Quality
Auditing, Corporate Compliance, Quality

The Cost of an Unchecked Policy

WHEN POLICY MEETS PRACTICE | A TWO-PART SERIES

How quality assurance and quality improvement audits keep policies alive and patients safe

Written by Robert Colon-Torres   

Every health system has policies. Far fewer can prove those policies are followed, or that they work. That gap is where preventable harm, financial penalties, and legal exposure live.

In nearly 25 years of healthcare compliance work, I have rarely investigated an adverse event where no policy existed. Far more often, the policy was there. It had been approved, posted, and acknowledged in an annual training. It simply was not what happened on the floor, and no one had checked.

This is the first of a two-part series on that gap between the policies health systems write and the care they actually deliver. My argument across both parts is straightforward: quality assurance (QA) and quality improvement (QI) audits are what turn a policy from a document into a practice, and compliance and CQI must operate as one team to make that happen. Part 1 examines what is at stake when the gap goes unchecked: for patients, for the organization's finances, and in front of regulators and courts. Part 2 explains why the gap opens and how to close it.

Harm is common, and much of it is preventable

The Institute of Medicine's To Err Is Human (1999) estimated that up to 98,000 hospitalized Americans die each year from preventable error.[1] Later estimates ranged far higher, including the widely cited 2016 claim that medical error is the third leading cause of death in the U.S.[2] Those higher figures have been sharply criticized on methodological grounds, and a 2020 meta-analysis put preventable inpatient deaths closer to 22,000 a year.[3][4] Compliance professionals should resist the temptation to lead with the most dramatic number; our credibility depends on precision.

But the debate over mortality obscures a point on which the evidence is consistent: harm itself is common. The HHS Office of Inspector General found that one in four hospitalized Medicare patients experienced harm, and that 43 percent of those events were preventable.[5] A 2023 New England Journal of Medicine study of eleven Massachusetts hospitals found adverse events in nearly one in four admissions, about a quarter of them preventable.[6] More than two decades after To Err Is Human, the problem has not been solved. In most of these cases, the evidence-based practice that would have prevented harm was already known.

Where policy and practice drift apart

Bar code medication administration (BCMA) shows how the drift happens. BCMA was designed to stop wrong-patient and wrong-dose errors, yet researchers documented fifteen distinct workarounds, including spare wristbands taped to carts and door frames, multiple patients' medications carried on one tray, and medications given first and scanned later.[7] None of this was sabotage. Each workaround was a rational response to workload, equipment placement, or a process that did not fit the real work.

Left alone, workarounds become what sociologist Diane Vaughan called the normalization of deviance: each shortcut that does not immediately cause harm makes the next one feel acceptable, until the unofficial procedure has replaced the official one.[8] By the time an adverse event exposes the gap, the deviation may have been routine for years. An audit is the only reliable way to see it sooner. A workaround is not just a staff behavior to correct; it is data showing exactly where the policy and the work have come apart.

Regulators now ask whether your program works

The compliance standard has shifted from “Do you have a policy?” to “Can you show that it works?” The HHS-OIG General Compliance Program Guidance (2023) treats auditing and monitoring as a core element of an effective program and expressly identifies quality and patient safety as compliance risks that boards should oversee.[9] The Department of Justice's Evaluation of Corporate Compliance Programs (updated 2024) asks prosecutors to judge not only whether a program is well designed, but whether it “works in practice,” including whether the organization tests its controls and learns from what it finds.[10]

The financial incentives point the same way. Since 2008, Medicare has declined to pay the added cost of certain hospital-acquired conditions, and the HAC Reduction Program reduces payments by one percent for the worst-performing quarter of hospitals.[11] Measurable medical errors were estimated to cost the U.S. economy $17.1 billion in a single year.[12] An unaudited policy is not a neutral gap. It is unpriced financial risk.

Your policies will be read in court

Courts in many states allow a health system's own policies to be admitted as evidence of the standard of care.[13] In Jutzi v. County of Los Angeles (1987), a county policy authorizing emergency physicians to treat orthopedic injuries helped establish that the hospital had met its standard of care.[14] In Heastie v. Roberts (2007), where a restrained patient was burned after the hospital's own contraband-search policy was not followed, the Illinois Supreme Court held that internal policies may be considered by the jury as evidence bearing on the standard of care, while a violation alone does not automatically establish negligence.[15]

The lesson for compliance is that a followed policy can protect you, and an unfollowed one can hurt you, sometimes more than having no policy at all. The only way to know which kind you have is to audit it.

A system problem, not a staff problem

When harm occurs, the instinct is to find the person who made the mistake. A just culture approach asks a better question: what in the system made the error likely?[16] Individuals remain accountable for reckless choices, but most errors and workarounds are system signals. Blaming the individual closes the file and leaves the conditions in place for the next event. QA and QI audits are how an organization turns systems thinking from a slogan into a practice.

About the Author

Robert Colon-Torres is a healthcare compliance executive with roughly 25 years of experience, most recently as a chief compliance officer for federally qualified health centers in California. He holds a degree in health law from Loyola University Chicago.


References

  1. Kohn LT, Corrigan JM, Donaldson MS, eds. To Err Is Human: Building a Safer Health System. Institute of Medicine; 2000.
  2. Makary MA, Daniel M. Medical error: the third leading cause of death in the US. BMJ. 2016;353:i2139.
  3. Shojania KG, Dixon-Woods M. Estimating deaths due to medical error: the ongoing controversy and why it matters. BMJ Qual Saf. 2017;26(5):423–428.
  4. Rodwin BA, et al. Rate of preventable mortality in hospitalized patients: a systematic review and meta-analysis. J Gen Intern Med. 2020;35(7):2099–2106.
  5. HHS Office of Inspector General. Adverse Events in Hospitals: A Quarter of Medicare Patients Experienced Harm in October 2018 (OEI-06-18-00400). 2022.
  6. Bates DW, et al. The safety of inpatient health care. N Engl J Med. 2023;388(2):142–153.
  7. Koppel R, et al. Workarounds to barcode medication administration systems. J Am Med Inform Assoc. 2008;15(4):408–423.
  8. Banja J. The normalization of deviance in healthcare delivery. Bus Horiz. 2010;53(2):139–148.
  9. HHS Office of Inspector General. General Compliance Program Guidance. November 2023.
  10. U.S. Department of Justice, Criminal Division. Evaluation of Corporate Compliance Programs. Updated September 2024.
  11. Centers for Medicare & Medicaid Services. Hospital-Acquired Condition Reduction Program.
  12. Van Den Bos J, et al. The $17.1 billion problem: the annual cost of measurable medical errors. Health Aff. 2011;30(4):596–603.
  13. Bal BS. An introduction to medical malpractice in the United States. Clin Orthop Relat Res. 2009;467(2):339–347.
  14. Jutzi v. County of Los Angeles, 196 Cal. App. 3d 637 (1987).
  15. Heastie v. Roberts, 226 Ill. 2d 515 (2007).
  16. Marx D. Patient Safety and the “Just Culture”: A Primer for Health Care Executives. Columbia University; 2001.

Copyright © 2026 American Institute of Healthcare Compliance All Rights Reserved 

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Burnout, Boundaries, and Compliance
Corporate Compliance, Leadership

Building Employee Engagement

Through Meaningful Healthcare Compliance Training

Written by Misty Kelly, OHCC, HPOC with contributions from Nancie Lee Cummins, CFE, CHA, CIFHA, OHCC, CHCM, CHCO CORCM, CRAS and Joy Rose, MSA, RHIA, CCS, CHA, CHPS   

This article was developed through collaboration with AIHC Education Volunteer Committee compliance professionals who shared practical experiences and lessons learned related to employee engagement and compliance education.

Several years ago, our organization deployed annual compliance training through a learning management system. Completion rates were acceptable; however, employees frequently waited until the deadline to complete their assignments, and retention of key concepts remained difficult to assess. The experience reinforced an important lesson: compliance training should not simply be focused on completion. It should focus on understanding and application. 

Training can satisfy a requirement without changing behavior. A completed module or passing quiz may document participation but does not necessarily demonstrate that an employee understands the expectation, recognizes when it applies, or can incorporate it into daily decision making. 

Begin With the “Why”

Organizations use a variety of methods to deliver compliance education, including annual LMS (learning management system) assignments, in-person presentations, newsletters, microlearning modules, department meetings, and one-on-one coaching. What resonates with one workforce member may not be as effective with another. Compliance professionals should remain flexible and willing to adjust their approach based on employee needs and organizational culture.

Nancie Cummins noted, “I have found individual training has helped the most. You can go through a format that meets Compliance plan criteria and have individuals interact to answer their specific needs. This way, you can address the compliance requirements while still allowing individuals to engage directly, ask questions, and receive guidance that is specific to their role and needs.”

While individualized training may not always be practical on a large scale, the underlying principle remains important: employees are more engaged when training is relevant to their role and allows opportunities for interaction, questions, and clarification. Even when one-on-one training is not feasible, larger sessions can incorporate opportunities for questions, discussion, and role-specific examples.

One Size Does Not Fit All

The challenge for compliance professionals is determining which methods will resonate most effectively with their workforce. There is no single correct approach. What works well in one organization may not work in another, and a method that was successful last year may be less effective today. Organizational cultures evolve, workforce demographics change, and training needs shift. Compliance professionals must remain attentive to those changes and be willing to adjust the format, timing, and level of interaction. 

The concept that compliance programs are not one-size-fits-all also applies to training platforms and methods. My overall goal with this article is to provide practical information to help guide new compliance professionals and offer new perspectives to seasoned professionals. 

Compliance education should not be limited to annual training. Whether education is delivered through a formal module, an ad hoc session, targeted remediation, or a Compliance & Ethics Week activity, employees should understand why the information matters. Whenever possible, connect the training to one or more of the following: 

  • Patient care and safety
  • The employee’s individual role
  • Organizational integrity
  • Operational effectiveness
  • Reputation and trust
  • Prevention of avoidable compliance problems
  • Other organizational-specific priorities

Employees are more likely to retain and apply information when they can see its relevance to their work. 

“Employees are frequently completing a checkbox without understanding the ‘why’ behind what they are doing.” – Joy Rose. Joy Rose’s observation reflects a common challenge. Employees are more likely to engage when expectations are connected to their daily responsibilities and the organization’s broader mission. Meaningful engagement requires a clear connection between the requirement, the employee’s role, and the consequence the requirement is intended to prevent. 

