Practice Plan Compliance Monitoring

Title: Practice Plan Compliance Monitoring
Standard #:


Issued: 12/01/1997 Reviewed/Revision Date: 08/21/2000, 11/18/2003, 10/06/2005, 11/21/2008, 01/01/2011



The objective of the standard is to ensure that all procedural and diagnosis code assignment, supervision requirements, medical record supporting documentation and fee abstraction performed by USC Care Medical Group, Inc., and its physician practice plans conform to the USC Compliance Standards & Procedures. This is accomplished through regular monitoring as defined in this standard.


Each School/Practice Plan along with the individual healthcare provider will assume responsibility for the monitoring and quality assurance of their billing practices.

Monitoring of new providers must begin within 90 days of their participation in private practice. If a provider after 90 days is unable to begin their monitoring process due to a low volume of encounters, it is the responsibility of the School/Practice Plan to contact the Office of Culture, Ethics and Compliance so that this provider can be documented as low volume. The provider’s low volume status will be reviewed every three months by the practice plan until they generate sufficient practice activity to be monitored.

Each provider is required to successfully complete the monitoring process prior to each re-appointment, unless the provider is eligible for low volume provider status.


Under the direction of the USC Office of Culture, Ethics and Compliance, the Practice Plan monitoring may be conducted according to one of the following models.

  1. Third-party consultant external to the School/Practice Plan
    • In order to maintain consistency throughout the practices, the Office of Culture, Ethics and Compliance must approve the third party consultant and the consultant must be engaged under the approved vendor monitoring agreement (Attachment A). This document is executed between the Practice Plan, Office of Culture, Ethics and Compliance and the Office of the General Counsel or
  2. Use of appropriately qualified individual within the practice plan who is independent of the elements, which are being monitored. The monitor should be independent of items under quality assurance review. The designated monitor or monitors must follow all protocols described within this standard and should report directly to the practice plan senior management and the USC Office of Culture, Ethics and Compliance in connection with implementation of and compliance with the compliance program.

Under either procedure:

  1. The monitor providing monitoring services must comply with Standard CO-110 (Requirements for Certified Coder Monitors).
  2. The Monitor must represent and warrant that through the Certified Coder Monitor Vendor Agreement, or through their employment agreement that the Monitor can and will perform the monitoring services in accordance with the terms set forth in this standard.
  3. An external auditor of the USC Office of Culture, Ethics and Compliance shall conduct an audit of the process of the monitoring system in place on a periodic basis.


