Navigating the ever-growing maze of healthcare regulations can feel overwhelming for any practice owner. The landscape is constantly shifting, with new rules and requirements emerging regularly.  

With these constant changes, it’s easy for compliance to fall through the cracks. Unfortunately, these oversights carry significant risks, including hefty fines, costly lawsuits, and, most importantly, compromised patient care.  

Integrating healthcare compliance into the daily operations of your medical practice isn’t just about avoiding penalties—it’s about building trust, ensuring patient safety, and fostering a culture of excellence.  

This guide provides a comprehensive overview of key compliance areas and offers practical strategies to help your practice thrive in this demanding environment.  

Key Takeaways: 

• Key aspects of maintaining an ethical practice including electronic health record (EHR), HIPAA, patient safety, and billing compliance 

• Essential regulatory programs impacting your practice 

• Importance of quality reporting and performance tracking 

• A checklist to help ensure all compliance activities are performed consistently 

What Is Healthcare Compliance? 

Healthcare compliance encompasses the policies, procedures, and practices that medical practices implement to adhere to federal and state laws, regulations, and professional standards.  

Compliance has multiple purposes: to prevent fraud, protect patient privacy, ensure accurate billing, and maintain high-quality patient care. Here is a deeper explanation of these goals: 

• Privacy: Protecting patient health information (PHI) and adhering to HIPAA compliance 

• Billing: Ensuring accurate and ethical coding, claims submission, and reimbursement practices 

• Documentation: Maintaining complete, accurate, and timely patient records that support medical necessity 

• Clinical Accuracy: Providing appropriate and safe care that meets professional standards and regulatory requirements 

HIPAA Compliance and Patient Privacy 

When protecting patient privacy and maintaining trust, HIPAA compliance is front and center. A cornerstone of healthcare compliance, HIPAA sets the standard for safeguarding PHI with EHR systems and other forms of patient data storage.  

Protecting PHI through proper access controls, encryption, and robust security measures is critical to preventing potential HIPAA violations, unauthorized access, and data breaches. So, what does a HIPAA violation look like?  

It can occur in many ways, such as disclosing patient information without authorization, failing to secure EHRs, or neglecting to provide patients with access to their medical records. For example, a staff member accidentally sharing a patient’s medical information via unencrypted email constitutes a HIPAA violation.  

Data breaches are also a critical concern for today’s practices. According to the FBI’s 2024 Internet Crime Report, a total of 444 reported incidents impacted healthcare, comprised of 238 ransomware threats and 206 data breach incidents.  

With so much at stake, medical practices must implement strong security protocols to protect against data breaches, malware attacks, and other cyber threats.  

Compliance in Electronic Health Records  

EHRs play a central role in modern compliance workflows. They provide a secure and efficient way to store, manage, and share patient information while supporting various compliance activities.  

For example, documenting medical necessity and maintaining accurate clinical documentation are essential for demonstrating that the services provided were necessary for the patient’s condition. And without proper documentation, denials happen.  

A Health Affairs article revealed Medicare Advantage (MA) denies 17% of initial claims. These denials result from several factors, including medical necessity requirements. The article also stated that denials resulted in a 7% net reduction in provider MA revenue. 

With these statistics, it is clear that complete and accurate documentation not only supports billing accuracy but also protects against claim denials, lost revenue, potential audits, and legal challenges. 

Audit Trails 

Audit trails in EHR systems are crucial for supporting compliance, accountability, and tracking user activity. An audit trail records all actions taken within the EHR, including who accessed what information, when, and what changes were made.  

This functionality allows practices to monitor user activity, detect potential security breaches, and demonstrate compliance with regulatory requirements. 

Coding, Billing and Documentation Compliance 

Accurate coding and clinical documentation are crucial for ensuring compliance in medical practices and maintaining the integrity of the revenue cycle.  

Medical billing errors can lead to claim denials, payment delays, and potential penalties. Common billing errors include: 

• Upcoding (billing for a more expensive service than provided) 

• Downcoding (billing for a less expensive service)  

• Submitting duplicate claims 

• Incorrect codes 

Most physicians try to ensure accuracy in billing. Still, mistakes happen.  

For example, suppose you are an oncologist who frequently treats highly complex patients. You consistently report the highest-level evaluation and management service regardless of the actual condition your patient presents with.  

While this isn’t always upcoding, you should accurately report the level of E/M code based on the patient’s condition, not just your specialty.  

Investing in the Right Tools 

To avoid these errors, practices should invest in EHR and billing accuracy tools that automate coding processes, verify insurance eligibility, and identify potential billing errors before submitting claims.  

For example, EverHealth offers an integrated ecosystem of EHR, communication tools, practice management, and charge capture solutions. These tools support accurate, complete, and compliant payer requirements.  

