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Medical Billing Guidelines

The following is an excerpt from the Human & Health Services – Guidelines for 3rd Part Medical Billing Companies

Program Guidance for Third-Party Medical Billing Companies

Office of Inspector General
Publication of the OIG Compliance

AGENCY: Office of Inspector General
ACTION: Notice.

1. Introduction
A. Benefits of a Compliance Program
B. Application of Compliance Program Guidance
II. Compliance Program Elements
A. Written Policies and Procedures – Part I | Part II
B. Designation of a Compliance Officer and a Compliance Committee
C. Conducting Effective Training and Education
D. Developing Effective Lines of Communication
E. Enforcing Standards Through Well-Publicized Disciplinary Guidelines
F. Auditing and Monitoring
G. Responding to Detected Offenses and Developing Corrective Action Initiatives
III. Conclusion


This Federal Register notice sets forth the recently issued Compliance Program Guidance for Third-Party Medical Billing Companies developed by the Office of Inspector General (OIG) in cooperation with, and with input from, the Health Care Financing Administration, the Department of Justice and representatives of various trade associations and health care practice groups. The OIG has previously developed and published compliance program guidance focused on the clinical laboratory and hospital industries and on home health agencies. We believe that the development and issuance of this compliance program guidance for third-party medical billing companies will serve as a positive step towards promoting a higher level of ethical and lawful conduct throughout the entire health care industry.


Susan Lemanski, Office of Counsel to the Inspector General, (202) 619–2078


The creation of compliance program guidance remains a major effort by the OIG in its effort to engage the health care community in combating fraud and abuse. In formulating compliance guidance, the OIG has worked closely with the Health Care Financing Administration (HCFA), the Department of Justice (DOJ) and various sectors of the health care industry to provide clear guidance to those segments of the industry that are interested in reducing fraud and abuse within their organizations. The 3 previously-issued compliance program guidances were focused on the hospital industry, home health agencies clinical laboratories, and were published in the Federal Register on February 23, 1998 (63 FR 8987), August 7, 1998 (63 FR 42410) and August 24, 1998 (63 FR 45076) ,respectively. The development of these types of compliance program guidance is based on our belief that a health care provider can use internal controls to more efficiently monitor adherence to applicable statutes, regulations and program requirements.
Elements for an Effective Compliance Program

Through experience, the OIG has identified 7 fundamental elements to an effective compliance program. They are:

• Implementing written policies, procedures and standards of conduct;
• Designating a compliance officer and compliance committee;
• Conducting effective training and education;
• Developing effective lines of communication;
• Enforcing standards through well-publicized disciplinary guidelines;
• Conducting internal monitoring and auditing; and
• Responding promptly to detected offenses and developing corrective action.

Third-Party Medical Billing Companies

Increasingly, third-party medical billing companies are providing crucial services that could greatly impact the solvency and stability of the Medicare Trust Fund. Health care providers are relying on these billing companies to a greater degree in assisting them in processing claims in accordance with applicable statutes and regulations. Additionally, health care professionals are consulting with billing companies to provide timely and accurate advice with regard to reimbursement matters, as well as overall business decision making. As a result, the OIG considers compliance program guidance to third party medical billing companies particularly important in efforts to combat health care fraud and abuse.

Further, because individual billing companies may support a variety of providers with different specialties, we recommend that billing companies coordinate with their provider-clients in establishing compliance responsibilities. Using these 7 basic elements outlined above, the OIG has identified specific areas of third-party medical billing company operations that may prove to be vulnerable to fraud and abuse.
Like previously-issued OIG compliance guidances, adoption of the Compliance Program Guidance for Third-Party Medical Billing Companies set forth below will be strictly voluntary. A reprint of this compliance program guidance follows:

Office of Inspector General’s Compliance Program Guidance for Third-Party Medical Billing Companies