Choose Methods That Encourage Participation

LMS platforms can be effective tools for delivering and tracking education. However, even the most sophisticated platform will struggle to engage employees if content is repetitive, not role or industry-specific, or lacks practical relevance.

Compliance professionals should avoid designing education solely around their own preferred learning style. A format that feels clear and engaging to the person developing the training may not connect with every employee. Varying the delivery method can improve accessibility and help sustain attention, but variety should have a purpose. The selected method should support the learning objective, the complexity of the topic, and the needs of the intended audience. 

In recent years, I have focused on redesigning annual and targeted training to connect employees with organizational policies and reinforce applicable regulatory requirements. This required more than transferring existing content into a new format. We reconsidered how information was presented, where interaction could be added, and how employees could be directed back to the policies and procedures governing their work. Working with our information technology team, we used an AI-enabled platform to develop modules incorporating videos and interactive quizzes. Employee participation improved, and the experience reinforced an important point: strong content is essential, but presentation, relevance, and interaction influence whether employees remain engaged with that content. Technology did not replace the need for compliance oversight. It gave us another way to deliver information in a more engaging format.

For brief reinforcement

  • Microlearning and short refreshers
  • Short quizzes
  • Email, newsletter, or intranet reminders
  • Workflow posts explaining the purpose behind a task

For interaction and clarification

  • Live or department-specific sessions
  • One-on-one coaching when individualized support is needed
  • Department visits and informal question and answer sessions

For practical application 

  • Real-world scenarios
  • Role-specific instruction
  • Sample documents and guided exercises
  • Targeted education following audit or inspection findings

For engagement and visibility

  • Videos and visually engaging presentations
  • Gamification
  • Modest incentives, when appropriate

The method should never overshadow the message. Select the format based on what employees need to understand or do differently after the training.

Use Real-World Scenarios Responsibly

Employees in our organization have responded positively to real-world scenarios. In a post-training survey, 32% of respondents requested additional scenario-based education. Scenarios can help employees translate policy language into practical decisions and understand how a requirement applies in daily work. 

Compliance professionals must nevertheless use internal examples carefully. Remove or alter identifying details, avoid information that could permit re-identification, and focus on the scenario purpose or decision rather than the individuals involved. Not every internal matter is appropriate for broad education. When used responsibly, de-identified incidents, near-misses, and recurring questions can become valuable learning opportunities. 

Make Creativity Serve the Learning Objective

A well-chosen theme can also help create visibility and momentum around an annual campaign. Our organization has used travel, Olympic, superhero, and scavenger-hunt themes to refresh the employee experience. When feasible, simple décor, intranet content, photographs, and internal announcements can keep the campaign visible.

A theme, however, should support the learning objective rather than compete with it. Creative presentation may attract attention, but the content must remain relevant, accurate, accessible, and connected to employees’ responsibilities.

Leadership Sets the Tone

Training is less likely to influence daily behavior if leadership treats it as an annual assignment or does not reinforce expectations afterward. Leadership involvement should include visible support, sufficient employee time, operational follow-through, and reinforcement within departments. Leadership buy-in is often one of the most significant factors in influencing the success of a compliance program. 

In a recent post-training survey conducted within our organization, 36% of respondents identified leadership encouragement as a motivating factor in completing their assigned training. 

This year, our organization took a different approach by asking senior leaders to complete the training before it was deployed across the organization. As a result, leaders were able to provide feedback on the learner experience, answer employee questions based on firsthand knowledge, and reinforce the importance of the training from an informed perspective. Employees are more likely to engage when leaders demonstrate that compliance education is a priority rather than simply another assigned task.

Reinforce Learning Throughout the Year

Annual training alone cannot carry the entire compliance education program. There must be reinforcement and other trainings throughout the year. Employees may revert to prior habits when a workflow changes, particularly if the new process is not reinforced or if employees do not understand why the change occurred. Here are suggested reinforcement methods to consider:

  • Brief department touchpoints
  • Compliance newsletters or compliance content in the company newsletter
  • Periodic reminders via email or Teams messaging
  • Short quizzes
  • Leadership talking points
  • Workflow-specific coaching
  • New-hire reinforcement
  • Targeted education following audit or inspection findings

Measuring What Matters

Completion rates remain necessary for monitoring assigned education, but they answer only one question: Did the employee complete the training? They do not establish whether the employee understood the content, retained it, or applied it correctly. A more meaningful evaluation may include:

  • Knowledge checks that require application, not simple recall
  • Post-training surveys regarding relevance, clarity, and preferred formats
  • Targeted audits or observations of the affected process
  • Trends in repeat findings, recurring questions, and reported concerns
  • Discussions with department leaders about whether expectations are being followed

Follow-up education when results identify gaps

No single measure will provide a complete answer. Compliance professionals should consider multiple indicators and allow sufficient time for the expected behavior or process change to become observable. When results do not improve, the appropriate response may not be more training. The organization may need to examine the policy, workflow, available resources, competing priorities, or leadership reinforcement. 

Meaningful compliance training is not defined by completion certificates, attendance records, or annual deadlines. Those elements document activity, but effectiveness is demonstrated through understanding, application, and behavior. 

There is no universal formula for employee engagement. Each organization must consider its workforce, culture, risks, resources, and learning objectives. The most successful approach may combine formal training, practical scenarios, leadership reinforcement, ongoing communication, and opportunities for employees to ask questions and provide feedback. 

Our responsibility as compliance professionals is not simply to deliver information. It is to help employees recognize why the information matters and how it applies to the decisions they make every day. When employees understand the purpose behind an expectation and view Compliance as a trusted resource, training becomes more than a requirement. It becomes part of how the organization protects its patients, its workforce, and its integrity. 

About the Author

Misty Kelly, OHCC, HPOC, serves as Compliance & Privacy Officer for InnovaCare Health and has more than 23 years of experience in healthcare compliance, privacy, auditing, regulatory affairs, and risk management. She serves as a volunteer on the AIHC Education Committee. This article was written in collaboration with the following AIHC Education Committee Members: Nancie Lee Cummins, CFE, CHA, CIFHA, OHCC, CHCM, CHCO CORCM, CRAS and Joy Rose, MSA, RHIA, CCS, CHA, CHPS

Copyright © 2026 American Institute of Healthcare Compliance All Rights Reserved 

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Burnout, Boundaries, and Compliance
Leadership, Quality

Beyond Inspection Day

Building a Culture of Continuous Clinic Readiness 

Written by Misty Kelly, OHCC, HPOC with Corliss Collins, BSHIM, RHIT, CRCR, CCA; Nancie Lee Cummins, CFE, CHA, CIFHA, OHCC, CHCM, CHCO CORCM, CRAS; Joy Rose, MSA, RHIA, CCS, CHA, CHPS; and Lorianne Sainsbury-Wong, Esq. 

Checklists provide structure and consistency, but they should not become the inspection itself. The true value of an inspection lies in validation, observation, and determining whether a process is actually working as intended. “A clinic cannot inspect its way into quality/compliance. Quality/Compliance has to be built into daily operations. Audit readiness should be a daily practice, not event based.”

Inspection Readiness Is Not an Event

Many organizations begin preparing for an inspection only after learning that a regulator, accrediting body, payer, auditor, or other external reviewer is scheduled to visit. Policies are reviewed, binders are updated, logs are checked, and staff receive last-minute reminders. While preparation is important, true readiness cannot be built in the days or weeks leading up to an inspection.

A successful clinic inspection program is not measured solely by how well a site prepares for a scheduled visit. It is measured by how consistently compliant processes are maintained when no inspection is expected. Organizations that embed compliance into daily operations are better positioned to respond when outside reviewers arrive because readiness has become part of the culture rather than an event on the calendar.

Corliss Collins noted, “A clinic cannot inspect its way into quality/compliance. Quality/Compliance has to be built into daily operations. Audit readiness should be a daily practice, not event based.” - This statement reflects one of the most important lessons I have learned through years of conducting clinic inspections: an inspection can evaluate readiness, but it cannot create it. Readiness is created through the work that occurs every day between inspections.

Define What Readiness Means in Your Organization

Before developing or enhancing an inspection program, compliance professionals should clearly define its purpose and scope.

This may seem obvious, but organizations vary considerably in how compliance responsibilities are assigned. In some organizations, Compliance oversees a broad range of operational, regulatory, privacy, safety, and accreditation functions. In others, responsibilities such as infection control, medication management, employee safety, credentialing, and medical records may be owned by separate departments.

Lorianne Sainsbury-Wong emphasized the need to understand “what you own and what you don’t own.” She explained that an observation may overlap with more than one department, but the organization’s structure and assigned responsibilities should guide how that concern is evaluated, communicated, and followed through.

The inspection scope should answer several basic questions:

  • What requirements will the inspection evaluate?
  • Which areas are owned by Compliance?
  • Which findings require collaboration with another department?
  • Can the clinic readily produce the records, documentation, and evidence upon request?
  • Who is responsible for correcting each type of deficiency?
  • How will corrective actions be documented, escalated, and validated?
  • What evidence will demonstrate that the correction was sustained?

A clearly defined scope prevents gaps, reduces duplication, and helps ensure the right department is accountable for the right process. Just as important, clinics need to understand what readiness looks like before Compliance arrives. Nancie Cummins stated, “A process needs to be in place for individuals to be able to follow guidelines. Some individuals have a background in compliance, and it may be easier. I have found most need guidelines for structure to be able to come up with an effective plan.”

In my experience, inspection success rarely comes from surprise. It comes from providing clear expectations, practical tools, and sufficient opportunity for clinics to assess themselves before the inspection occurs. I often describe our program as an open-book test. The purpose is not to surprise the clinic; it is to determine whether expectations have been understood, implemented, and maintained.

A Clean Clinic Does Not Always Mean a Compliant Clinic

Visible readiness is important. Clean exam rooms, organized records, current postings, and completed logs all contribute to a safe and professional environment. However, appearances do not always tell the whole story.

Corliss Collins captured this distinction well, “A clinic may have clean exam rooms, completed logs, and organized binders, but still have weak processes.”

A clinic can appear inspection-ready while still having significant gaps beneath the surface. Staff may be completing a task without understanding its purpose. A log may be present but completed inconsistently. A policy may be accessible but not reflected in actual practice. A correction may have been made after the prior inspection but never incorporated into the daily workflow.

Corliss Collins also noted that many clinics are prepared to “look inspection-ready,” but not necessarily prepared to “prove process control.” She identified recurring concerns such as policy-to-practice gaps, training-to-competency gaps, repeat findings, document-control problems, weak recordkeeping, siloed departments, and limited leadership support.

