losses tied to fraudulent billing and medical necessity abuses. 

The most compelling argument for compliance leaders is that medical necessity fraud carries dual liability: 

• Financial Risk: Organizations face mandatory treble damages (three times the government’s actual loss) plus steep statutory penalties for every individual false claim submitted. 
• Human Risk: Unlike administrative billing errors, medical necessity fraud directly compromises patient care. Overutilization exposes vulnerable patients to unnecessary, exhausting or potentially harmful procedures simply to satisfy corporate revenue targets. 

Three Takeaways from Medical Necessity Cases 

Much can be learned from the themes of these allegations, even if your organization isn’t an SNF or doesn’t provide therapy services. Medical necessity requirements are common across most healthcare organizations. 

Key lessons from this case include: 

1. Decisions about billing for medical care provided need to be based on clinical and regulatory requirements, especially coverage requirements from Medicare and Medicaid, for example.   Such requirements often include statutes about: 

• Medicare coverage 
• Medicare manuals 
• National Coverage Determinations  
• Regional Medicare Administrative Contractors’ Local Coverage Determinations (LCD)  

2. Regular, focused compliance coding and billing audits may identify aberrant practices. This is especially true for services whose corresponding medical documentation doesn’t support compliance with coding or billing rules.   
    
   For example, Medicare reimbursement rules state that routine, non-skilled services aren’t separately reimbursable. In this case, it was alleged that one therapy assistant was coached to include in therapy minutes the time it took him to arrive at a patient’s room starting with the moment he left the therapy department. 
    

3. Use data analytics to identify outliers. Most whistleblower cases alleging medically unnecessary services are brought by an individual with knowledge from inside the organization. Many times, the individual is a physician, nurse or other clinician with medical expertise.   
    
   This case was different. It was filed by a private analytics firm using publicly available data. Though rare, these cases do exist. If a private firm using public data could find the alleged aberrations, one would hope the organization’s own compliance professionals would be able to find similar aberrations if given the resources to look.  Additionally, the government is using data analytics to identify cases they want to pursue as well. 

Apply These Takeaways to Your Own Regulatory Compliance Program 

False Claims Act allegations alleging a lack of medical necessity can take many forms. The kind of service or type of provider may also vary, but these key themes appear in many cases. The astute compliance professional will learn from them and apply the principles to the operations and services provided at their own healthcare organization. 

The claims resolved by the settlement are allegations only, and there has been no determination of liability. 

The post Lessons from the Frontlines: A Case Study in Medical Necessity Enforcement  first appeared on YouCompli.

Description: Elevate your audit strategy. Access 7 top educational resources designed to help healthcare compliance leaders navigate complex commercial and federal reviews.  

Trying to get a better handle on audit readiness? Good move. To save you some time, we’ve curated this audit-related content specifically for healthcare compliance professionals. The overview compilation gives you a quick look at the useful advice in each resource, so you can dive right into where you need help the most.  

If you haven’t thought about audit readiness lately, it’s probably time to put some focus on it. However, we know compliance life moves fast, and you can’t always get to some of the important things proactively. 

Compliance leaders get exhausted by resource scarcity, manual tracking fatigue, and escalating payer audits. According to the Barnes & Thornburg Compliance Outlook Report, 56% of healthcare compliance and risk leaders anticipate even greater regulatory challenges ahead, with over half struggling to secure the resources needed to keep up.  

So yeah, a proactive audit strategy could be a good idea. 

Healthcare Compliance Audits: 7 Essential Resources for Leaders 

Given that, it’s not surprising that continuous readiness is becoming the new standard for healthcare compliance leaders when it comes to audits. 

This collection is about shifting the conversation from “surviving the next audit” to “building a defensible, tech-forward compliance data engine”. 

These resources will quickly get you headed down a good path, with their abundant advice and useful tips from compliance professionals for compliance professionals. Many of them come with their own downloadable tip sheets. 

Think of the collection as the start of your “audit preparedness playbook.” 

Resource 1 – With Compliance Audits, The Best Defense is a Good Offense  

Is your organization defensible against a compliance audit? Do you have a game plan in place to avoid penalties and other losses? 

Traditional point-in-time random sampling simply fails to catch systemic gaps that audits can reveal. 

How this resource helps: 

With this blog, learn how to prepare your compliance program for the win. Using sports training analogies, the authors present a better way to handle ongoing inspections and audits in healthcare systems. 

The fast-break transition offense the authors suggest is inspired by the 1990 UNLV Running Rebels basketball team. Get their unique advice on how to go offense following a regulatory compliance audit or inspection, so you’re well-prepared for the next one. 

It takes practice. By reinforcing these principles and working on conditioning and decision making, teams can create more scoring opportunities. Just as a prepared team can force the defense into difficult situations, a well-prepared compliance team can “force” the auditor into zero-findings and more quality inspections.   

Resource 2 – Audit Readiness? How about Audit Etiquette?  

When a regulator shows up, what’s the first thing your team scrambles to find? 

• Is it evidence of task completion?  
• Maybe a list of applicable regs or updated policies?  
• How about proof of communication to stakeholders? 

In addition to documentation, how your team behaves during an audit also affects the outcome. 

How this resource helps: 

Learn the unfiltered truth about compliance audits and “audit etiquette” — the proper behavior for responding to an audit. 

