CMC Compliance & Regulatory Knowledge 3 — Questions and Answers
Question 1: Under the Stark Law, which of the following financial relationships between a physician and a hospital would be EXEMPT from the prohibition on referrals?
- A physician referring patients to a lab in which he has an undisclosed ownership interest
- A physician employed by the hospital at fair market value compensation (Correct answer)
- A physician receiving above-market rental payments for office space from the hospital
- A physician receiving free equipment from a hospital in exchange for referrals
Correct answer: A physician employed by the hospital at fair market value compensation
The Stark Law's bona fide employment exception permits physician-hospital employment arrangements when compensation is at fair market value and not contingent on referrals.
Question 2: The National Correct Coding Initiative (NCCI) edits are designed to prevent which type of billing abuse?
- Billing for services not rendered
- Unbundling procedures that should be billed together (Correct answer)
- Upcoding to higher-complexity E/M levels
- Submitting duplicate claims to multiple payers
Correct answer: Unbundling procedures that should be billed together
NCCI edits identify pairs of CPT codes that should not be billed together because one code's work is included in the other, preventing unbundling.
Question 3: A provider knowingly submits claims using a deceased physician's NPI number. This action most directly violates which law?
- HIPAA Privacy Rule
- The False Claims Act (Correct answer)
- The Occupational Safety and Health Act
- The Employee Retirement Income Security Act
Correct answer: The False Claims Act
Knowingly submitting false or fraudulent claims to a federal healthcare program violates the False Claims Act and can result in treble damages and per-claim penalties.
Question 4: Which CMS program uses Risk Adjustment Data Validation (RADV) audits to ensure coding accuracy?
- Traditional fee-for-service Medicare Part B
- Medicare Advantage (Part C) (Correct answer)
- Medicare Part D prescription drug plans
- Medicaid managed care for pediatric patients
Correct answer: Medicare Advantage (Part C)
CMS conducts RADV audits for Medicare Advantage plans to verify that submitted diagnosis codes are supported by medical record documentation and accurate risk scores.
Question 5: What is the statute of limitations for the government to bring a False Claims Act lawsuit if the violation was NOT known to the government?
- 3 years from the date of the violation
- 6 years from the date of the violation (Correct answer)
- 10 years from the date of the violation
- There is no statute of limitations for FCA cases
Correct answer: 6 years from the date of the violation
Under the FCA, the government has 6 years from the violation date, or 3 years from when it knew (or should have known), whichever is later, up to 10 years maximum.
Question 6: A compliance audit reveals that coders consistently assign diagnosis codes that are not fully supported by physician documentation. This is an example of:
- Upcoding (Correct answer)
- Undercoding
- Specificity failure
- Fraudulent billing
Correct answer: Upcoding
Upcoding occurs when codes representing a higher level of service or more severe condition than documented are submitted, resulting in inflated reimbursement.
Question 7: Under HIPAA's Minimum Necessary Standard, which scenario is compliant?
- A billing clerk accesses the complete psychiatric notes to verify a procedure code
- A coder accesses only the operative report needed to assign the surgical code (Correct answer)
- A receptionist views all clinical notes to confirm appointment type
- An IT technician reads patient diagnoses while performing a system upgrade
Correct answer: A coder accesses only the operative report needed to assign the surgical code
The Minimum Necessary Standard requires that access to PHI be limited to only what is needed for a specific job function, such as a coder reviewing only the relevant operative report.
CMC Compliance & Regulatory Knowledge 3
Under the Stark Law, which of the following financial relationships between a physician and a hospital would be EXEMPT from the prohibition on referrals?