Using Regulatory Guidance to Support Audit Findings

Know where to find the proof you need to support your coding, billing, or auditing.

As a medical auditor, biller, or coder, you can’t expect a physician to take kindly to you telling them how they need to document their patient encounters or why they can’t code a higher level of service. You’re going to need backup in the form of regulatory guidance.

In the HEALTHCON 2021 session “Using Regulatory Guidance to Support Audit Findings,” presenter Pam Brooks, MHA, CPC, COC, AAPC Fellow, PCS, said, “One of the things that I have found in my work is that physicians and administrators want to know ‘why do we have to do this?’ Using regulations in terms of finding information is really the best way.”

What is regulatory guidance? Brooks, a regulatory billing audit manager for MaineHealth, explains, “According to Law Insider, regulatory guidance refers to all applicable laws, rules, regulations, orders, requirements, guidance, interpretations, directives, and requests from any entity with any regulative authority.” All of which you can use to support coding, billing, or audit findings.

In Brooks’s session, in-person and remote attendees learned about various regulatory guidance she uses in her work and how she pulls her audit findings and resource information together using the diagram below as a guide. This article is a synopsis of that HEALTHCON 2021 session.

The Research Process

Brooks initiates an audit by determining what the scope is and where she might find that regulatory guidance; locating it; selecting the information that’s most pertinent to her audit findings; organizing it in a way that makes sense to the people who she’s going to report to; and then presenting it to those individuals. She tailors her information to the situation — who she is reporting to and who she is giving those audit findings to.

“If I’m giving audit findings to the coding team,” Brooks explained, “I want to have all my ducks in a row, and wear Kevlar®. But if I’m giving that executive summary or audit finding information to the executive leaders, typically they just want to know ‘what do we do and how much is it going to cost us?’” In that case, Brooks said, she’ll site her regulatory findings but not necessarily share them.

She then assesses what her findings say and how she can use that information to provide a corrective action plan.

Questionable Places to Look for Guidance

There are lots of places to look for answers to your coding/billing questions or to support your audit findings, but be “wicked” careful, Brooks warned. If you’re going to search online, look to reputable sources.

Professional medical organizations, for example, often have a lot of great information with regards to guidance for coders and billers. Their purpose is to support physician practices, however, so be wary of advice on how to enhance payment. Make sure the organization or association cites where they got their information and that it’s a reputable source.

Healthcare business forums are also great resources for information, but avoid answers that start out, “Well, in my office, we do it this way …,” Brooks cautioned. Ask for their sources and check those sources. It goes without saying (but we’ll say it anyway): Make sure those resources are current.

Also consider internal policies, which often exist to streamline processes or create billing edits that allow claims to be processed faster. “Make sure those internal policies don’t bump up against your audit or compliance audit findings,” Brooks said.

Best Places to Look for Guidance

Have you ever played the telephone game? A bunch of people stand in a circle and one person whispers a message into the ear of the person standing to their right. The next person does the same and this continues until everyone in the circle has heard the message. Usually, by the time the message makes it around the circle, it’s completely different. That’s what happens with regurgitated information and why it’s always best to reference the originating source.

Here are some of Brooks’s trusted resources:

Federal Register – The Code of Federal Regulations (CFR) is where you’ll find information related to the regulation of U.S. healthcare entities. All Centers for Medicare & Medicaid Services (CMS) rules, transmittals, change requests, and other communications reference back to Title 42 CFR Public Health.

Chapter 4, Subchapter G: Standards and Certification lays out the conditions of participation (CoP) in the Medicare program.

Chapter 5 talks about the Office of Inspector General (OIG) authorities. “These are the penalties for not doing what the other chapters tell you to do,” Brooks said. “And, although I generally don’t go into an audit and cite the OIG, it’s helpful to have that information should a provider say, ‘I don’t want to pay back what I owe’ or ‘I don’t want to do this because …’.”

Sometimes information is in more than one location, such as guidance for obtaining consent for surgical services. Brooks explained this exception further in her session.

“I find that the more egregious the finding is, the more references you might want to provide to support what your recommendations are to the organization or practice,” Brooks said.

45 CFR talks about administrative data standards, including the standardized use of ICD-10-CM and ICD-1-PCS, as well as CPT® and HCPCS Level II.