Get expert tips on: 

• What audit readiness means 
• The role of healthcare compliance auditors 
• What to do (and what not do) during an audit 
• Audit etiquette best practices 

Perception is reality. If you look like you know what you’re doing, respond promptly, and treat the auditors with respect, you can generally minimize any damage. With the advice in this blog, you won’t just look ready; you’ll be ready – and calm.  

Follow these practices and display confident compliance audit behavior. 

Resource 3 – Healthcare Audit? Stay Ready. Don’t Get Ready.  

Compliance audit in Quality? Many quality teams think they’re ready, until they aren’t.  

In healthcare quality departments, audit readiness is no different than in any other area. Follow a defined process, then optimize as necessary so it works for your organization and patients.  

It’s not hard, but people still panic because an auditor can shut them down. 

However, if you have a proactive process in place to minimize the damage, you don’t have to worry.  

How this resource helps: 

This resource shares the pre-audit steps you need for proactive compliance readiness in Quality. It’s jammed with advice from the first word to the last. 

• During the Compliance Audit 
• Post-Audit Follow-Up Practices 
• Be Proactive: Prepare for Your Next Compliance Audit  

Resource 4 – How to Use TPE Plans for Compliance Auditing and Monitoring  

When doing periodic risk assessments, compliance professionals often use the OIG Work Plan or DOJ enforcement actions to determine how to deploy time and resources on auditing and monitoring. 

Another helpful tool is the list of services that Medicare Administrative Contractors (MACs) include in their Target, Probe and Educate (TPE) plans.  According to CMS, the goal of TPE is to accelerate improvement and let MACs work with providers to correct specific errors. 

How this resource helps: 

As this expert-written piece explains, TPE information can be a good resource for compliance leaders when designing proactive audit plans.  

This blog looks at how TPE plans are applied to specific areas of non-compliance that MACs observe. Use them to create your own checklists for cleaner compliance audits and proactive monitoring.  

Resource 5 – Six key steps to reduce the impact of telehealth audits 

Did you know telehealth is almost as old as the telephone itself? 

In 1879, just three years after Bell patented the telephone, an article in The Lancet first described the telehealth concept and its use.  

And a law that’s even older than the telephone still triggers telehealth audits today.  

The 1863 False Claims Act was enacted to keep profiteering contractors from defrauding the Union army. Today, it can trigger serious problems for modern telehealth practitioners.  

How this resource helps: 

Today we know the best way to cope with audits is to avoid the need for them in the first place. This article shares six proactive steps to take to reduce the impact of telehealth audits.  

It includes advice on how to: 

• Know what you’re up against.  
• Inventory your waivers.  
• Check your records.  
• Audit your process.  
• Fix what’s broken.  
• Rebill and repay.  

Patient demand for telehealth isn’t going away. Neither are the costs of noncompliance with telehealth regulations.  

By proactively partnering with colleagues in relevant departments, your compliance team can lead the efforts to identify and fix issues before they become major problems. That way, you can provide the telehealth services patients want in compliance with what the regulations demand. 

Resource 6 – 5 Payer Audit Errors Every Hospital Must Avoid 

From large hospitals to solo practitioners, at some point most providers will experience a commercial payer audit from CMS, OCR or some other agency. Their scrutiny reveals errors and violations, which in turn trigger hefty penalties. In fact, commercial payer audits have jumped 2.2 times over a single year, increasing the total sum at risk for hospital systems by 30%.  

Even more challenging, payers are moving heavily toward pre-payment audits. These can hold up payments and squeeze monthly cash flow.  

External payer audits don’t have to be such a nightmare.  

How this resource helps: 

The key to surviving an external audit with the least pain is to avoid the five payer audit errors outlined in this blog. 

1. Late responses 
2. Wrong documentation 
3. Billing the wrong codes 
4. No self-audit 
5. No legal help 

By staying prepared and vigilant, your next payer audit experience can be more streamlined and less stressful. 

Resource 7 – Audit Expectations and Challenges 

When it comes to providing best-in-class healthcare, stress comes with the territory. Unrelenting demands drain resources across the organization, including some not directly involved with patient care.  

One demand that turns daily routines upside down, and compounds stress levels is an audit. A compliance audit can be conducted internally by hospital committees or externally, often by government-approved contractors. 

Internal Audit – Seeks to determine provider’s financial and operational controls, and that related policies and procedures meet compliance and risk management needs. 

External Audits – Several federal agencies including CMS, OIG, OCR and others are the primary drivers of audits of regulations and compliance costs across hospitals. Responding to multiple external audits increases administrative costs, and funds could be bound up in lengthy appeals. 

How this resource helps: 

Study this overview to familiarize yourself with the basic workings and typical costs associated with audits. For example, external audits are conservatively estimated at $100 per hour, but the manual drain goes deeper:. Standard program reviews require 300 to 346 hours of direct manual labor per plan, taking skilled leaders away from higher-level risk mitigation. 

The Tech-Driven Path to a Proactive Audit Strategy 

You have plenty of insightful and helpful resources to review here. But as you look through them, keep this reality check in mind: 40% of compliance teams still rely on spreadsheets and text documents to track internal reviews. 

The future belongs to compliance leaders who lean into automated tools, allowing their teams to complete risk assessments far faster than manual methods and catch errors before federal or commercial auditors flag them. 

If you’re ready to leave the spreadsheets behind, or just have questions about setting up your proactive audit framework, we’re always here to talk. 

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The post Master Healthcare Compliance Audits: Learn from 7 Expert Resources  first appeared on YouCompli.