  1. Components
    • The Monitor will review the following elements pertaining to the billing practice.
      1. Accuracy of date-of-service billed;
      2. Appropriateness of billing vs. performing provider;
      3. Accuracy of diagnosis or ICD-9-CM diagnosis code assigned;
      4. Accuracy of CPT procedural code assigned;
      5. Accuracy of Place of Service Code
      6. Proper utilization of modifiers;
      7. Appropriateness of the medical record supporting documentation (including teaching physician requirements)
      8. Contractor specific directives obtained through written carrier memos and transmittals.
      9. Additional aspects of the 1996 Medicare Final Rule on Teaching Physicians including Transmittal 1780 released on November 22, 2002.
  2. Sample Selection Methodology
    • The practice plan will utilize the Compliance Billing Monitoring Reports (Attachment B) to profile the scope of practice for each provider.  These reports include:
      1. Billing provider
      2. Location of services;
      3. Frequency of diagnosis code(s) utilized;
      4. CPT code(s) assigned;
      5. Summary information of CPT frequency
      6. Modifier(s) assigned
    • To determine an appropriate sample to monitor, the CPC will analyze the data found in (1) the above reports, (2) a current Departmental Profile (Attachment C), (3) a current Individual Practitioner Profile (Attachment D). This allows the monitor to determine the high risk, high volume areas that are appropriate for monitoring.  In addition, the monitor will take historic errors into consideration when constructing a sample.Monitoring may be done retrospectively or prospectively, however all samples must capture the risks identified through the process described above.
  3. Monitoring Process
    • The Monitor will conduct a comprehensive review of the pre-audit profile, the service analysis reports, the OIG Work plan, the high risk areas/codes, etc.
    • The Monitor will determine the CPT codes to be reviewed based on the risk areas described above. The codes chosen by the monitor will be sent to the Department or Office of Culture, Ethics and Compliance (if the department has requested assistance from the Office of Culture, Ethics and Compliance).
    • The Department or Office of Culture, Ethics and Compliance will generate a detailed report of services requested by the monitors selection which is based on the risk profile established based on the information collected above.  The report will be password protected.  The data elements will include Provider Name, MRN, DOS, CPT, Units, Location of Service, Financial Class, and Invoice Number.
    • The Monitor will select ten invoices for review and email the password protected list to the Department Compliance Administrator.
    • The Department Compliance Administrator will pull the supporting documentation for the 10 charts chosen by the Monitor and provide copies to the Monitor for review. The supporting documentation will include but not limited to:
      1. CMS 1500 form or a copy of the IDX billing ledger;
      2. Charge slip completed by practitioner;
      3. Encounter notes written and/or dictated by practitioner;
      4. Operative note written and/or dictated by practitioner, fellow and/or resident, if applicable;
      5. Nursing notes for any immunizations and/or therapeutic injections provided during the encounter;
      6. Review of Systems questionnaires completed by the patient and reviewed by the practitioner; and,
      7. Diagnostic testing results for services ordered and provided during the encounter (i.e., EKG, audiogram, nerve conduction study, etc.)
    • The Monitor will receive the documents sent by the department and keep a log to track the documents received. The Monitor will review the documents and complete the USC Chart Review Worksheet (Attachment E) or other appropriate scoring tool designed by Monitor for the encounters chosen for review.  If multiple dates of service are billed on the same submission date, only those services on the encounter date will be audited.The Monitor will complete the appropriate information on the Chart Review Worksheet (each encounter to be completed individually and completely prior to advancing to another encounter). The Monitor will pay particular attention to determining if any inconsistencies exist between dates-of-service, billing and performing physicians/providers, inappropriate modifiers, accuracy of ICD-9 codes, compliance with teaching physician physical presence rules and incorrectness of place of service.  Any variation will be indicated on the Chart Review Worksheet. The physician/provider will be advised of changes needed.In the event that a Monitor identifies that service was improperly billed, the Monitor will recommend a new code and indicate in the “comments” section the justification for the recommended change. The Monitor will assess the appropriateness of the medical record supporting documentation for the services performed, the codes assigned and supervision in a teaching scenario. Any inadequacy determined will be noted and explained in the “comments” section.
  4. Document Review
    • The Monitor will review the documentation submitted for each encounter selected for monitoring. Elements for review include but are not limited to:
      1. Date-of-service billed;
      2. Date-of-service performed;
      3. Billing provider;
      4. Performing provider;
      5. ICD-9-CM diagnosis code assigned;
      6. ICD-9-CM diagnosis code billed;
      7. ICD-9-CM diagnosis code recommended (if different from assigned & billed);
      8. CPT procedural code assigned;
      9. CPT procedural code billed;
      10. CPT procedural code recommended (if different from assigned & billed)
      11. Modifiers utilized (if appropriate);
      12. Medical record supporting documentation; and
      13. Teaching physician regulations.
      14. Legibility
      15. Place of Service Code
    • The clinical documentation is reviewed for the accuracy and appropriateness of the aforementioned categories.The monitors will utilize the USC Chart Review Worksheet or a similar document and the exclusively the USC Monitoring Summary Report.
  5. Scoring Process
    • Once the monitor has completed the Chart Review Worksheet for each of the 10 encounters reviewed, the monitor will complete the USC Monitoring Summary Report (Attachment F), which scores the results of the Chart Review Worksheet.  Results will be documented and scored according to the Scoring Methodology (Attachment G).
    • A score of 90% or above is considered passing.For trending and educational purposes, the Monitor shall determine a Finding Code for each of the 10 encounters reviewed as defined by (Attachment H) and post the finding code to the USC Monitoring Summary Report.
    • The Monitor will date the USC Monitoring Summary Report and send to the Department Administrator with a cc: to the USC Office of Culture, Ethics and Compliance.
    • Once the audit results are finalized, the Monitor will return all documents, the USC Chart Review Worksheets and the USC Monitoring Summary Report to the Department Administrator. The Department Administrator will determine if any other documents should be returned and notify the Monitor of same.
    • The Department will keep all documentation.
    • The Monitor will identify the components of the medical record which correspond to the insufficient, inappropriate or inaccurate documentation indicated.  These documents will be kept with the Chart Review Worksheets and the Monitoring Summary Report.
  6. Post Monitoring Education:
    • If there are any findings (less than 100% audit score), the Monitor must schedule an education session with the practitioner to review the findings and provide education based on the area(s) of deficiency.