That is why meaningful inspections need to evaluate more than what is visible on inspection day.

Move Beyond Documents and Evaluate Process Effectiveness

Document review is an important part of the inspection process. Policies, logs, licenses, certifications, training records, and required postings provide evidence that key compliance activities have occurred.

However, the existence of a document does not necessarily demonstrate that the underlying process is effective. Consider the difference:

Inspection Element

Question to Ask

Documentation

Does the required record exist?

Implementation

Is the process actually being followed?

Knowledge

Can employees explain their responsibilities?

Effectiveness

Is the process producing its intended result?

Sustainability

Is the process being maintained between inspections?

This distinction appears frequently in actual clinic inspections. For example, a clinic may perform its required monthly crash cart review, but replacement pull-tag numbers may not be consistently documented. In that situation, activity is occurring, but the documentation does not fully demonstrate control of the process.

Similarly, a clinic may complete routine safety checks but be unable to produce the related monitoring log. The missing document does not automatically mean the activity never happened, but it does mean the organization cannot verify that the process was performed consistently or reviewed appropriately.

The same issue arises when required employee records are incomplete. During recent inspections, clinics generally demonstrated strong operational knowledge, yet findings still occurred because required consents or declination forms were not available.

These are often correctable findings, but they also illustrate a broader compliance principle:
If an organization cannot demonstrate that a required activity occurred, the strength of the underlying practice becomes more difficult to defend.

Corliss Collins mentioned, “There is a big difference between a checklist and an audit. Always investigate, vet, verify, and validate everything based on evidence. Do not confuse activity with effectiveness.” 

Checklists provide structure and consistency, but they should not become the inspection itself. The true value of an inspection lies in validation, observation, and determining whether a process is actually working as intended.

Readiness Extends Beyond Formal Regulatory Surveys

When people hear the phrase “clinic inspection,” they often think first about a governmental, licensing, certification, or accreditation review. Actual clinic readiness is much broader. Payer visits, managed care audits, credentialing reviews, complaint investigations, privacy inquiries, and other external evaluations may all expose weaknesses in daily operations.

Lorianne Sainsbury-Wong emphasized that these visits should be approached with the same level of care given to formal regulatory or accreditation surveys. She also made an important observation, “What they see, what they hear, what they observe” matters from the moment a visitor enters the facility.

That observation extends beyond inspection preparation. It includes whether required postings are visible, whether conversations protect patient privacy, whether staff know how to respond to questions, whether restricted areas are appropriately secured, and whether daily operations reflect the organization’s written expectations.

External reviewers do not experience a clinic through its policies alone. They experience it through its people, environment, documentation, and processes.

  • A balanced inspection model may include:
  • Routine self-audits
  • Scheduled educational or readiness activities
  • Focused reviews of higher-risk processes
  • Periodic unannounced validation
  • Timely feedback and corrective-action support
  • Follow-up monitoring to confirm sustained improvement

The combination provides both preparation and a realistic assessment of day-to-day readiness.

When Findings Repeat, Look Deeper

An isolated mistake may require a straightforward correction. A recurring finding demands a different conversation. When the same type of finding continues to appear, the question should not be limited to:

  • Why did this employee make a mistake?
  • The organization should also ask
    • Why did this process fail again?

Joy Rose noted that many compliance challenges are not rooted in a lack of knowledge, but in a failure to consistently execute established processes. That resonated with me because it mirrors what we frequently encounter during clinic inspections. Most clinics understand the expectations. The greater challenge is maintaining those expectations consistently between inspections.

Repeat findings may indicate:

  • An unclear or impractical workflow
  • Inadequate training or competency validation
  • Insufficient resources
  • Competing operational priorities
  • Unclear accountability
  • A lack of leadership reinforcement
  • Poor document control
  • A corrective action that addressed the immediate finding but not its cause

Recent inspection trends within our organization demonstrate why this matters. Many clinics performed extremely well, with 17 achieving scores of 95% or higher and three achieving perfect scores. However, lower-scoring clinics frequently showed evidence that a meaningful self-audit had not been completed.

Many deficiencies could have been identified and corrected before the onsite review. Documentation remained the most common category of findings, and the issues generally reflected inconsistent execution rather than an absence of guidance or resources. These results reinforce two important points:

  • First, the standards are attainable.
  • Second, providing information does not guarantee that it will be consistently applied.

Corrective action should therefore extend beyond fixing the immediate item. It should determine why the requirement was missed, who owns the ongoing process, and what evidence will demonstrate that the correction has become part of normal operations. Corliss Collins advised that compliance professionals should “implement root cause thinking early.” 

Keep Inspections Educational, Not Punitive

Inspections should never feel like a “gotcha” exercise. Employees who perceive inspections as punitive may become defensive, provide limited responses, or avoid asking questions. None of those reactions improve compliance.

A supportive approach does not mean lowering standards or overlooking deficiencies. It means conducting the review professionally, explaining the reason behind the requirement, acknowledging areas of strong performance, and helping the clinic understand what must happen next. An educational inspection should include:

  • Clear expectations
  • Objective observations supported by evidence
  • Recognition of areas that are working well
  • Explanation of identified risks
  • Specific corrective-action requirements
  • Access to appropriate tools and resources
  • Follow-up to confirm completion and sustainability

The site should leave the inspection understanding what needs to improve, why it matters, and who is responsible for the next step. Our clinic administrator survey provides helpful support for this approach. Their feedback was overwhelmingly positive. Respondents consistently described the inspection process as professional, supportive, educational, and valuable in helping them better understand compliance expectations.

Survey results reinforce that accountability and partnership can coexist within the same inspection program. Those results matter because a rigorous inspection and a positive experience are not mutually exclusive. Compliance can hold clinics accountable while still treating the people involved with professionalism and respect.

There is value in both announced and unannounced inspection activities. Scheduled reviews give clinics time to gather records, coordinate with supporting departments, complete thoughtful self-audits, and address questions before the inspection. Unannounced or “pop-in” inspections more closely reflect the conditions a clinic may face if an outside agency arrives without advance notice.

Our program evolved from scheduled inspections to pop-in reviews after clinics had received preparation tools, checklists, guidance, and ongoing education. The purpose was not to create anxiety or catch employees off guard. It was to determine whether established expectations were maintained under normal operating conditions. At the same time, an inspection should account for the realities of the clinical environment. Staff members are managing patient care, urgent operational needs, and competing responsibilities.

Lorianne Sainsbury-Wong recommended: “Advance communication, planning, team collaboration efforts to maintain consistent messaging and reduce stress levels as many staff fear being put on the spot if questioned during an onsite inspection.”

The goal should be realistic validation without unnecessary intimidation. When arriving for a pop-in inspection, I remind staff that Compliance understands the process can feel stressful. We are not there to act as the police. We are there to help identify and correct vulnerabilities before an external regulator identifies them under far less forgiving circumstances.

Leadership and Operational Ownership Matter
The Compliance department may design the inspection process, perform the review, report deficiencies, and monitor corrective actions. It cannot single-handedly maintain readiness at every clinic. Readiness lives in daily operations.

Clinic and department leaders help determine whether self-audits are meaningful, whether required records are maintained, whether staff receive sufficient time and support, and whether corrective actions remain in place after the inspection closes. When expectations are repeatedly communicated but the same findings continue to appear, additional training may not be the only answer. The organization may need to examine whether leaders are reinforcing the requirements, reviewing completion, removing operational barriers, and holding the appropriate individuals accountable.

Lorianne Sainsbury-Wong emphasized the value of “Proactive communications, structured planning regulatory compliance oversight, and organizational alignment are essential components of effective inspection readiness. Leadership should focus on equipping team with clear guidance and consistent messaging so that inspections serve as an objective assessment of compliance, quality, and operational performance, not a disruptive event in daily work.”

That partnership is essential. Compliance provides oversight and an independent perspective. Operations own the daily processes. Supporting departments provide subject-matter expertise and maintain records within their areas. Leadership ensures identified risks receive the attention and resources necessary for sustainable correction. Continuous readiness depends on all of them.

Questions Every Compliance Professional Should Ask

Before concluding a clinic is inspection-ready, consider:

  • Are policies current, approved, and accessible?
  • Can staff explain the responsibilities?
  • Does documentation support actual practice?
  • Are self-audits identifying concerns before Compliance does?
  • Are corrective actions addressing root causes?
  • Would the clinic perform the same way tomorrow if an external inspector arrived unexpectedly?

The answers often reveal more about organizational readiness than any score or checklist alone.

Conclusion

Meaningful clinic inspections are not simply about finding deficiencies. They are about determining whether written expectations have become part of daily operations.

Organizations that embrace continuous readiness spend less time preparing for inspection day and more time maintaining effective processes. Employees understand their responsibilities, leaders reinforce expectations, and corrective actions become operational improvements rather than temporary fixes.

A strong inspection program provides structure, identifies risk, validates effectiveness, and creates opportunities for education. It also recognizes when a finding reflects more than an isolated mistake and requires a closer examination of leadership, workflow, resources, or accountability.

Ultimately, the best measure of readiness is not how a clinic performs while the inspector is standing in the building. It is how the clinic performs every day when no inspection is expected.

About the Author & Contributors

Misty Kelly, OHCC, HPOC, serves as Compliance & Privacy Officer for InnovaCare Health and has more than 23 years of experience in healthcare compliance, privacy, auditing, regulatory affairs, and risk management.

Misty serves as an AIHC Education Volunteer and project manager for this article. AIHC Education Volunteer contributors to help make this article happen are Corliss Collins, BSHIM, RHIT, CRCR, CCA; Nancie Lee Cummins, CFE, CHA, CIFHA, OHCC, CHCM, CHCO CORCM, CRAS; Joy Rose, MSA, RHIA, CCS, CHA, CHPS; and Lorianne Sainsbury-Wong, Esq.

Copyright © 2026 American Institute of Healthcare Compliance All Rights Reserved

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Healthcare Revenue Cycle Compliance
Billing/RCM

Common Compliance Risks in OB/GYN Medical Billing and How to Address Them

Written by Noah Smith for BillingFreedom

The article will help healthcare professionals identify common compliance risks that can arise in OB-GYN medical billing and understand practical approaches for addressing those risks through accurate documentation, coding, claim review, internal audits, and consistent billing workflows.

OB/GYN billing can get complicated quickly. During the same week, a practice may bill for preventive visits, ultrasounds, office procedures, prenatal care, surgery, delivery services, postpartum visits, and treatment for unrelated gynecologic conditions. Those services do not always follow the same documentation, coding, or payer rules. That leaves plenty of room for small mistakes to slip into the billing process.