Ensuring medical necessity for services or supplies isn’t just about getting paid. It’s a safeguard against unnecessary or duplicative services that increase the risk of patient harm or medical errors. That’s reason enough for this to be an important topic for compliance leaders. 

This is the first article in a series on medical necessity — an area that many compliance programs struggle with. In this piece, we explain the medical necessity compliance risk in general, while subsequent articles highlight specific examples of enforcement actions experienced by medical providers such as hospitals and health systems. 

Impact of Denial Rates and Medical Necessity on Payer Costs  

Data suggests that medical necessity is becoming a primary way for payers to manage costs, making it even more worthy of leadership attention. The “State of Claims 2025” Report found that 54% of providers agree claim denials are increasing faster than they can appeal. 

A data accuracy gap also contributes to the problem. Roughly 41% of healthcare organizations report at least 1 in 10 claims is denied, often due to “bad data” at intake or lack of clinical justification. 

All of this creates further justification for the need to better understand medical necessity from a compliance standpoint. 

Role of Clinician Review in Determining Medical Necessity 

Medical necessity isn’t an easy compliance risk to tackle, especially when OIG recommendations bump up against front-line reality. Sometimes, clinicians view medical necessity as their bailiwick.   

Of course, their expertise is the basis for medical decision making. Generally speaking, clinicians are making their decisions based on what they believe is medically necessary. They are the clinically trained professionals and should know when something is medically necessary or not, right?  

However, from a compliance standpoint, medical necessity often really means “covered” by a third-party payor. If something is considered “not medically necessary,” it may actually mean it does not meet payor coverage requirements. 

OIG on Clinical Review of Medical Necessity in Claims Audits 

In their General Compliance Program Guidance document (GCPG), the Department of Health and Human Services (HHS) Office of Inspector General (OIG) emphasized the importance of ensuring claims submitted to government payors are medically necessary. 

Specifically, they note:  

“Medicare requires, as a condition of payment, that items and services be medically reasonable and necessary. Therefore, entities should ensure that any claims reviews and audits include a review of the medical necessity of the item or service by an appropriately credentialed clinician. Entities that do not include clinical review of medical necessity in their claims audits may fail to identify important compliance concerns relating to medical necessity.” 

Considerations for Compliance Risks in NCD and LCD 

Other entities have also emphasized medical necessity as coverage criteria. For example, Medicare publishes National Coverage Determinations (NCDs) and Local Coverage Determinations (LCDs). These are, in essence, coverage criteria for a specific service.  

Though generally accepted medical guidelines or medical practice may suggest a certain treatment plan is appropriate, the LCD might not cover the service for a particular condition or diagnosis or might not allow the service at a particular cadence or frequency. 

Example: Meeting LCDs for Pain Injection Procedures 

LCDs addressing pain injection procedures are a good example of this. A Medicare LCD might state that before Medicare considers a spinal injection “medically necessary” (think “covered”), the patient needs to have failed four months of conservative therapy (e.g., lifestyle changes, physical therapy, etc.)   

Or the LCD might state a total of four injections in a twelve-month period is the maximum number of injections they will allow. Additionally, an LCD might require that a patient has a certain condition (represented by an ICD-10 or diagnosis code i.e., diagnosis code) before considering a service covered.   

There is potential compliance risk in all these areas if coverage criteria are not met and documented in the medical record or if codes are reported to ensure coverage, but the medical record does not support the diagnosis code reported. 

Overlap with Patient Safety 

Medical necessity can also overlap with patient safety issues. If a physician exaggerates the severity of a condition to make it look like the services should be covered, a patient could undergo a procedure that was not appropriate or medically necessary to perform in the first place.  

This raises patient safety issues for subjecting a patient to certain risks when the service does not appropriately meet clinical standards or indications for performance. 

How Medical Necessity Compliance Is Enforced 

The government utilizes various tools for enforcing medical necessity compliance.  These include the False Claims Act (FCA), typically used by the U.S. Department of Justice (DOJ), and the Civil Monetary Penalties Law (CMPL) utilized by the OIG. 

The DOJ can investigate allegations of medically unnecessary services when credible information is brought to its attention by whistleblowers (qui tam relators). A qui tam relator is a private individual or entity who files a lawsuit on behalf of the government under the FCA against companies or individuals committing fraud. Or the DOJ can investigate on their own, typically because of data analytics they proactively perform. 

How OIG Pursues Financial Penalties and Program Exclusion 

The OIG is authorized to pursue monetary penalties and exclusion through a variety of civil authorities, most notably the CMPL. Under the CMPL, OIG can seek assessments in lieu of damages, Civil Monetary Penalties (CMP), and exclusion from participation in federal health care programs.   

According to the OIG, one example of conduct that could lead to CMP liability is presenting a claim for a pattern of medical or other items or services that a person knows or should know are not medically necessary. 

Medical Necessity Risk Tied to Clinical Services 

There isn’t a one-size-fits-all risk profile when it comes to medical necessity. Each organization’s risk is going to be tied to the clinical services it offers or orders. Organizations and their compliance programs should undertake risk assessments tailored to their particular situation.  

Via the GCPG document, the OIG recommends that when conducting risk assessments, organizations should “ensure that medical necessity, patient safety, and other quality compliance issues are included in the risk universe.” 

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Coming Articles: Details of Recent Enforcement Actions 

In subsequent articles in this series, we’ll take a closer look at the details of recent enforcement actions involving allegations that submitted claims lacked medical necessity. This information will help compliance leaders stay on top of situations and reduce risks in their own organizations.  