For instance, the EverHealth EHR solution integrates medical billing software that improves clean claim rates, reduces human errors, and automates parts of your workflow that reduce efficiency. Some compliance features include: 

• Billing profiles: This tool ensures that the correct codes are consistently applied by easily setting ICD-10, CPT, HCPCS, and NDC codes to your most common procedures. You can set up frequent diagnoses or types as a profile to reduce data entry. 

• Real-time eligibility verification: This feature instantly checks insurance eligibility in real-time, before an appointment, to ensure payment is guaranteed.  

• Claim submissions: Clearinghouse connections allow claims to be submitted electronically to the payer (EDI connection). They also ensure that payment and denial information flows directly into your EHR and posts electronically (Electronic Remittance Advice). 

Compliance Checklists and Workflow Optimization 

A medical practice compliance checklist can help you ensure all critical activities are performed consistently and thoroughly. Practices should conduct regular audits to verify compliance with this checklist and identify any areas that need improvement.  

The checklist should cover key areas of compliance, including: 

HIPAA: HIPAA has strict standards for protecting the confidentiality and security of PHI. Here are a few terms and rules your practice should know: 

• EHR security safeguards: Protects patient data from unauthorized access and breaches; they often include access controls, encryption, audit trails, multifactor authentication, and regular security updates 

• Breach notifications: Requires practices to notify patients when their unsecured PHI is used, disclosed, or “breached” in a way that compromises the privacy and security of the PHI  

• Business Associate Agreements: Contracts between a healthcare practice and third-party vendors that handle PHI, ensuring they comply with HIPAA regulations  

• HITECH (Health Information Technology for Economic and Clinical Health) Act: This act increases penalties for HIPAA violations and promotes the adoption of EHRs; HITECH incentivizes the adoption of EHRs through the Meaningful Use program, which requires providers to demonstrate the use of EHRs to improve patient care (more on Meaningful Use later in the guide) 

Billing: Take steps to ensure accurate documentation, proper coding, secure data management, and robust billing processes, including accurate claims submission and effective reimbursement practices. For example, using the correct CPT, ICD-10, and other codes is crucial for precise billing. 

FROM ONE OF OUR PARTNERS: Simplifying Compliance: How Medical Billing Services Keep You Audit-Ready 

Documentation: Providers must maintain accurate and complete health records within the EHR system. Creating policies and procedures to ensure data integrity and prevent waste, fraud, and abuse is a good starting point.  

Patient safety: Providers must adopt patient safety practices, such as utilizing secure communication tools and implementing robust EHR security measures to protect PHI and reduce potential medical errors. 

For example, one of our EverHealth solutions offers a HIPAA-compliant healthcare Communications Suite, including telehealth, secure messaging, universal inbox, and more, that supports integrations with many practice management and EHR platforms. 

Workflow Optimization 

Compliance workflows in healthcare ensure consistency and standardization in key processes, such as patient registration, documentation, and billing. For example, a robust compliance workflow for patient registration and documentation may include: 

• Streamlining patient intake with HIPAA-compliant online medical forms where practices can collect patient data, consent forms, insurance info, and photos 

• Verifying insurance eligibility in real time  

• Automating processes such as appointment scheduling and follow-up 

Regulatory Programs that Impact Your Practice 

Several regulatory programs can impact your practice and influence reimbursement rates. Here’s how: 

MACRA and MIPS Compliance 

MACRA, or the Medicare Access and CHIP Reauthorization Act, created the Quality Payment program (QPP). The QPP rewards high-quality Medicare physicians with payment increases, while reducing payments to clinicians who do not meet performance standards. 

Eligible clinicians have two tracks to choose from in the QPP based on their practice size, specialty, location, or patient population: 

1. Advanced Alternative Payment Models (APMs)  

2. The Merit-based Incentive Payment System (MIPS) 

MIPS affects Medicare payments based on performance. To participate in the program, you must select one of the available reporting options to fulfill requirements for each of the four performance categories: 

• Quality 

• Promoting Interoperability 

• Improvement Activities 

• Cost 

FROM ONE OF OUR PARTNERS: How EHR Integration Can Improve MIPS Reporting and Increase Incentives 

Meaningful Use Requirements 

Under MACRA, the Centers for Medicare & Medicaid Services EHR Incentive Programs, commonly referred to as Meaningful Use, was transitioned to become one of the four components of MIPS, which consolidates multiple quality programs into a single program to improve care.  

To qualify for incentive payments through the Incentive Programs, Meaningful Use sets specific objectives that eligible professionals and hospitals must achieve to participate. 

Meaningful Use Stages: 

• Stage 1: Data capture and sharing (interoperability): Key objectives include capturing patient data electronically, exchanging information between providers, and basic reporting of clinical quality measures.  

• Stage 2: Advanced clinical processes: This stage emphasizes the use of more advanced EHR functionalities. It includes improved care coordination, patient engagement through electronic portals, and more sophisticated reporting of clinical quality measures.  