Sometimes the problem is obvious. A claim is rejected because the subscriber number is wrong or a required field is missing. Other problems are harder to notice. A payer may process a claim even though the documentation is weak, a modifier has been used inconsistently, or staff are following an outdated billing process.

One paid claim does not necessarily tell a practice that everything behind the claim was handled correctly. A better way to think about compliance is to look at the entire path a claim takes:

  • Patient information has to be accurate.
  • Coverage needs to be checked.
  • The provider's note has to support the service.
  • Coding needs to match the record, and payer requirements have to be addressed before the claim goes out.

When one part of that chain breaks down repeatedly, the problem can spread across dozens of claims before anyone recognizes the pattern.

Where OB/GYN Billing Problems Usually Start

Many compliance issues begin before a coder ever looks at the chart. Consider a returning patient whose insurance changed since her last appointment. If the old plan is still listed in the system, the claim may be sent to the wrong payer. By the time the rejection comes back, staff may need to update the account, verify benefits again, rebill the service, and make sure a filing deadline has not been missed.

Authorization problems can develop in much the same way. A service may have been appropriate and clearly documented, yet the claim can still run into trouble if the payer required prior authorization and nobody confirmed it.

Then there is the medical record itself. A provider may remember exactly what was discussed or performed during a visit, but the billing team can only rely on what appears in the documentation. If the note does not clearly support the service being reported, defending the claim later becomes much more difficult.

The Centers for Medicare & Medicaid Services (CMS) provides guidance on electronic healthcare claims and the information needed for claims processing. The larger point for a practice is simple: compliance starts long before a denial or payer review arrives.

Documentation and Coding Need to Tell the Same Story

Documentation and coding are often discussed as separate tasks. In actual billing, they are difficult to separate. The code on the claim is supposed to represent what happened during the encounter. The medical record is what supports that representation.

Problems begin when the two tell different stories.

A common OB/GYN situation is a preventive visit in which the patient also brings up a new medical concern. Additional evaluation may take place during the same encounter. Whether separate reporting is appropriate depends on the services performed, the documentation, coding rules, and the payer's requirements. Similar questions come up with procedures, diagnostic testing, postoperative care, maternity services, and modifier use.

A diagnosis code may be valid in general but still fail to match what the provider actually documented. A procedure code may describe a service correctly but lack enough support in the chart. A modifier can also create problems when staff use it routinely instead of deciding whether the circumstances of that particular encounter justify it. These are not always dramatic errors. That is part of the problem.

When the same documentation habit or coding shortcut is repeated week after week, an isolated weakness can turn into a larger compliance concern.

Periodic chart-to-claim reviews can help uncover those patterns. Instead of asking only whether the claim was paid, the reviewer looks at whether the claim accurately reflects the record and whether the documentation is strong enough to support what was billed.

Some Claim Errors Have Nothing to Do with Complex Coding

Not every denied or rejected claim involves a difficult coding question. Sometimes the problem is a wrong date, an outdated insurance record, missing provider information, an incorrect subscriber ID, or a claim field that was left incomplete. These errors may sound minor, but they still consume staff time and slow down payment.

Electronic claims generally pass through automated edits during processing. Certain missing or inconsistent details can cause the claim to stop before it gets very far.

A short review before submission can catch many of those problems. Staff may want to verify:

  1. Patient and subscriber information.
  2. Current insurance coverage and coordination of benefits.
  3. Provider and practice identifiers.
  4. Diagnosis codes, procedure codes, and modifiers.
  5. Documentation supporting the billed service.
  6. Required authorization or referral information.
  7. Payer-specific claim requirements and missing fields.

The review does not have to turn into a lengthy approval process for every claim. What matters is that the practice has a reliable way to catch repeatable errors before the payer does.

Eligibility Deserves More Attention in OB/GYN Billing

Insurance information can change during the course of care, and OB/GYN practices are especially likely to encounter that issue because many patients receive services over an extended period.

Pregnancy is an obvious example. A patient may have one insurance plan early in the pregnancy and another later. Employment can change. A spouse's coverage can change. Coordination of benefits may need to be updated. Authorization rules may also be different under the new plan. If staff rely on an eligibility check performed months earlier, the billing team may not find out about the change until a claim is denied.

Eligibility problems can affect more than reimbursement. They may also result in the wrong amount being assigned to the patient or create confusion about who is financially responsible for the service.

Checking coverage at appropriate points throughout treatment gives staff a chance to address those issues before the claim has already gone through the billing cycle. It also makes financial conversations with patients more accurate.

A Denial May Be Pointing to a Workflow Problem

Correcting a denied claim is necessary. Correcting the same type of denial twenty times should raise a different question - Why does it keep happening?

Suppose claims for a particular procedure regularly come back because information is missing. Billing staff can add the information and resubmit each claim, but that does not explain why the original claims were incomplete.

Maybe the registration team is not collecting something the payer requires. Perhaps the authorization information exists but is not being transferred correctly. It could also be that staff misunderstood a payer policy. The denial itself is only the visible part of the problem.

This is why useful denial management goes beyond counting how many claims were denied. Practices can look at which reasons occur most often, which payers are involved, whether one service keeps appearing, and where in the workflow the original error began.

That kind of review can reveal patterns that would otherwise remain hidden. The CMS Medical Review and Education resources also discuss claims analysis and medical record review in the context of identifying improper billing and documentation issues. For an OB/GYN practice, denial data can serve as a practical warning system. It shows where the revenue cycle is struggling, not just where payment was delayed.

Internal Audits Can Be Small and Still Be Useful

An internal audit does not have to involve hundreds of charts. A practice can learn a great deal from a carefully chosen sample.

Maybe one modifier has been causing questions. Perhaps a particular payer has denied an unusually high number of claims. There may be concerns about preventive visits, maternity billing, surgery, medical necessity documentation, or another service that carries more risk. Those claims can be reviewed against the medical record.

The reviewer may find that everything was handled appropriately. If not, the next step is to determine whether the problem was isolated or whether it reflects a larger habit. That distinction matters. One coding mistake made on a single claim may require a simple correction. Finding the same mistake across several providers or multiple dates of service suggests that the practice may need education, a workflow change, or closer monitoring. The audit should not end when the error is identified.

If a change is made, the practice needs some way to determine whether it worked. Reviewing another sample later can show whether the same problem is still appearing. Without follow-up, the practice has documented a problem but has not necessarily solved it.

Compliance Works Better When It Is Part of Routine Operations

A compliance process does not need to be complicated to be useful. In many practices, consistency matters more than creating a large set of policies that nobody uses. Staff should know how registration is handled, when eligibility is checked, how authorization information is recorded, how claims are reviewed, what happens when a denial arrives, and who is responsible for following up on recurring problems.

Those processes should not exist only in one employee's memory. Training matters for the same reason. Payer policies change. Coding guidance changes. Internal workflows change. New employees arrive, and experienced employees sometimes continue using a process that made sense under an older rule.

Regular education gives the practice a chance to catch those gaps.

Billing data can also help determine where training is needed. If eligibility denials suddenly increase, the first response should not necessarily be a general coding seminar. The practice may need to look at registration and verification instead. If several claims involving the same modifier are being questioned, a focused review of those encounters is probably more useful than retraining the entire staff on every coding topic. Compliance becomes easier to manage when the response matches the actual problem.

Documentation Reviews Should Include the Claim

A chart can look complete on its own while the corresponding claim still contains a problem.

The opposite is also possible. A claim may appear technically correct until someone compares it with the medical record.

Looking at both together usually provides a clearer picture. This is particularly important for services where the circumstances of the encounter affect billing. Preventive care, problem-oriented visits, procedures, maternity care, and postoperative services can all raise questions that cannot be answered by looking at a code alone.

The reviewer needs to understand what actually happened during the visit, what the provider documented, and how that information was translated into the claim.

Preparing for Billing Changes Before They Reach the Claims Department

One of the easiest ways for a billing problem to spread is for a rule to change while the practice keeps following the old process. Changes may affect coding, documentation, payer policies, reimbursement, or the way certain services are reported.

The first sign should not have to be a wave of denials.

When a significant change is announced, the practice can identify which services will be affected and who needs to know about it. Providers may need different documentation. Billing staff may need revised procedures. Software settings or claim edits may also need to be updated. Testing the new process early is usually easier than correcting a backlog later. This becomes especially important when changes affect maternity services because the care and billing may span several months.

The Bigger Compliance Question

A claim can be paid and still come from a weak process. That is why payment should not be the only measure of whether an OB/GYN billing operation is working well. A better question is whether the practice could explain and support the claim if someone reviewed it later.

  • Was the patient's coverage checked?
  • Does the chart support the service?
  • Does the code match what was documented?
  • Were payer requirements addressed?
  • If a similar problem appeared last month, was anything changed afterward?

Those questions bring compliance into the normal revenue-cycle process instead of treating it as something that matters only during an audit.

Most billing problems do not begin as major compliance failures. They usually start much smaller: an insurance detail that was not updated, documentation that was a little too vague, a modifier applied out of habit, or a denial that was corrected without asking why it happened.

The risk grows when the same issue becomes routine.

Finding those patterns early is what gives a practice the best chance to correct them before they affect more claims, more patients, or more revenue.

About the Author Noah Smith

This article is written by Noah Smith on behalf of BillingFreedom. Noah is a medical biller, SEO and Content Outreach Specialist.

Additional Resources

Copyright © 2026 American Institute of Healthcare Compliance All Rights Reserved

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Healthcare Revenue Cycle Compliance
Billing/RCM

Mitigating Compliance Risks in Genetic Testing Billing and Medical Necessity Claims

Written by: Ricky Bell 

Having spent a decade advising clinical laboratories and health systems on revenue cycle management, I can tell you that molecular diagnostics remains one of the most volatile operational areas in healthcare. Federal spending on genetic testing under Medicare Part B now sits above $3.6 billion every year. That rapid financial growth brought aggressive oversight from the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) and the Department of Justice.

In the complex arena of medical billing, molecular diagnostic testing sits right in the crosshairs of federal auditors. Regulators no longer rely on random sampling. Instead, they deploy advanced data analytics to flag billing anomalies instantly. For compliance officers and practice managers, ensuring every claim meets strict coverage standards isn't just a recommendation—it is a survival strategy that lab executives cannot afford to sleep on. Rules change overnight. When billing protocols lack internal controls, financial penalties and False Claims Act liability follow quickly behind.