Read Part Two Here

About the Author 

CJ Wolf, MD, M.Ed. is a healthcare compliance professional with over 27 years of experience in healthcare economics, revenue cycle, coding, billing, and healthcare compliance. He has worked for Intermountain Healthcare, the University of Texas MD Anderson Cancer Center, the University of Texas System, an international medical device company and a healthcare compliance software start up. Currently, Dr. Wolf teaches and provides private healthcare compliance and coding consulting services as well as training.   

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Qualified compliance professionals do the heavy lifting for you, simplifying regulatory change management  

The post Medical Necessity: A Guide for Healthcare Compliance Leaders  first appeared on YouCompli.

It amazes us how many healthcare facilities don’t always store records appropriately. Check that. People don’t store records properly.  

Just this week, I was in a colleague’s office. Literally, it looked like Staples puked up aisle 3. I asked her what everything was, because you couldn’t make heads or tails of any of it. She explained that it was patient records that she didn’t know what to do with.  

I asked her, “Well, what does the process say to do?”  

“Process?” she said. Nice girl, means well, greener than a pepper tree.  

After helping her re-organize everything, I was motivated to put together some ideas to help others in her situation. Here are some record retention best practices in the event you have hoarded up some claptrap and now have to figure out what to do with it.  

What Records Do You Have? Archival or Data? 

First step, take an assessment of everything you have. Samples? Materials? Records?  

Archival storage should be for all original records, including source data and metadata, which are generated, recorded, calculated or transcribed at the time of an activity. This data allows full and complete reconstruction and evaluation of the activity.  

Data storage may be written, printed electronically, scanned image, photographic, or other form for later reference. Raw data obtained from measurement, testing, processing, direct observation or computer, and instrument printouts should be represented exactly as captured at its source without transformation, aggregation or calculation.  

Responsible Parties and Retention Periods 

All personnel should be responsible for handling, submitting or returning records to the archive in the same conditions in which they were found.  

Keep in mind that different items are governed by different regulations, so you need to check retention periods. The retention period begins when all work with samples or records is complete. Specified retention periods supersede any other retention requirements unless explicitly noted. 

Factors Influencing Retention Period Requirements 

• State and federal laws: State laws are the primary source for retention periods, which can range from three to over ten years. Federal laws, like those from CMS for Medicare, may also have specific requirements.  
• Patient age: Records for minors often require longer retention periods, usually extending past the age of majority.  
• Type of record: Different types of records can have different retention requirements. For instance, some states require longer retention for certain records like mammography images.  
• Legal and regulatory changes: Laws and regulations can change, so it’s important to stay updated on current requirements. 

Scope of Work in Healthcare Records Retention Process 

Generally, quality or project management takes the lead on records retention. The scope of work involves: 

• Archiving, filing, retaining, organizing and retrieving records 
• Maintaining security and integrity of records in archives if stored on-site 
• Collecting and cataloging records, including: 
• Assigning archival numbers 
• Preparing archive labels, updates to archival forms 
• Making copies of any supporting electronic data  
• Handling off-site storage as applicable.  

On-Site and Off-Site Record Storage Locations 

For healthcare records, you have two storage choices: on-site or off-site.  

If you store records on-site, storage must be access-controlled, and all records must be stored appropriately to ensure integrity and preservation, minimize deterioration and facilitate timely retrieval. All original paper records should be stored in secure, fireproof filing cabinets or appropriate containers, like folders, binders, weather-proof envelopes, cases or boxes. 

If you decide to store records off-site, make sure to use a qualified contractor specializing in off-site medical records storage. Quality should be involved in sending records off-site. All records should be assigned a unique number or other appropriate identifiers which your site must maintain.  

Records should be sent off-site appropriately grouped by record type. This is important because at some point, you might need to retrieve them. And you generally don’t have much notice to retrieve something. It’s generally an immediate need or within 24-48 hours, so if you don’t know where the records are or how they are organized, you won’t be able to produce them as you need to. That’s a problem.  

General Guidelines to Reduce Risk in Records Retention 

Healthcare record retention is governed by federal and state laws, requiring that records be kept for a specific period for patient access, legal protection, and compliance.  

Your organization should operate under the basic requirements for retaining records unless otherwise specified. Use these general guidelines to ensure your processes are set up for retention compliance: 

• Without a specified retention period, a minimum period of 10 years should be used.  
• Once the defined retention period is reached, samples and records may continue to be maintained, returned, transferred to the appropriate owner, or destroyed.  
• Do not destroy anything without appropriate approval from the functional owner.  
• Record destruction must be appropriately documented to denote the end of the life cycle. 

What’s Your Next Step? 

When you have these processes and practices in place, records retention will be a lot more efficient and a lot less stressful.  

Want more ideas for optimizing compliance and quality? You’ll find guidance in these popular articles. 

• Four Ways to Integrate Compliance with Safety/Quality Efforts 
• Best Practices for Better Training in Healthcare Compliance
• Integrate Self-Awareness into Healthcare Compliance Programs: 18 Tips  

Andrea has taught first grade in Willoughby, Ohio for 27 years in the same classroom that she attended school as a child. She earned a Bachelor of Science in elementary education with a minor in language arts from John Carroll University and a Master’s Degree in the Art of Teaching and Education from Marygrove College. 

John builds and fixes quality departments, while currently thriving as the Administrator & Director of Quality, Risk Management and Compliance at River Vista, a behavioral hospital in Columbus, Ohio.

