Coding and Compliance Review: Healthcare M&A

Blog / Beyond Diligence: Coding & Compliance Reviews’ Cultural Benefits

In the wake of a groundbreaking year for healthcare mergers and acquisitions (M&A), a pivotal aspect of due diligence is emerging as a linchpin for success – the meticulous examination of coding practices and compliance adherence. This foundational step not only safeguards the investment but also sets the stage for long-term cultural transformations that can ripple through the organization.

Amid the labyrinthine landscape of healthcare regulations and the ever-watchful eye of regulatory bodies like the Centers for Medicare and Medicaid Services and the Office of Investigative General, the repercussions of unaddressed issues in coding and compliance can be highly capricious. The unforeseen nature of these risks makes it arduous to recalibrate the deal’s financial terms as it hurtles towards closure.

Consequently, it’s imperative for acquirers to weave a comprehensive coding and compliance review into the fabric of their due diligence, preempting pitfalls before embarking on the voyage of a quality of earnings assessment.

Within the complex tapestry of coding and compliance evaluations, five pivotal realms demand a spotlight, as illuminated by our adept team at LBMC, in the context of healthcare provider transactions:

1. Unveiling High-Risk Coding Patterns

Embarking on a comprehensive process and analytics review unveils the intricate tapestry of high-risk coding patterns. In this dynamic landscape, these patterns act as more than mere indicators – they serve as a compass, guiding experts towards critical areas necessitating heightened scrutiny. The identification of these potential vulnerabilities isn’t just about risk assessment; it’s about focusing resources where they are most needed, fostering a strategic approach that sets the tone for an airtight foundation.

2. Illuminating "Incident To" Billing Patterns

The lens of billing patterns reveals an entire ecosystem deserving of meticulous exploration – the realm of “incident to” billing. This intricate web encompasses scenarios where mid-level providers contribute to care plans crafted by overseeing physicians. Yet, the true essence lies in the minutiae – adherence to complex regulatory frameworks and unwavering dedication to meticulous documentation. These elements aren’t merely checkmarks; they are the cornerstones of legitimate billing practices, preserving the integrity of billing at the full physician rate and underscoring a commitment to uncompromising professionalism.

3. Cultivating a Culture of Compliance

Beyond the tangible checklists lies an intangible yet potent facet of this review – the cultivation of a culture of compliance. More than a surface-level endeavor, this pillar delves into the essence of an organization’s ethos. It examines whether compliance is etched into the organization’s DNA, shaping behavior beyond the confines of regulations. Is the commitment to compliance embedded in the very fabric of the organization, transcending the superficial, and embracing a genuine commitment to ethical practice?

4. Sculpting Compliance Through Chart Reviews

The meticulous scrutiny of charts unveils a realm of compliance intricacies, offering a panoramic view of an organization’s adherence to best practices. In this intricate dance, each chart embodies a narrative of care, collaboration, and adherence to regulatory protocols. The comprehensive 10-chart review per physician and mid-level provider offers more than a snapshot – it forms a composite compliance score, one that captures the collective efforts of not only physicians but also nurse practitioners and physician assistants. The selection process for these charts isn’t just arbitrary; it’s guided by a strategic assessment of risk, ensuring that every layer is examined in the pursuit of a robust compliance framework.

5. Unveiling Financial Ramifications

As the layers of compliance intricacies are delicately peeled back, a revelation emerges – a revelation of potential financial ramifications tied to over-coding or under-coding. This isn’t just about uncovering issues; it’s about paving the path to equitable terms. The insights derived from this process shape the very fabric of the deal, ensuring that adjustments are made at the crucial juncture of closure. It’s a testament to the dedication to transparency and fairness, affirming that every financial aspect aligns harmoniously with the organization’s commitment to compliance excellence.

Yet, this endeavor extends beyond the immediate transactional horizon. A meticulous coding and compliance review bestows gifts that transcend the confines of the deal. Beyond the realms of financial protection, the gathered insights become the foundation for a roadmap to bolster the ethos of compliance. Educational initiatives kindled for physicians and mid-level practitioners, arising from these insights, forge a shield against future tribulations.

In the epoch of healthcare M&A’s meteoric rise, the spotlight on coding and compliance transcends conventional due diligence. It ushers in a transformative cultural paradigm, safeguarding investments, and radiating enduring benefits.

Andrew McDonald, FACHE is a Shareholder and Practice Leader for Healthcare Consulting and LBMC Physician Business Solutions, LLC. He can be contacted at amcdonald@lbmc.com or 615-309-2474.