Where Labs Usually Get Burned

When reviewing Federal enforcement actions, one may find specific aspects of operations that lead to regulatory setbacks, including clawbacks and fines. For example, OIG has on multiple occasions published fraud alerts with the primary goal of targeting genetic testing practices and has pointed out that claims that result in financial penalties most often stem from major failure of the system's processes rather than from honest error.

Common High-Risk Testing Behaviors:

  • High-Risk Testing Behaviors.
  • Billing unbundled molecular CPT codes.
  • Bill a panel without a chart proof.
  • No signature by the doctor on the order.

Use of non-compliant lead-generation practices that may violate healthcare marketing regulations. Incorrect use of unlisted codes that relate to the genome.

Examine billing of multi-gene panels for cancer. Legal consequences come immediately when multi-gene hereditary cancer or pharmacogenomic panels are billed without showing the medical necessity of each individual gene target. Paying entities do not generally accept that a broadly screening panel is a medical necessity simply because a patient has a family history of disease. In addition, laboratory-marketing relationship set-ups frequently breach the Eliminating Kickbacks in Recovery Act (EKRA) and the Anti-Kickback Statute. When labs pay for marketing services in proportion to volume or claim value, they open themselves up to the possibility of being investigated by the Department of Justice, a common compliance issue that many lab managers face.

Navigating Medical Necessity and Coverage Controls

Defining medical necessity in genetics testing is really about finding a middle ground between clinical utility and coverage criteria determined by payers. An example is when a physician thinks a 50-gene panel is the ideal choice for giving the right diagnosis. Still, if the local coverage policy (LCD) lists just five genes as the only ones that are covered and the patient's condition is consistent with only these genes, then the doctor will be referring to the patient for the other testing that the insurance is not covering.

Maintaining billing compliance, organizations must master the requirements set by the Molecular Diagnostic Services (MolDX) program and commercial utilization management policies. Commercial payers and state Medicaid programs frequently diverge on prior authorization rules, creating administrative friction for billing staff. Truth is, what works for Medicare might fail completely with a commercial plan.

Key Operational Checks for Coverage:

  • Review local coverage rules monthly.
  • Get prior approval before testing.
  • Document clinical rationale in charts.
  • Verify specific CPT code coverage.
  • Check doctor order signatures daily.

A pre-test verification procedure is a compulsory setup. If a lab gets referrals from community physicians outside, it will be wrong to assume that the requesting provider already wrote medical necessity notes in their EMR. The lab on its own has to verify that clinical records back up the selected test panel before carrying out the test and presenting the charge. Not checking the chart papers exposes the lab to risks during an after-payment review of billing practices. So, you don't ever want to end up having that as your big error.

How to Build an Audit Framework That Works

To prevent improper payments, progressive health systems are moving away from passive retro-audits. Implementing an active Genetic Testing Stewardship Program (GTSP) provides a proven operational blueprint. For example, Nemours Children’s Health successfully curtailed unnecessary genetic testing orders by placing certified genetic counselors directly into the ordering workflow and embedding hard-stops in their Electronic Health Record (EHR) systems.

A solid internal audit framework evaluates claims both before submission and after payment. Health systems must establish routine internal controls that evaluate coding accuracy, physician intent, and documentation completeness.

Essential Audit Program Controls:

  • Add decision support in EHR.
  • Audit high-risk codes monthly.
  • Use genetic counselors as gatekeepers.
  • Track payer denial codes weekly.
  • Check fair market value rates.

Concurrently, compliance teams should conduct random quarterly audits on claims utilizing unlisted CPT® codes (such as CPT® 81479). Unlisted codes attract automatic payer scrutiny. If your team uses unlisted codes to bypass prior authorization or LCD restrictions, auditors will flag those claims for recoupment. Training billing personnel to double-check local coverage policies ensures that claims align precisely with current billing guidelines.

Real Exposure Under Federal Statutes

The risks linked to statutory non-compliance are not just limited to denial of claims.  Compliance risks related to molecular diagnostic services can have far-reaching consequences, including the imposition of heavy statutory penalties under the False Claims Act, Stark Law, and EKRA. Pursuant to the False Claims Act, if one submits claims for tests that do not have a documented medical necessity, this may result in the payment of triple damages plus the imposition of compulsory civil money penalties per claim.

Labs need to figure out as well, how they relate their working relationships, if any, with ordering physicians, and clinical consultants. It is a federal crime under anti-kickback laws to distribute free point-of-care testing devices, offer lavish consulting arrangements, or to provide generous collection fees to ordering clinics. Basically speaking, financial arrangements between you and a referrer should only be as much as the Fair Market Value (FMV) of the service actually done. Besides, having clear and complete documentation of FMV determinations and legal opinions is another defense measure that every lab board should definitely work on.

About the Author

Ricky Bell (https://www.dastifysolutions.com/team/rickybell/) is Head of Operations at Dastify Solutions, where he oversees healthcare operations, revenue cycle management, and compliance initiatives for physician practices, clinical laboratories, and healthcare organizations across the United States. With extensive experience in medical billing, coding compliance, denial management, and revenue cycle optimization, he helps healthcare providers strengthen operational efficiency while maintaining regulatory compliance.

Resources

  1. U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG): Fraud Alert: Genetic Testing Scam.
    https://oig.hhs.gov/fraud/consumer-alerts/fraud-alert-genetic-testing-scam/
  2. American Health Law Association (AHLA): Fraud and Abuse Issues in Diagnostic and Molecular Testing.
    https://www.healthlawyers.org
  3. Centers for Medicare & Medicaid Services (CMS): MolDX: Molecular Diagnostic Tests (LCD L35025).
    https://www.cms.gov/medicare-coverage-database/view/lcd.aspx?lcdid=35025
  4. Kaiser Family Foundation (KFF): Coverage of Breast Cancer Screening and Prevention Services.
    https://www.kff.org/womens-health-policy/coverage-of-breast-cancer-screening-and-prevention-services/
  5. National Center for Biotechnology Information (NCBI / PMC): The Genetic Testing Stewardship Program: A Bridge to Precision Diagnostics for the Non-genetics Medical Provider.
    https://pmc.ncbi.nlm.nih.gov/articles/PMC9124555/

Copyright © 2026 American Institute of Healthcare Compliance All Rights Reserved

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HIPAA Compliance
General Compliance, HIPAA

Before PHI Enters a SaaS Workflow

Building a Vendor Evidence Register 

Written by Coco Yang 

Introduction

A clinic can approve a scheduling platform and still miss the place where patient information leaves the approved path. An intake form may pass data to the scheduler, which sends a notification through an email service, creates a record in a customer relationship management system, and copies details into an analytics tool. The vendor review may have covered the scheduling platform. The actual workflow contains four or five services.

That is why a product name and a "HIPAA compliant" statement are not enough to document a SaaS decision. The review needs to identify the exact service, plan, configuration, integrations, users, and data flow. It also needs a record of what each source supports, what it does not support, and what still requires an answer from the vendor.

A vendor evidence register provides that record. It is not a certification score and should not replace legal, privacy, security, procurement, or clinical review. It is a practical way to keep the evidence behind a decision visible before protected health information (PHI) enters a software workflow.

Start With the Workflow, Not the Vendor Name

The first question is not simply, "Does this vendor support HIPAA?" A more useful starting question is, "What will this organization do with this exact service?"

Write down the product edition and paid plan, the features that will be enabled, the people who will have access, and the systems that will send or receive data. Include support tools, exports, backups, browser extensions, mobile applications, application programming interfaces, automation services, and optional artificial intelligence features. Then identify where PHI is expected to be created, received, maintained, or transmitted.

This boundary matters. A vendor may make a business associate agreement (BAA) available only for certain products, plans, customers, or configurations. An integration may be provided by another company. A feature may use a separate sub-processor or different retention setting. HHS guidance on cloud computing advises covered entities and business associates to understand the cloud environment they are using so they can conduct their own risk analysis and enter into appropriate agreements.

A simple workflow sentence helps anchor the review. For example: "Patients submit contact and appointment information through Form A; the data is stored in Scheduler B; staff members access it through managed accounts; appointment reminders are sent through Service C; no PHI is sent to analytics." If the team cannot write that sentence with confidence, it is too early to approve the workflow.

Keep Different Kinds of Evidence Separate

Vendor material often arrives as a mixed folder of contracts, reports, help-center pages, questionnaires, and sales statements. These sources do not answer the same questions.

A BAA is contractual evidence. HHS explains that a business associate contract establishes permitted and required uses and disclosures, requires safeguards, addresses incident reporting, applies restrictions to relevant subcontractors, and covers return or destruction of PHI at termination when feasible. The review still needs to confirm that the agreement applies to the exact legal entity and service being purchased.

A SOC 2 report is security-assurance evidence. It can help a reviewer understand the systems, controls, time period, exceptions, and subservice organizations described in the report. It does not establish that the vendor will sign a BAA, that the intended product is included in the BAA, or that the customer's configuration is appropriate.

Product documentation explains how features work. It may describe access controls, audit logs, retention settings, encryption, data regions, or deletion behavior. Marketing language is a weaker source. It can point the team toward a question, but it should not be treated as proof that a contract, report, or technical control covers the planned workflow.

Keeping these evidence types separate prevents one familiar logo or badge from doing more work than it should.

What to Record

The register does not need to be elaborate. A spreadsheet, ticket, or procurement record can work if it preserves enough context for another reviewer to reconstruct the decision. For each item, record:

  1. The source title, owner, and location.
  2. The date it was retrieved and, when applicable, its effective period or report period.
  3. The legal entity, product, plan, feature, and region it covers.
  4. The conclusion the source supports.
  5. Conditions and limitations stated in the source.
  6. Questions that remain open and the person responsible for resolving them.
  7. The date or event that will trigger another review.

Short conclusions are more useful than broad labels. "Vendor says HIPAA compliant" is difficult to act on. "BAA offered for the Enterprise plan; analytics add-on not named; vendor confirmation pending" tells the next reviewer what is known and where the uncertainty sits.

The same discipline should be used for security evidence. Instead of recording "SOC 2 available," note the report type, review period, system description, relevant exceptions, complementary customer controls, and whether important subservice organizations are included or carved out.

Check the Operational Questions

Contracts and assurance reports are only part of the review. The intended use also depends on routine operational details.