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The Q-Kids – John R Nocero and Andrea L Bordonaro – are experts at everything quality, regulatory, education training and compliance and love sharing their knowledge on YouCompli.

Follow them on LinkedIn – for more quality content or send them a message – they’d love to hear from you.

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The post Hoarders Need Borders: Quality’s Role in Healthcare Record Storage  first appeared on YouCompli.

In this blog, learn how to go on offense following a regulatory compliance audit or inspection, so you’re well-prepared for the next one. Using sports training analogies, the authors present a better way to handle ongoing inspections and audits in healthcare systems.  

If you play us in basketball, we’re going to run the fast-break transition offense at you, and we will tell you right now; you don’t want to play us two on two. We know our biggest strength – namely that conditioning kills. Savage speed plus unlimited endurance equals an unstoppable force.  

The fast-break transition offense we use is inspired by the 1990 UNLV Running Rebels basketball team. This high-tempo strategy aims to score before the defense can get set. It involves pushing the ball down the court immediately after gaining possession and creating scoring opportunities through numerical advantages and defensive mismatches.  

You can apply the same strategies when managing audits and inspections.  

What Drives Healthcare Audits and Inspections? 

Audits and inspections are regular occurrences in healthcare systems. A number of factors influence how often and what kind. 

• Internal vs. External: Healthcare organizations conduct their own internal audits monthly, quarterly or annually. 
• Regulatory Bodies: Government agencies conduct their own audits, with the number depending on things like budget and staff. 
• Risk and Regulation: Frequency may increase if issues are discovered or when major changes are made to regulations. 
• Organization Size: Larger organizations often have more complex auditing needs, potentially driving more frequent audits. 
• Staff Turnover: High turnover can trigger more frequent audits to ensure consistency. 

What’s Your Playbook for Regulatory Inspections and Audits? 

Most healthcare systems have good reason to believe that a regulatory inspection, sponsor audit or other scrutiny could appear at any time, announced or unannounced. It’s accepted that the standard technique for managing these visits is ongoing vigilance.  

At her presentation on “How to Be Your Own Internal Monitor: A Guide to Monitoring Your Own Studies” at the ACRP 2025 conference, Ann-Marie Jacobson, CCRP, Senior Research Affairs Specialist at Tufts University School of Dental Medicine, said “Because of the unknowns about inspections and audits of in-progress or completed clinical trials, it is important to make sure that all study materials are always kept accurate, current, and explanative of the study activities to date.”

“You always need to be asking yourself, if the Food and Drug Administration (FDA), sponsor, or IRB came in right now and selected a current or recently closed study for examination, would everything be ready?”  

She explained that at her institution, study coordinators “regularly conduct audits of regulatory binders, subject folders, case report forms (CRFs), payment logs, and enrollment/screening logs. These are coordinators who are separate from the clinical team, to ensure that fresh perspectives are always present.” 

We don’t disagree with her, but we wouldn’t call that a fresh approach. Rather, we think that ongoing vigilance should be the standard in healthcare compliance, like a basketball team needs the fundamentals of solid shooting, dribbling and passing.  

Changing Audit Landscape Requires a New Game Plan 

The current healthcare audit landscape is shifting and shifting quickly. Back in late 2024 and even earlier this year, federal and state auditors would arrive and investigate one complaint at a time. They’d come in specifically for one reason or to investigate a particular incident, talk with a couple of staff members, and then summarize their findings and leave.  

Now, we’re hearing differently. Just this week at one of our collegial facilities, an investigator came in to investigate about 10 complaints in various areas, from documentation, to patient care and the like.  

To diligently investigate complaints of this type and volume, the auditor or inspector is probably going to be there on-site for a week or more. They will gobble up valuable conference room space, staff time and basically throw your whole operation into a tizzy due to the heightened emotional state.  

What’s your game plan for audit readiness now? 

Fast Break Offense for Compliance Audit Readiness 

How do you combat this? Well, if you use the key principles of a fast break offense, you will be prepared and conditioned. We’ve adapted these three techniques to the compliance game, to make champions of your team. 

1 – Push the Pace 

In basketball, coaches encourage players to maintain a fast pace and recognize when to initiate the first trigger. In an audit, this means anticipating what the auditor is going to ask and getting ahead of it before they bring it up.  

Pre-audit prep meetings and ongoing reviews of your events make this work, but you can’t just do a pre-audit meeting when an inspection is scheduled. You need to regularly schedule pre-audit meetings, so you’re always prepared.  

I know most organizations don’t do this. But we do. Which is why we have covered things so thoroughly that we can go quickly and get the auditor what they need and then move on to the next question.  

2 – Strength in Numbers 

In sports, we recognize numerical advantages, such as 2-on-1’s, 3-on-2’s or 4-on-3’s and then capitalize on these circumstances through drive-and-kick sequences. Drive the ball to the basket and when the defense collapses on the person with the ball, you kick the ball out to an open teammate to hit a jump shot.  

Within audits, scoring means answering auditors’ questions with the best players you have. You create a numerical advantage by bringing in multiple people to meet with the auditor at the same time and kicking facts around like you would move the ball to score.  

3 – Continuously Practice Good Habits Across the Team 

Lastly, you need elite conditioning habits in sports and in compliance. To run the fast break effectively, you can’t get tired. Imagine unleashing an endless barrage of offense and staying so diligent to this effort that teams know it’s coming and still can’t stop it.  