False Claims Act – Located at 31 U.S.C. §§ 3729-3733, which you can reference at

Social Security Act, Title XVIII – Health Insurance for the Aged and Disabled. In particular, Section 1848 covers payment for physicians’ services and Section 1862 covers exclusions from coverage and Medicare as secondary payer.

Medicare Physician Fee Schedule (MPFS) – This fee schedule includes pricing, relative value units (RVUs), status indicators, and payment policy indicators for services. The MPFS has a lot of information with regards to how practice expense is calculated. “This is some excellent data with regard to practice expense,” Brooks said. “One of my favorite files is the supply detailed files.” Go to and click on the year you are auditing. Download the zip file and extract the files from the compressed folder. Open the PPRRVU worksheet for the appropriate quarter and year, such as PPRRVU21_APR.xls. Here, you’ll find information such as a CPT® code’s status, bilateral indicator, indication for assistant surgeon, and anything else you may need to know about a particular code in terms of payment under the MPFS.

CMS manuals – “I recommend you look at the secondary payer manual, the program integrity manual, the prescription drug manual — there’s a lot of information in there,” Brooks said. “Based on what kind of audit you’re doing, you generally can find what you need to support your findings within the manuals.”

State regulations – Sometimes CMS guidance will tell you to check with your state for local policy such as for regulations relating to advance practice registered nursing scope of practice.

National and Local Coverage Determinations – NCDs and LCDs are “the rules of the game,” Brooks said. NCDs are published by CMS and LCDs are published by the Medicare Administrative Contractors (MACs). LCDs are typically the same as NCDs but are regional-specific and, in terms of coverage, MACs have the ability to “kind of nudge one way or the other,” Brooks said. National and Local Coverage Analyses are also viable resources that serve as “cheat sheets,” Brooks said. Search NCDs and LCDs at

CPT® and the American Medical Association (AMA) – “CPT® is regulatory guidance,” Brooks said; “the Code of Federal Regulations tells us it is.” Also look to AMA’s CPT® Assistant (subscription required) and CPT® Changes (purchase required).

ICD-10-CM – CMS and the World Health Organization maintain the diagnosis codes set and the ICD-10-CM Official Guidelines for Coding and Reporting.

AHA Coding Clinic® – This is the American Hospital Association’s subscription publication, which provides official ICD-10-CM/PCS coding advice and official guidelines, answers questions on code assignment and sequencing of codes, serves as a reference on regulatory and other requirements for reporting diagnostic and procedural information from medical records, and more.

National Correct Coding Initiative (NCCI) – “NCCI edits should be part of every audit,” Brooks said. You can run it through your encoder, but Brooks recommends that you reference back to all the chapters.

Note: Something that is statutorily excluded won’t have regulatory guidance. Best practice is to query the payer. By the way: The Medical Group Management Association determines “best practices,” Brooks said.

“Sometimes you see something that might not be best practice and there’s nothing really that is being illustrated through regulatory guidance that says ‘you can or can’t do something,’” Brooks said. If you choose to give an opinion, make sure to indicate it as such, Brooks advised. A statement such as “audit and compliance recommendations in lieu of regulatory guidance that [company] does [recommendation].”

Where You Can Learn More

Brooks provided several interesting case scenarios and tips for finding supporting regulations throughout her session. She also spent some time talking about defensive audits and how knowing where to find regulations has helped her organization to push back on these third-party audits.

Brooks will present at HEALTHCON 2022 in Washington, D.C. Don’t miss it!

Certified Professional Compliance Officer - CPCO

Watch a part of this session in the digital version of Healthcare Business Monthly, available online when logged in to your My AAPC account.

Copyright Considerations

CPT® is copyrighted by the American Medical Association. Generally, you will need permission or a license to share this information. There is, however, the Fair Use doctrine in the U.S. Copyright Statute that says it is permissible to use limited portions of a work including quotes for purposes such as commentary, criticism, news reporting, and scholarly reports. There are no legal rules permitting the use of a specific number of words, a certain number of musical notes, or percentage of a work. Whether a particular use qualifies as fair use depends on the circumstances.

Using CPT® for educational purposes is allowed, but you should properly cite CPT® and include the registered symbol. See for more information.

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