Ask which sub-processors may create, receive, maintain, or transmit PHI. Confirm how administrators and support personnel obtain access, whether that access is logged, and how emergency support is handled. Review default retention, backup retention, deletion timing, export behavior, account termination, and the process for returning or destroying data.

Incident language deserves the same attention. Identify where the vendor describes security incidents and breach notification, who receives notice, and whether the timing and cooperation terms match the organization's requirements. Customer-side safeguards should also be explicit: identity management, multifactor authentication, role design, device controls, logging, staff training, approved integrations, and procedures for offboarding users.

A signed BAA does not configure the product. HHS risk-analysis guidance makes clear that regulated organizations must identify potential risks and vulnerabilities to all electronic PHI they create, receive, maintain, or transmit. The vendor's evidence informs that work; it does not perform the organization's risk analysis for it.

Use Evidence States Instead of a Single Verdict

A binary field labeled "compliant" hides too much. Evidence is often conditional, incomplete, inconsistent, or old. A small set of evidence states makes the record more honest:

  • Supported: the source directly supports the conclusion for the identified scope.
  • Conditional: the conclusion depends on a plan, configuration, contract, location, or customer action.
  • Missing: the needed source has not been obtained.
  • Conflicting: two sources disagree or describe different scopes.
  • Stale: the source no longer reflects the current product, contract, report period, or workflow.

These are evidence states, not compliance determinations. They help the organization route questions to the right owner and avoid treating silence as approval.

Review Again When Something Changes

An annual vendor review is useful, but a change in the workflow can make last month's evidence incomplete. Set event-based review triggers for a new contract or BAA, a plan change, a new integration, a material sub-processor update, revised retention terms, a new artificial intelligence feature, a security incident, or a change in the type of PHI being handled.

The register should also have an owner. Procurement may hold contracts, security may review assurance reports, privacy or compliance may assess uses and disclosures, and the operational team may know the actual configuration. Someone must be responsible for assembling those pieces and recording the final conditions of use.

Conclusion

A SaaS review is easier to defend when another person can see exactly what was reviewed, when it was reviewed, and which workflow the decision covered. Begin with the data path. Separate contractual, assurance, product, and marketing evidence. Record scope and dates. Preserve unresolved questions. Reopen the review when the service or workflow changes.

The purpose of a vendor evidence register is not to produce a universal badge. It is to make the reasoning behind a decision inspectable before PHI enters the workflow. Final decisions should remain with the organization's qualified legal, privacy, security, compliance, procurement, and operational professionals.

About the Author

Coco Yang is the Founder of ComplySaaS, an educational SaaS vendor compliance research project that organizes public HIPAA, BAA, PHI, and SOC 2 signals, source dates, workflow conditions, and verification questions. Her work is limited to documented vendor-research practice; she is not presenting herself as an attorney, auditor, healthcare provider, or compliance certifier. Company website: https://www.complysaas.com/

References

U.S. Department of Health and Human Services. "Guidance on HIPAA & Cloud Computing."

U.S. Department of Health and Human Services. "Business Associate Contracts."

U.S. Department of Health and Human Services. "Guidance on Risk Analysis."

National Institute of Standards and Technology. "SP 800-66 Rev. 2: Implementing the HIPAA Security Rule."

Copyright © 2026 American Institute of Healthcare Compliance All Rights Reserved

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Healthcare Revenue Cycle Compliance
Billing/RCM

Healthcare Revenue Cycle Compliance

Common Risks and How Practices Can Address Them 

Written by: Zara Ahmad 

A revenue cycle rarely breaks because of one dramatic mistake. More often, the problem begins with something ordinary: an insurance card was updated but the old plan stayed in the system, a provider’s note lacked enough detail for coding, or a denied claim was resubmitted before anyone checked the first one.

Compliance is not limited to the billing office. It starts when patient information is collected and continues through documentation, coding, claim submission, payment posting, denials, and follow-up.

Where Compliance Risks Can Enter the Revenue Cycle

Consider a routine office visit. The front desk enters the patient’s demographic and insurance information. If the member number is wrong, or the payer on file is outdated, the claim may already be inaccurate.

The next risk may appear in the medical record. A provider knows what happened during the visit, but a coder can only rely on what is documented. If a note is vague, staff should not fill in missing details from habit or assumption.

Charge capture creates another point of exposure. A service can be missed, entered twice, or attached to the wrong date. Later, a biller may resend a denied claim without confirming whether the original is still processing. Payment posting and accounts receivable follow-up can create problems too, especially when adjustments or corrections receive little review.

Common Revenue Cycle Compliance Risks

One familiar risk is a mismatch between the medical record and the claim. The service billed should be supported by the documentation. CMS guidance for Medicare makes documentation part of determining whether applicable coverage, coding, billing, and payment requirements are supported.

Incomplete documentation is often less obvious. A note may show that care occurred but still omit information needed to support a code, modifier, or service level. If that happens regularly, the issue is no longer just one troublesome claim.

Administrative mistakes matter as well. Incorrect patient details, insurance information, provider identifiers, and dates of service can cause denials and repeated corrections. Duplicate claims are another example. When payment is delayed, resubmitting the same claim may feel harmless, but claims-processing rules include duplicate edits.

Corrections need a consistent approach – contingent upon the payer and circumstances, the right step may be a corrected claim, replacement claim, appeal, or another defined process.

Why Documentation and Coding Accuracy Matter

Documentation, coding, and billing are different jobs, but they should describe the same encounter.

Suppose a coder returns the same type of note to the same provider several times each month because one detail is routinely missing. Correcting each claim solves the immediate problem, not the workflow problem.

A short, focused discussion with the provider may be more useful than another round of individual corrections. The aim is simply to make sure the record clearly reflects the service provided and gives coding staff the information they need.

Using Internal Audits to Identify Compliance Risks

Internal audits are most useful when they answer a specific question.

A manager might sample claims involving a frequently used modifier, one provider, a service with rising denials, or a payer that has generated repeated corrections. The review can compare claims with medical records, check key fields, examine adjustments, and see whether staff followed internal procedures.

Patterns often tell the real story. Several eligibility denials traced to the same registration step suggest a front-end workflow problem. Repeated coding questions may point to training or documentation habits instead.

An audit should lead somewhere. Someone needs to own the follow-up, record what changed, and later check whether the change helped.

Building a Stronger Compliance Culture

Compliance works better when people see how their own work affects the claim. Front-office staff influence patient and insurance information. Providers influence documentation. Coders and billers influence what reaches the payer. Managers decide whether recurring problems are investigated or simply worked around.

OIG’s General Compliance Program Guidance discusses written policies, education, communication, auditing and monitoring, and corrective action as parts of a compliance program. In everyday practice, those ideas are more useful when connected to real problems rather than treated as an annual checklist.

Training should follow the same principle. If an audit finds repeated modifier errors, train on that issue. If registration mistakes are driving denials, review that workflow with the people who perform it.

Practical Steps Healthcare Practices Can Take

  1. Review a representative sample of claims regularly.
  2. Compare billed codes with the supporting medical record.
  3. Track denials and claim corrections by reason.
  4. Review write-offs, refunds, adjustments, and claim changes for consistency.
  5. Use recurring errors to guide staff and provider education.
  6. Keep billing and compliance procedures current and easy to find.
  7. Document corrective actions and check whether they worked.
  8. Follow relevant CMS, OIG, and other authoritative guidance as requirements change.

Keeping Compliance Part of Everyday Work

No revenue cycle will be completely free of errors. What matters is what happens after a mistake is found. Comply with overpayment rules. Submit appropriate claims adjustments, credit balance reports, or self-reported refunds directly to your assigned Medicare contractor.

Investigate. Correct the affected account, but do not stop there. Ask where the error entered the process, why it was not caught earlier, and whether the same thing is happening elsewhere. That turns compliance from a periodic exercise into part of ordinary revenue cycle work. Over time, it can reduce avoidable rework, support more accurate billing, and leave a practice better prepared when claims are reviewed.

About the Author

Zara Ahmad is a healthcare industry professional and Marketing Team Lead at MedsIT Nexus, with a focus on healthcare revenue cycle management, healthcare operations, and industry education. Her work involves developing educational resources on healthcare administration, revenue cycle processes, and operational challenges affecting healthcare organizations.

Resources – obtain training in conducting internal audits and investigations from the American Institute of Healthcare Compliance, a Licensing/Certification partner w/CMS.

Copyright © 2026 American Institute of Healthcare Compliance All Rights Reserved

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Healthcare Revenue Cycle Compliance
Billing/RCM

HCC Coding in 2026

Navigating Risk Adjustment in a Changing Healthcare Landscape 

Written by: Joy Rose, MSA, RHIA, CCS, CHA, CHPS 

In 2026, Hierarchical Condition Category (HCC) coding continues to evolve as a central pillar of risk adjustment in value-based care. Initially introduced by the Centers for Medicare & Medicaid Services (CMS) to project healthcare costs and determine payments for Medicare Advantage (MA) plans, HCC coding has become a strategic necessity across multiple payers and care settings.

Medicare Advantage Organizations (MAOs) are paid at a higher rate for patients who have conditions with greater levels of severity and multiple conditions, as their RAF scores and anticipated costs of care will be higher.

Key 2026 Medicare Advantage (MA) Cost Reporting Requirements

CMS requires Medicare-certified acute care hospitals reimbursed under the IPPS (inpatient prospective payment system) to report median negotiated payment rates from Medicare Advantage (MA) plans by MS-DRG on their annual cost reports for cost reporting periods ending on or after January 1, 2026.

This mandate aims to collect market-based data to set future inpatient prospective payment system (IPPS) relative weights.

  • Data will be used to set future MS-DRG weights likely by Fiscal Year 2029.
  • This requirement adds significant complexity to an already error-ridden annual Cost Report process.

Providers must ensure the accurate reporting of MA negotiated rates to avoid potential audit findings, as this data will influence future payment setting.

New in 2026 - Full transition to V28 Model has occurred

One of the biggest updates in 2026 is the full implementation of the CMS-HCC V28 model, which was first introduced in 2023. This model includes significant changes:

  • More clinically relevant or accurate groupings, especially for chronic conditions like diabetes and congestive heart failure.
  • Expanded but refined HCC categories: V28 increases the number of HCC categories from 86 to 115, creating more granular groupings while reducing additive combinations.
  • Renumbering and changing HCC categories.
  • Removal of some condition codes that were found to be less predictive of future healthcare costs.
  • Reduction in the number of ICD-10-CM codes from 9,797 to 7,770 (approximately 2294 codes deleted and 268 codes added)
  • More accurate clinical data and the use of data-drive results with the use of 2018 ICD-10-CM codes and 2019 payment information.