The team with the most dialed-in offense is usually the most capable, but you need to have players who can react “lag-free” or win their first three steps to capitalize on numerical advantage. The only way to get good at this is to continually work on it.  

Quality and compliance preach continuous improvement, but how often do you do make the effort? How often do you stay late at work, just because? How often do you run more meetings or make everything tighter?  

Chances are zero times, but I will tell you right now that we do. So, if you get into an audit with me, by Day 4, I am still working with a full gas tank, but the auditor isn’t because they went home and “Netflixed“ while I slept. Get your whole team committed to elite habits, and you are unstoppable.  

Prepare Your Compliance Program for the Win 

By reinforcing these principles and working on conditioning and decision making, teams can create more scoring opportunities. And just as a prepared team can force the defense into difficult situations, a well-prepared compliance team can “force” the auditor into zero-findings and more quality inspections.  

Download a PDF Version of the Tip Sheet

Create Compliance Scoring Opportunities 

If you’re interested in more ideas for building a strong compliance program, read these resources next. A strong compliance culture is the foundation of a strong program. 

10 Tips for Building a Compliance Culture in Healthcare 

Earning recognition as a value creator and establishing a healthy culture can be challenging. Yet as these 10 tips show, you can successfully shape culture to help the larger organization better manage and control risk. 

Healthcare Compliance Culture Means Doing the Right Thing at All Levels 

A culture of compliance isn’t just a platitude. It really does exist. Those organizations with a strong culture of compliance and an effective compliance program are the ones with engaged clinical and operational leaders. 

A Culture of Compliance Through Proactive Decision-making 

A culture of compliance is critical to effective regulatory change management. Find three steps to help your leaders make decisions more proactively.   

Andrea has taught first grade in Willoughby, Ohio for 27 years in the same classroom that she attended school as a child. She earned a Bachelor of Science in elementary education with a minor in language arts from John Carroll University and a Master’s Degree in the Art of Teaching and Education from Marygrove College. 

John builds and fixes quality departments, while currently thriving as the Administrator & Director of Quality, Risk Management and Compliance at River Vista, a behavioral hospital in Columbus, Ohio.

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The Q-Kids – John R Nocero and Andrea L Bordonaro – are experts at everything quality, regulatory, education training and compliance and love sharing their knowledge on YouCompli.

Follow them on LinkedIn – for more quality content or send them a message – they’d love to hear from you.

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Sign-up for our Weekly Newsletter

Schedule a quick overview

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27 Ungated Resources for Compliance Leaders and Teams 

Compliance professionals sometimes feel undervalued in comparison to other functions in their organization. They think leaders and colleagues don’t really understand what they do.  

These resources will help. Packed with ideas, tips and recommendations, these pieces were written by professionals with many years of compliance experience. 

You can quickly skim for articles that relate to your needs and interests. Bookmark this page as a reference for future questions or projects.

Visit Now

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The post With Compliance Audits, The Best Defense is a Good Offense  first appeared on YouCompli.

A good healthcare compliance program is all about reducing risk, both in patient care and in financial reimbursement. This detailed blog by compliance expert, CJ Wolf, will bring you up to date on the compliance risks associated with certain anesthesia services.   

The OIG just published audit results and report (July 31, 2025) outlining the issues in this area. This article is a summary of that report, along with what it might mean for compliance professionals.  

The implications can be huge. For example, OIG concluded that Medicare paid $45.7 million for anesthesia services provided during the SPM procedure sessions that were at risk for noncompliance with Medicare requirements.  

What to Know About Anesthesia, Compliance and the Latest OIG Audit 

The U.S. Department of Health and Human Services Office of Inspector General (OIG) recently released a nationwide audit report highlighting potential improper payments for anesthesia services provided during select spinal injection procedures  

It is only under rare circumstances that Medicare Part B covers the cost of anesthesia during certain spinal pain management (SPM) procedures. In fact, a prior OIG audit found that 27% of billed anesthesia services during SPM procedures did not have supporting medical documentation that would justify the use of anesthesia.  Given these circumstances, the OIG decided to perform the more recent nationwide audit and publish its findings. 

Goal of OIG Audit Regarding Medicare Part B Payments 

The OIG’s goal in the audit was to identify Medicare Part B payments to physicians for anesthesia administered during selected SPM procedures that were at risk for noncompliance with Medicare requirements. 

The specific SPM procedures included in the audit were: 

• Facet-joint injections 
• Facet-joint denervation (aka radiofrequency ablation) 
• Epidural steroid injections 
• Sacroiliac joint injections 

Medicare Coverage Only in Rare Circumstances 

As mentioned, it is only in rare circumstances that Medicare covers the cost of certain anesthesia services provided during SPM procedures. The types of anesthesia services that could potentially be covered under these rare circumstances include: 

• Moderate sedation: Administration of a drug-induced depression of consciousness during which a patient responds purposefully to verbal commands, either alone or accompanied by light tactile stimulation. No interventions are required to maintain the enrollee’s airway, and spontaneous ventilation is adequate. 

• General anesthesia: Administration of a drug-induced loss of consciousness during which a patient is not arousable, even by painful stimulation. The ability to independently maintain breathing is often impaired. The patient often requires assistance in maintaining an open airway that allows for adequate airflow and proper oxygenation of the lungs. Positive pressure ventilation may be required because of depressed spontaneous ventilation or drug-induced depression of neuromuscular function. 