• Stage 3: Improved outcomes: This stage is focused on advanced clinical processes and greater integration of EHRs with public health reporting systems.  

Though the requirements have evolved, the Meaningful Use principles remain relevant. Providers must demonstrate the effective use of EHRs to improve patient care, promote interoperability, and engage patients in their care. 

CMS Standards and How to Stay Aligned 

The CMS standards are the federal health and safety measures that healthcare organizations must meet to participate in and receive payment from Medicare and Medicaid programs.  

These standards, outlined in the Conditions of Participation (CoPs), cover various aspects of healthcare delivery, including:  

• Patient safety: CMS regulations emphasize patient safety and quality of care, including infection control, medication management, and fall prevention.  

• Privacy and security: Compliance with HIPAA regulations is crucial for protecting patient health information.  

• Billing and coding: Accurate and compliant billing practices are crucial for ensuring proper reimbursement and preventing fraud and abuse.  

• Quality reporting: Healthcare providers must report on various quality measures to assess and improve the care they provide.  

To stay aligned, practices should remain informed about CMS updates, implement appropriate policies, instill compliant billing practices, utilize advanced HIPAA-compliant technology, and conduct regular audits to verify compliance. 

For example, CollaborateMD by EverHealth is a cloud-based practice management platform solution with integrated medical billing software. The software provides features such as an electronic claim submission tool that ensures claims are created accurately, compliant with insurance regulations, and submitted promptly.  

This feature includes Level 2 Claim Edits (CCI, NCD/LCD, LMRP, Modifiers, and more). Providers can inspect claim errors before submitting them. This code scrubbing feature reduces denial rates and improves data accuracy.  

Risk Management and Patient Safety in Compliance 

Risk management and patient safety in healthcare are naturally linked, with risk management serving as a framework to proactively identify, assess, and mitigate potential hazards that could harm patients.  

Compliance plays a large role in risk management, supporting better patient outcomes by promoting safe, effective, and coordinated care. For example, implementing standardized protocols for medication reconciliation can reduce the risk of medication errors and adverse drug events.  

Protecting patient information also impacts health outcomes. The HIPAA Journal reports that research shows patients who do not believe their privacy will be protected are significantly less likely to fully participate in the diagnosis and treatment of medical conditions, negatively impacting their outcomes. 

Strategies for Risk Management 

Strategies for risk management in healthcare include conducting regular risk assessments, implementing policies and procedures to mitigate identified risks, and providing ongoing training to staff.  

EHRs play a vital role in improving patient safety and care coordination by providing a centralized repository for patient information, supporting clinical decision making, and facilitating communication among providers. Benefits include: 

• Reduced errors: EHRs can reduce medical errors by providing access to comprehensive patient information, including medication lists and allergies, as well as by issuing alerts and reminders.  

• Improved patient engagement: EHRs can facilitate patient engagement through patient portals, allowing patients to access their records, communicate with providers, and manage their care.  

• Enhanced quality of care: EHRs can support quality improvement initiatives by providing data for analysis and enabling the tracking of key performance indicators.  

Quality Reporting and Performance Tracking 

Quality reporting for medical practices is essential for demonstrating accountability, improving patient care, and maximizing reimbursement under value-based care (VBC) models.  

Metrics to measure compliance and performance often include: 

• Clinical quality measures  

• Patient satisfaction surveys 

• Optimizing data collection 

Providers can align quality reporting with VBC compliance initiatives by focusing on outcomes that are meaningful to patients and payers and by using data to drive continuous improvement.  

This includes adopting EHR systems that support accurate coding and comprehensive quality reporting, as well as implementing strategies to improve population health management and care coordination. 

Final Thoughts on Mastering Healthcare Compliance 

Mastering healthcare compliance requires a commitment to excellence across all areas of practice operations, including privacy, documentation, billing, and risk management.  

By implementing effective policies and procedures, investing in the right technology, and providing ongoing training to staff, medical practices can ensure they meet regulatory requirements, protect patient safety, and thrive in today’s complex healthcare environment.  

It is time to embrace compliance as a driver of patient trust and operational excellence. 

FAQs About Healthcare Compliance 

What’s the difference between HIPAA compliance and general healthcare compliance?

HIPAA compliance focuses specifically on protecting patient privacy and security, while general healthcare compliance encompasses a broader range of regulations related to billing, documentation, and patient safety. 

How do EHRs help with billing accuracy and audit trails?

EHRs automate coding processes, verify insurance eligibility, and track user activity, which improves billing accuracy and simplifies audit trails. 

What’s required for CMS compliance in a small practice?

CMS compliance in a small practice includes adhering to billing guidelines, participating in quality reporting programs, and meeting Meaningful Use requirements. 

How often should a medical practice update its compliance checklist?

A medical practice should update its compliance checklist at least annually or more frequently if there are significant changes to regulations or practice operations.