Monitoring is intended to be an educational experience for the provider.  Monitors will review results with providers.  A provider may appeal a decision made by a Monitor (e.g. assigning a different CPT procedural code based upon medical record documentation), however, ultimate discretion rests with the USC Office of Culture, Ethics and Compliance.


Although each practice plan shall have a process to implement this standard the following procedural steps shall be followed to monitor the faculty and non-physician providers.

  1. The School/Practice Plan shall arrange to review ten (10) encounters of service for each provider employed or engaged by the School/Practice Plan. For new providers this monitoring will begin as described under section II (Responsibility) of this standard.  Additionally, all monitoring must be completed prior to each reappointment.
  2. Upon failure of the first round of monitoring a provider must be re-monitored within 90 days.  The Practice Plan will coordinate with the monitor a review of another ten (10) randomly selected encounters of service for those faculty physicians and non-physician providers who did not pass the first review.
  3. For physicians and non-physician providers who fail their second review the Practice Plan will arrange to review another 10 randomly selected encounters, within sixty (60) days. The Practice Plan will coordinate with the monitor a review of another ten (10) randomly selected encounters of service for those faculty physicians and non-physician providers who did not pass the second review.
  4. Upon failure of the third review process as set forth in # 4, the practice plan will notify the USC Office of Culture, Ethics and Compliance.  For a 30 day period, every encounter billed by the non-compliant faculty member shall be reviewed by the Practice Plan’s monitor before it is billed to determine if the documentation supports the proposed charges.  This is defined as concurrent monitoring.  Ongoing education will be provided to the faculty member as encounters are reviewed. The provider will remain on concurrent monitoring until compliance has been achieved at the rate of 90%. Release from concurrent monitoring must be approved by the practice plan’s Compliance Liaison and the USC Office of Culture, Ethics and Compliance.

However, if the provider has not successfully completed his/her monitoring at the time of their reappointment, the provider will have their billing privileges suspended until such time as they demonstrate proficiency in the areas that they were found to be deficient at the time of monitoring.

If a provider demonstrate a significant error rate or a consistent pattern of errors, as determined by the USC Office of Culture, Ethics and Compliance, the USC Office of Culture, Ethics and Compliance may require at provider practice plan expense a more focused review and participation in additional education and training sessions (i.e., either an increase in the number of encounters reviewed or the frequency of the quality assurance review). The USC Office of Culture, Ethics and Compliance in conjunction with the Office of the General Counsel and the Practice Plans may require other remedial action steps (to be determined by the USC Compliance Office and the practice plan) depending upon the severity and frequency of the errors.


In the event that a retrospective review has been conducted, the School/Practice Plan will calculate the monetary effect of the changes, if any, to the codes billed and recommended and those services which were categorically denied based on clinical review. A variation will be calculated for each service and for the total of all services. The School/Practice Plans will refund within a payor as appropriate within 30 days and submit a corrected claim.


The respective Practice Plan will house the completed Chart Review Worksheets and the Monitoring Summary Report within the Practice Plan for a period of seven years. Offsite storage can be utilized for the documents.


The USC Office of Culture, Ethics and Compliance will randomly request provider specific Chart Review Worksheets, the Monitoring Summary Report and all supporting documentation to be submitted to the USC Office of Culture, Ethics and Compliance for secondary review.  Practice Plans must comply with such requests within five (5) business days.


On a semi-annual basis or upon request, the Office of Culture, Ethics and Compliance shall prepare for the Compliance Liaison and the Practice Administrator, a Departmental Cumulative Report which will summarize departmental errors, and trend finding codes (Attachment I). 


USC Practice Plans will file a Corrective Action Plan as necessary to trend monitoring deficiencies. USC Practice Plans will also implement Disciplinary Plans as appropriate.


Attachment A – Compliance Monitoring Agreement

Attachment B – Sample Billing Monitoring Reports

Attachment C – Departmental Profile for Billing Monitoring

Attachment D – Practitioner Sampling Profile

Attachment E – Chart Review Worksheet

Attachment F – Monitoring Summary Report

Attachment G – Scoring Methodology

Attachment H – Finding Codes and Score Sheet

Attachment I – Cumulative Reports