Healthcare providers must now re-map workflows for diagnosis coding processes and re-educate coding staff to ensure accurate code assignment based on the documentation provided by clinicians.

Greater Emphasis on Documentation Integrity - With more sophisticated audits by CMS and private payers, clinical documentation improvement (CDI) remains a top priority. Inaccurate or unsupported codes now carry steeper compliance risks, and real-time documentation tools are being widely adopted to assist clinicians. Clinicians must be educated and trained about the new model which will require even greater specificity in documentation and code assignment to ensure that the true level of the Medicare Advantage patients’ illness severity is captured and transmitted to CMS for appropriate costs analysis.

AI and NLP Integration - Natural Language Processing (NLP) and artificial intelligence (AI) tools are increasingly embedded in EHR systems to assist in identifying undocumented HCCs and improving capture rates. These tools help flag missed conditions, identify hierarchical overlaps, and ensure that chronic conditions are properly documented and reported annually. AI has its limitations according to a colleague managing denials.

Important Note - The AI tool that is being tested a major Boston medical facility is not intelligent enough to find HCCs, or even ICD-10 codes to ensure a robust denial can be created.  The medical team working with the denials team does not approve the AI findings in about 80% of the AI suggestions.

Key Challenges - Training and education remain critical as coding teams and clinicians adjust to new rules and technology.  In addition, there is coding fatigue from increased workload and regulatory pressure may affect coder accuracy and job satisfaction.

Providers must also balance HCC optimization with ethical standards and compliance, avoiding aggressive or unsupported upcoding practices. It is important for organizations to realize there is increased CMS scrutiny, by flagging providers as high-volume billing outliers or submitting claims with unusually high severity levels.

Opportunities:

  • Risk-adjustment data analytics now allow organizations to benchmark performance and track documentation trends in real time.
  • Proactive condition management enabled by accurate HCC coding allows payers and providers to better target care management and reduce preventable costs.
  • Interoperability and FHIR-based data exchange in 2026 enable smoother sharing of clinical data across systems, improving longitudinal risk tracking.
  • Increased focus on severity of patient diagnosis and claims by CMS

Real World Impact

As CMS moves further into outcome-based models and enhances its oversight of MA payments, the role of HCC coding will only grow in significance. Health systems that invest in robust CDI programs, AI-assisted coding tools, and clinician training will be better positioned to thrive in this value-based future.

Some analysts warn the shift could lower RAF scores 10-20% for providers still relying on V24-era documentation habits, since patients whose only qualifying condition was deleted in V28 effectively disappear from risk registries. Plans with large diabetic populations that previously captured a lot of complication-related detail are seeing the steepest declines, though expanding documentation breadth across different disease families can partly offset this.

Because of the revenue pressure, CMS/OIG have signaled they'll be watching closely for organizations overcompensating with inflated severity coding.

About the Author

Joy Rose, MSA, RHIA, CCS, CHA, CHPS is a member of the American Institute of Healthcare Compliance (AIHC) and serves as a subject matter expert on the AIHC Volunteer Education Committee.

References:

Copyright © 2026 American Institute of Healthcare Compliance All Rights Reserved

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Documentation Integrity Starts with Valid Authentication

Written by Joanne Byron, LPN, BS, CCA, CIFHA, CHA, COCAS, CORCM, CHCO, HPOC, OHCC, CMDP, ICDCT-CM/PCS 

This short article addresses a complex topic and is not intended as consulting or legal advice. The content is not all-inclusive. 

Introduction

Documentation integrity is the foundation of patient safety and legal protection, and it begins with the valid authentication of every medical record entry. By properly verifying a provider's identity, healthcare systems ensure accountability, prevent unauthorized alterations, and maintain the clinical trustworthiness required for high-quality care.

Medical documentation serves as the legal, clinical, and financial foundation of patient care. An entry in a patient's chart is much more than a routine administrative task; it is a legally binding testament to the care provided, the rationale behind clinical decisions, and the direct observations of a specific practitioner. Because clinical reasoning is unique to the individual practitioner who evaluates a patient, the integrity of that record relies entirely on traceability—the ability to definitively link clinical data to the exact individual who created it. Valid signatures and proper authorization of medical records serve as legal proof that a licensed provider performed, reviewed, or ordered the care documented.

  • Valid authentication is the fundamental anchor of medical documentation integrity. It transforms digital text into a legally binding, trustworthy medical artifact.
  • Without proof of exactly who authored an entry at a precise time, healthcare records lose their clinical reliability, legal defensibility, and billing compliance.

Strict authorship and authentication rules mandate that only the healthcare professional who performed a service, made an observation, or gave an order may authorize the entry. Delegating this responsibility by allowing one provider to authenticate or "sign off" on another's notes is a critical violation of medical record integrity and regulatory standard.

Why No One Can Authenticate a Note for Another

First-Hand Knowledge and Accountability - The provider who performed the assessment is the only person who can truly verify the accuracy, nuance, and medical necessity of the documented care. Signing a note without first-hand knowledge means the authenticator cannot legally or ethically swear to the validity of the observations, creating a falsified record of the encounter.

Fraud and Abuse Implication - In billing and compliance, authenticity concerns regarding the legitimacy of documentation can trigger severe penalties. If a physician authenticates a note for a mid-level practitioner or colleague whose work they did not observe, it artificially validates services that the signer cannot legally account for, frequently resulting in claim denial and accusations of healthcare fraud.

Legal Admissibility - In a court of law, medical records are routinely scrutinized under the business records exception to hearsay. If a record is printed, requested for a malpractice suit, and the metadata shows that Provider B signed Provider A's note without being in the room or evaluating the patient, the record’s legal admissibility is immediately jeopardized.

The Difference Between Countersigning and Authentic Authoring

It is a common misconception that "countersigning" is the same as authenticating another's note. While supervising or attending physicians are often required by hospital bylaws to countersign the documentation of residents, interns, or students, this countersignature serves as a verification of supervision or oversight, not a transfer of authorship.

The original author still maintains full responsibility for writing the note, and the countersignature simply proves the supervising physician reviewed the care, rather than replacing the original clinician's signature.

Authentication is the Non-Negotiable Foundation

Medical documentation integrity relies entirely on the accuracy and trustworthiness of the health record. It dictates that every diagnosis, treatment, and clinical observation is reliable enough to support patient safety and billing accuracy.

At the absolute center of this integrity lies authorship validation. Without secure authentication, it becomes impossible to prove who created or altered a specific piece of clinical data. Valid authentication guarantees that the provider who performed the care is definitively linked to the record of that care.

1.    Patient Safety and Continuity of Care

Clinical decision-making relies entirely on the history of previous treatments, medications, and diagnoses. If a provider cannot verify the identity of the clinician who entered a critical lab note or medication order, patient safety is severely compromised. Secure logins and electronic signatures establish clinical accountability, allowing care teams to trust the information they are acting upon.

2.    Legal Defensibility and Evidence

In medical malpractice lawsuits, the medical record acts as the definitive legal evidence. To be admissible in court, the record must be validated as an accurate and uncorrupted version of events. Robust authentication—such as a password protected electronic signature linked to comprehensive system metadata—proves that a specific clinician took responsibility for the information at a specific date and time.

3.    Reimbursement and Regulatory Compliance

Healthcare revenue cycles rely on billing for services that are strictly documented and verified by the practitioner. Guidelines from the Centers for Medicare & Medicaid Services (CMS) require that all services be authenticated by the author. Furthermore, HIPAA regulations mandate strict user identification and access controls to prevent fraudulent entries or data breaches. Proper authentication acts as an organization's proof of work and regulatory adherence.

Technology Enforcing Authentication Integrity

In modern Electronic Health Record (EHR) environments, verifying the author requires sophisticated digital controls rather than a simple typed name. The integrity of these digital records is enforced through:

  • Multi-Factor Authentication (MFA): Requires users to verify their identity through multiple methods (e.g., a password paired with a push notification or biometric scan).
  • Role-Based Access Control (RBAC): Ensures that clinicians only interact with and authenticate records that fall within their designated scope of practice and clinical responsibilities.
  • Tamper-Proof Audit Trails: Logs every single time a record is viewed, created, or modified, tracking exactly who made the entry, the exact time, and the device used.

EHR systems must use secure logins, digital certificates, or biometric scans to authenticate the author to comply with CMS, Joint Commission, State regulations, and FDA guidelines. For example:

  • The Joint Commission (TJC): TJC requires that all entries in the medical record be authenticated by the author, dated, and timed.
  • CMS Guidelines: CMS strictly prohibits "swoop and hoop" or auto-authentication practices where providers sign off on large batches of notes without individually reviewing them.
  • State Regulations: Individual state medical boards maintain specific laws regarding timeframes for record completion (e.g., dictating that notes must be signed within 24 to 48 hours).

Conclusion

Medical documentation is only as reliable as its source. By establishing a clear, verifiable link between the clinical event and the responsible provider, valid authentication prevents fraud, protects medical professionals, and above all, ensures patient safety. Without it, the entire foundation of healthcare data integrity collapses.

About the Author

Joanne Byron, BS, LPN, CCA, CHA, CHCO, CHBS, CHCM, CIFHA, CMDP, COCAS, CORCM, OHCC, ICDCT-CM/PCS is an executive educator with the American Institute of Healthcare Compliance, a Licensing/Certification non-profit partner with CMS. She shares her experience of over 40 years as a nurse, consultant, auditor, and investigator in the healthcare field.

References

American Institute of Healthcare Compliance - Clinical Documentation Improvement online training

https://dev-main.aihc-assn.org/product/clinical-documentation-improvement/

CMS

https://www.cms.gov/files/document/mln905364-complying-medicare-signature-requirements.pdf

https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/pim83c03.pdf

https://www.wpsgha.com/guides-resources/view/227

Copyright © 2026 American Institute of Healthcare Compliance All Rights Reserved

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The Imperative of Documentation Integrity

Addressing the Healthcare Data Crisis 

Written by Joanne Byron, LPN, BS, CCA, CIFHA, CHA, COCAS, CORCM, CHCO, HPOC, OHCC, CMDP, ICDCT-CM/PCS 

The information in this article primarily applies to providers when recording patient encounters in their office or other places of service. Content is for educational purposes only and is not intended as consulting or legal advice.

Introduction

Clinical documentation represents the foundational pillar of modern healthcare, ensuring patient safety, care continuity, accurate reimbursement, and the ethical use of medical data for research. However, the healthcare industry is currently grappling with a severe data crisis driven by the proliferation of historical documentation errors.