• Monitored anesthesia care: This is a specific anesthesia service for a diagnostic or therapeutic procedure. Indications for monitored anesthesia care include the need for deeper levels of analgesia (i.e., the inability to feel pain) and sedation than can be provided by moderate sedation. Monitored anesthesia care falls between moderate sedation and general anesthesia. 

MAC LCDs Published for Select SPM Procedures 

Medicare Part B claims are adjudicated and paid by Medicare Administrative Contractors (MAC).  MACs are charged with ensuring proper payment of claims.  They are to safeguard Medicare funds against improper medical coding and billing, fraud and abuse. One way they do this is by publishing local coverage determinations (LCDs) which outline when certain services are, or are not, covered. 

The MAC LCDs for the selected SPM procedures explain that the use of moderate sedation, general anesthesia, and monitored anesthesia care is usually unnecessary or rarely indicated for these procedures. However, individual consideration may be given in rare cases when documentation clearly established the need for such anesthesia. 

Audit to Confirm Compliance with Limited Coverage Rules 

The OIG wanted to confirm compliance with these limited coverage rules for anesthesia services billed along with the SPM procedures. To do so, they identified an audit period consisting of claims for SPM procedure dates of service between May 2, 2021, and August 31, 2023, during which Medicare paid for 3.9 million sessions of SPM procedures.   

For this audit period, physicians billed for anesthesia services nearly 18% of the time. The MACs paid $46.2 million for the anesthesia services or 99.5% of the time that anesthesia was billed during the same SPM procedure session. 

Then, the OIG identified and selected a nonstatistical sample of 28 sessions where both anesthesia and the selected SPM procedures were billed. To verify compliance, the OIG obtained the supporting medical documentation for these sessions and had an independent medical reviewer determine whether the anesthesia was medically necessary and met the rare circumstances when Medicare would cover the anesthesia service.  

Medical Records Fail to Document Necessity 

For 20 of the 28 sampled sessions, the medical reviewer determined the supporting medical records did not document a rare circumstance in which administering anesthesia was reasonable or necessary for the specific SPM procedure.   

One such example included a session where a physician administered moderate sedation to a patient during an epidural steroid injection session. The medical records provided by the physician stated that this type of anesthesia was administered because of the patient’s anxiety, which is not a medically necessary indication meeting coverage criteria according to the LCD. The medical records also did not have evidence of failed oral sedation, which could have necessitated moderate sedation. 

The OIG stated they could not provide an overall estimate of improper payments for the entire audit period because the sample they used was a nonstatistical sample. However, they concluded that Medicare paid $45.7 million for anesthesia services provided during the SPM procedure sessions that were at risk for noncompliance with Medicare requirements. 

OIG Recommendations Include Provider Education 

One of the more significant recommendations the OIG made for CMS and the MACs is to  

• Educate providers on the coverage criteria 
• Review claims for improper billing of anesthesia services 

For providers, this means your MAC may begin auditing such claims. 

Compliance Tip for Anesthesia Billing 

Compliance professionals should assess how often their organizations bill anesthesia services at the same time as the SPM procedures and review the medical records to determine if the sessions meet the rare circumstances found in the LCD requirements for coverage of both services. 

More Resources about Compliance Risks 

Continue learning about the complexities of Medicare reimbursement and compliance in these other piece by CJ Wolf. 

Compliance Risks Associated with Outlier Payments 

In some circumstances, payers like Medicare, for example, will reimburse additional amounts beyond the prospective payment rate. These additional payments are called “outlier payments.” Outlier payments provide additional reimbursement for cases of exceptionally costly treatments.   

How to Avoid Compliance Risk in Peripheral Vascular Reimbursement   

Peripheral vascular disease (PVD) reimbursement is fraught with potential compliance pitfalls. This expert-written blog addresses the pressing concern of compliance risks in PVD reimbursement. It provides insights into regulatory trends, recent investigations and best practices. It provides insights into regulatory trends, recent investigations and best practices. 

CJ Wolf, MD, M.Ed. is a healthcare compliance professional with over 22 years of experience in healthcare economics, revenue cycle, coding, billing, and healthcare compliance. He has worked for Intermountain Healthcare, the University of Texas MD Anderson Cancer Center, the University of Texas System, an international medical device company and a healthcare compliance software start up. Currently, Dr. Wolf teaches and provides private healthcare compliance and coding consulting services as well as training.   

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The post Know the Compliance Risk for Certain Anesthesia Services  first appeared on YouCompli.

In this blog, experts offer the real scoop on audit readiness in healthcare. Learn the unfiltered truth about compliance audits and what audit etiquette means. Get essential tips on preparing for audits, the role of healthcare compliance auditors, and what to do (and what not do) during an audit.  

What Does Audit Readiness Mean? 

Let’s say a regulator shows up at your door tomorrow. What’s the first thing your team scrambles to find? Is it evidence of task completion? Maybe a list of applicable regs? Updated policies? How about proof of communication to stakeholders? We saw a post this week asking for a current audit preparedness playbook because so many organizations think they’re ready, until they aren’t. 

Raw Truth about Compliance Audits 

Here’s the raw, unfiltered truth; no organization is ever ready for an external auditor or inspector. Ever. If you were, no one would panic when the FDA shows up at the door unannounced, or the state shows up in your lobby. “The state showed up the other day, and I knew why they were coming so I wasn’t unprepared.”  

The truth is you do your best, and you also expect the worst because they’re an auditor or inspector. Duh. It’s what they do.  