  • The transition from paper-based charts to Electronic Health Records (EHRs), while designed to streamline operations and reduce medical errors, has inadvertently introduced systemic vulnerabilities that compromise the integrity of clinical data.

The modern healthcare data crisis is not simply a matter of lost or misplaced files; it is a systemic degradation of data quality caused by the cumulative effect of historical documentation errors. At the center of this crisis is the phenomenon known as "chart lore" or "note bloat," where inaccuracies and redundancies are perpetuated across multiple patient encounters.

Several structural and behavioral factors drive this crisis:

  • Overuse of Copy/Paste and Cloning: The implementation of EHRs introduced time-saving functionalities such as the "copy-forward" or copy/paste features. Studies have revealed that over 50% of the text in inpatient and outpatient notes is duplicated. This practice often results in carrying over outdated, irrelevant, or entirely incorrect clinical information (e.g., documenting an allergy that was proven false years prior), creating information overload and increasing the risk of adverse events.
  • Template and Drop-Down Menu Errors: The reliance on pre-populated templates and drop-down menus can lead to "mouse-click errors," where a provider accidentally selects a normal finding for an abnormal condition. These errors obscure the true "patient story" and result in contradictory or missing clinical context.
  • Patient Matching and Interoperability Failures: Poor data entry and fragmented system integration contribute to patient misidentification. Industry surveys indicate that up to 20% of patients may not be correctly matched to their records, leading to scenarios where providers make treatment decisions based on another individual’s medical history.
  • Defensive and Billing-Driven Documentation: Because healthcare systems rely on Evaluation and Management (E/M) codes and reimbursement structures, clinicians are often pressured to document excessively to satisfy complex billing requirements, rather than focusing purely on clinical utility. This return-on-investment approach distorts the clinical record and leads to defensive medicine.
    • In light of Evaluation & Management guidelines allowing time or medical decision-making for many codes, providers must remember, when time is used, the complexity of the visit must be reflected to support longer visit times (higher reimbursed codes). Payers will question when high levels of service are billed but the note does not reflect the amount of work to support reimbursement.

Artificial Intelligence and the Physician/Provider Burden

Ironically, the tools intended to make documentation easier, EHR systems, have become a leading driver of clinician stress and burnout. The "cognitive load" of navigating drop-down menus and templating systems detracts from face-to-face patient time. And now with Artificial Intelligence (ambient scribes) being integrated into clinical documentation, the burden can become overwhelming due to time to ensure there are no errors in the record. AI is being built of historical information that is peppered with errors, inaccuracy, and omissions.

Despite promised efficiency gains, a large multi-center study found that AI ambient scribes saved a relatively modest 16 minutes of documentation time per eight hours of care. Because physicians are ultimately responsible for the accuracy of their medical records, they are forced to shift cognitive effort from typing to auditing—carefully reviewing AI-generated text to ensure no critical data has been omitted or misstated

Integrating artificial intelligence (AI) as ambient scribes in clinical settings reduces documentation time but yields distinct error profiles. Studies from the National Library of Medicine indicate that up to 70% of AI-generated notes contain at least one error, with an average of 2 to 3 errors per note. Omissions are the most common mistake, accounting for 71% to 83% of all errors.

Breakdown of AI Errors

Research shows that the types and frequencies of errors vary widely by system:

  • Omissions: Occurring in roughly 70-80% of recorded mistakes, this happens when AI leaves out critical details. Studies note that over 40% of these omissions carry moderate to significant clinical importance (e.g., omitting comorbidities or medication side effects).
  • Additions: Representing 4% to 11% of errors, this occurs when the AI fabricates or inserts information that was never discussed.
  • Hallucinations & Wrong Outputs: Fabricated or severely misidentified medical terminology.
  • Misplacements: Occurring in 6% to 25% of errors, where the AI correctly transcribes the info but places it in the wrong section of the chart.

Documentation Integrity & Accuracy Metrics

While traditional self-documentation by doctors can also be fragmented, ambient AI drafts often capture a much higher volume of the spoken interaction. However, this can sometimes lead to an inverse problem of information overload for the physician reviewing notes for accuracy.

Patient Safety and Clinical Continuity

The primary purpose of any clinical note is to support continuous, high-quality patient care. Outpatient practices frequently treat patients across extended timelines and involve diverse clinical staff. Therefore, documentation integrity is critical for several interconnected reasons:

  • Preventing Diagnostic and Medication Errors: When previous providers fail to update active problem lists, or when notes contain contradictory information, the risk of adverse events skyrockets.
    • Accurate documentation ensures that allergy lists, historical diagnoses, and ongoing treatment regimens are clear, preventing medication interactions and duplicative testing.
  • Facilitating Coordinated Care: In an era of team-based care and interoperability, patient notes are often referenced by external specialists, primary care physicians, and allied health professionals.
    • Complete, up-to-date clinical notes give care teams a holistic view of a patient’s health journey, allowing them to make informed, data-driven decisions.

Financial Sustainability and Revenue Cycle

Documentation dictates reimbursement and an organization’s ability to support compliant billing and reimbursement. In outpatient settings, practices rely on Evaluation and Management (E/M) coding guidelines established by the Centers for Medicare & Medicaid Services (CMS) and the American Medical Association (AMA).

  • Reducing Claim Denials: Payers use automated systems to verify that documented services match the billed codes. Incomplete or vague documentation leads to high rates of claim denials, requiring expensive and time-consuming rework for billing staff.
  • Combating the "Cloning" Risk: EHRs offer time-saving features like "copy-and-paste," "carry-forward," and auto-fill. While efficient, these features frequently lead to documentation cloning, where notes contain outdated or clinically irrelevant information.
    • Payers increasingly view cloned notes as a compliance risk, which can lead to delayed payments or allegations of upcoding, leading to allegations of violating the False Claims Act.

The Clinical and Legal Repercussions

The accumulation of these errors across vast databases has severe, real-world consequences for patient safety and institutional liability. Regulatory bodies, including the Department of Health and Human Services (HHS) Office of Inspector General (OIG), heavily scrutinize outpatient billing. Ensuring documentation integrity limits the financial and reputational damage of audits:

  • Demonstrating Medical Necessity: Every medical service must be justified by documented medical necessity. Documentation must clearly demonstrate why a course of action was taken and what alternatives were considered. Without this, practices are vulnerable to recoupment during post-payment audits.
  • Combating Fraud, Waste, and Abuse: Accurate charting protects both the provider and the organization. Attempting to add missing information or diagnoses to a chart after an audit has been initiated is a serious legal violation that carries civil and criminal penalties. Maintaining real-time, tamper-evident documentation is the best legal defense for providers.
  • Patient Harm and Medication Errors: Data integrity issues directly impact diagnostic accuracy and treatment planning. Studies indicate that a significant percentage of EHR-related events—sometimes cited as over one-third of cases—have life-threatening potential. When providers are forced to skim through bloated records, critical changes in a patient's condition or medication history are frequently missed.
  • Artificial Intelligence and Big Data Limitations: The current push toward integrating artificial intelligence (AI) and machine learning (ML) into healthcare relies entirely on the premise of data accuracy. However, because a high percentage of EHR records contain documentation errors, predictive models are frequently built on flawed or "missing" data indicators, which compromises their clinical reliability and introduces unconscious biases into algorithmic decision-making.
  • Malpractice Liability: Legal teams increasingly scrutinize EHR meta-data and documentation errors during litigation. Many EHR-related malpractice liabilities stem directly from documentation errors and omission, making inaccurate record-keeping a major risk management concern.

Strategies for Restoring Documentation Integrity

Addressing the healthcare data crisis requires a fundamental shift in how documentation is viewed, created, and audited. Organizations must move beyond billing-centric metrics and prioritize true Clinical Documentation Integrity (CDI). We simply need more documentation professionals, specifically in the outpatient setting where most care is rendered.

Implement Continuous CDI Programs - Healthcare facilities must establish dedicated CDI teams that routinely review and audit charts for clarity, completeness, and clinical accuracy. However, it is important that auditors and those training providers in CDI have structured training themselves first. Not all coding and billing auditors are qualified to conduct a documentation integrity audit. By educating all those involved on best practices and modern documentation guidelines, organizations can ensure that the patient's medical history accurately reflects their current clinical state.

Engage with organizations for online CDI training to improve the basic understanding of a compliant medical record. Registering qualified staff and/or providers with an organization which is a Licensing/Certification partner with CMS is recommended, such as the American Institute of Healthcare Compliance which offers online training with option to Certify as a Medical Documentation Professional.

EHR Usability and Design Overhaul - Software vendors and IT departments must collaborate to redesign EHR interfaces. This includes implementing strict limits on copy-paste functionalities, utilizing anomaly detection tools to flag duplicated or contradictory text, and enhancing interoperability to reduce patient matching errors.

Structured Data Capture - Shifting from unstructured narrative notes to standardized, structured data formats allow for better data reuse, less error-prone information exchange, and more effective clinical decision support systems.

Patient Engagement as a Verification Tool - Opening up EHRs to patients—allowing them to access their own health records and actively report discrepancies—has proven to be an effective strategy for identifying and resolving embedded "EHRrors" before they cause harm.

Conclusion

The historical degradation of healthcare data integrity poses a significant public health threat, turning patient records from life-saving tools into repositories of perpetuated errors.

To mitigate this crisis, the healthcare ecosystem must prioritize actionable, systemic reforms. By investing in enhanced EHR design, responsible implementation of integrating AI, rigorous auditing and compliance, and a culture of clinical clarity, the industry can restore trust in medical data and safeguard patient lives.

Outpatient practices can no longer treat clinical documentation as a mere administrative byproduct. Documentation integrity is the structural backbone of patient safety, financial compliance, and legal protection. By actively investing in CDI processes, ongoing provider education, and optimized EHR workflows, outpatient practices can safeguard patient outcomes, reduce audit vulnerabilities, and restore clinician satisfaction.

About the Author

Joanne Byron, BS, LPN, CCA, CHA, CHCO, CHBS, CHCM, CIFHA, CMDP, COCAS, CORCM, OHCC, ICDCT-CM/PCS is an executive educator with the American Institute of Healthcare Compliance, a Licensing/Certification non-profit partner with CMS. She shares her experience of over 40 years as a nurse, consultant, auditor, and investigator in the healthcare field.

References

Copyright © 2026 American Institute of Healthcare Compliance All Rights Reserved

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