It’s like when you hear a funny rattle in your car. You take it to the mechanic. You know he’s gonna find SOMETHING. That’s his job. If you didn’t hear the rattle, you wouldn’t have taken it to him. You’re just hoping it is a minor repair rather than a total overhaul. Same with your audit, your auditor, and the rattle in your compliance practices. 

What to Know About the Healthcare Compliance Auditor 

Auditing is a formal, independent way to investigate regulatory compliance of a system or process within an organization. In accordance with regulations or industry best practices, an auditor assesses the adherence, adequacy and absence of certain processes.  

What a Healthcare Compliance Auditor Does 

• Identifies errors, omissions and irregularities.  
• Investigates the intent of possible wrongdoings. 
• Provides information regarding auditing procedures.  
• Submits reports to investigating authorities. 

Okay, A Compliance Audit Is Scheduled – What to Do? 

Once you know an audit is coming, use these five steps to prepare your organization. 

1. Make sure you can have as many of your team members available for the audit as possible, in case the auditor wants to schedule interviews with them.  
2. Provide a few date options for the auditor to choose from. A regulatory body like CAP, CLIA or FDA does not have to give warning of an audit and can arrive unannounced, but most audits are not unannounced. You have time to prep. Use it.  
3. Ask for an audit agenda as soon as you can. Review it.  
4. Alert the team that an audit will occur. This allows time to prepare any project-specific documents that may not be complete.  
5. About a week out from the audit, do a facility walkthrough to make sure there is nothing out of place. Do it two days out and then the day before. Yes, this much. You have people in your office. They move things.  

Once you have these steps under control, preparation becomes a case of do’s and don’ts. In other words, audit etiquette. 

What Is Audit Etiquette? Best Practices for Compliance Behavior 

Audit etiquette covers all the best practices required to facilitate smooth external audits. These vary slightly based on the health system’s existing compliance processes and experience facilitating them.  

In most cases though, following these techniques for what to do and what to avoid will drive positive, less stressful outcomes.  

What to Do in a Compliance Audit 

• Do listen to an auditor’s question and think before responding.  
• Do answer only the question that is asked. Stop talking.  
• Do ask for clarification if you don’t understand the question.  
• Do answer only those questions relative to your job.  
• Do be honest and pleasant. 
• Do treat the auditor with respect and courtesy at all times.  
• Do dress in business casual attire. 
• Do prepare to talk to the auditor and anticipate questions. 
• Do have quality obtain copies of taped conversations. 
• Do provide well-ordered, clear documents. 
• Do understand your policies and procedures. 
• Do keep computers locked when away. 
• Do close security-controlled doors. 
• Do keep paperwork organized and out of sight when possible. 
• Do escort the auditor at all times while on the premises. 

What Not to Do in a Compliance Audit 

Don’t guess. Say you don’t know or that you need to consult an SOP or defer to someone who is more suitable to answer the question. If you want to consult an SOP, describe the procedure in general terms with the auditor and then walk them through the details. Just saying “I have to consult my SOP” gives the impression that you aren’t trained. 

Here are other things NOT to do in an audit:  

• Don’t try to answer for someone else. 
• Don’t answer for another department or specialty. 
• Don’t offer additional information. Again, stop talking.  
• Don’t elaborate – answer only what is asked. 
• Don’t use hedge words (examples: I think, usually, normally). 
• Don’t guess when asked a question. 
• Don’t sign anything without legal approval.  
• Don’t argue with the auditor or inspection. Clarify anything the auditor misunderstood.  
• Don’t be rude or disrespectful to the auditor. 
• Don’t huddle. 
• Don’t panic. 
• Don’t lie. 

Practice Compliance Audit Etiquette with Confidence 

Regulatory bodies will give a report prior to leaving the audit. Ensure you engage with the necessary teams to give sufficient responses and have a plan for any noted observations. The observations and responses in a report will generally be the first items looked at in the next audit. Make sure you stay on top of these action plans and complete the items you have committed to. 

Also remember that auditors may be experts or novices based on the type and scope of the audit being performed. Do not assume you are the smartest person in the room when communicating with an auditor. Understand that the inherent authority of the auditor is dictated by the interested party they are advising. Their ability to influence a decision (that may have a significant impact on your organization) is the foundation of a desired outcome for you. That’s one reason why we recommend practicing good audit etiquette. 

More Resources about Compliance and Audit Readiness 

• Three Strategies to Align Compliance with Revenue Cycle 
• Audit Expectations and Challenges 
• Healthcare Audit? Stay Ready. Don’t Get Ready. 
• How to Use TPE Plans for Compliance Auditing and Monitoring 

John R. Nocero, Ph.D., and Andrea L. Bordonaro, MAT, blog on LinkedIn as “The Q-Kids,” discussing everything related to clinical research education, inspiration, and professional connection. 

Andrea has taught first grade in Willoughby, Ohio for 27 years in the same classroom that she attended school as a child. She earned a Bachelor of Science in elementary education with a minor in language arts from John Carroll University and a Master’s Degree in the Art of Teaching and Education from Marygrove College. 

John builds and fixes quality departments, while currently thriving as the Administrator & Director of Quality, Risk Management and Compliance at River Vista, a behavioral hospital in Columbus, Ohio.

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The Q-Kids – John R Nocero and Andrea L Bordonaro – are experts at everything quality, regulatory, education training and compliance and love sharing their knowledge on YouCompli.

Follow them on LinkedIn – for more quality content or send them a message – they’d love to hear from you.

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The post Audit Readiness? How about Audit Etiquette?  first appeared on YouCompli.