Protecting Provider Integrity: Why Outdated Audit Data Threatens Modern Healthcare Compliance

By Slava Kurdov, Billing Department, WCH

The healthcare billing landscape operates under constant scrutiny, but when oversight mechanisms rely on obsolete data to draw sweeping conclusions about current practices, the entire system suffers. Recent developments involving Office of Inspector General (OIG) reports targeting specific provider specialties highlight a critical vulnerability in how compliance is evaluated—and why billing companies must understand these dynamics to protect their provider clients.

The Problem with Retrospective Analysis

The American Podiatric Medical Association (APMA) recently raised significant concerns about OIG reports examining podiatrists’ claims for evaluation and management (E/M) services billed with modifier -25 and routine foot care services. The core issue extends far beyond a single specialty: these reports analyzed 2019 data to make recommendations about compliance measures in 2024 and beyond—a gap that spans transformative changes in healthcare delivery and documentation standards.
This five-year lag creates a fundamental disconnect. The healthcare industry experienced seismic shifts between 2019 and today, including the implementation of revised E/M guidelines in 2021 that fundamentally restructured how services are documented and billed. Applying conclusions drawn from pre-reform data to current practices creates a compliance framework built on an outdated foundation.

Understanding the E/M Documentation Revolution

The 2021 E/M coding changes represented the most significant revision to these codes in decades. The Centers for Medicare & Medicaid Services (CMS) eliminated previous documentation requirements tied to history and examination, instead allowing physicians to select visit levels based primarily on medical decision-making or total time spent on the date of encounter.
For billing companies and providers, this shift fundamentally altered compliance benchmarks. Documentation practices that were standard in 2019 would be considered excessive under 2021 guidelines, while approaches that meet current standards might have appeared deficient under previous rules. Evaluating 2019 claims through a contemporary lens—or worse, making forward-looking compliance recommendations based on that outdated data—creates a distorted picture of actual provider behavior.

The Modifier -25 Complexity

Modifier -25 indicates that a separately identifiable E/M service was performed on the same day as a procedure or other service. It’s among the most scrutinized modifiers in healthcare billing because it represents additional reimbursement beyond the procedure code’s inherent work value.
The OIG reports in question raised concerns about the frequency with which certain providers billed modifier -25 with E/M services. However, appropriate use of this modifier depends heavily on the clinical circumstances and documentation standards in effect at the time of service—both factors that have evolved substantially since 2019.
For specialized practices, modifier -25 usage often reflects the clinical reality that patients presenting for procedures frequently require evaluation of new or worsening conditions. A patient scheduled for a routine procedure may present with acute symptoms requiring separate assessment. The legitimacy of modifier -25 billing hinges on whether the E/M service is significantly and separately identifiable from the procedure—a determination that requires understanding both the clinical context and the documentation guidelines that were operative when services were rendered.

The Routine Foot Care Conundrum

The OIG reports also addressed routine foot care services, which occupy a particularly complex space in Medicare coverage policy. Routine foot care is generally non-covered for most Medicare beneficiaries unless they have specific systemic conditions that make such care medically necessary.
Compliance in this area requires providers to carefully document qualifying conditions and understand the nuances of coverage policy. However, those policies have been refined and clarified over the years through Medicare Administrative Contractor (MAC) guidance, CMS transmittals, and evolving clinical guidelines. Evaluating 2019 claims without accounting for how coverage interpretations and documentation expectations have evolved creates an incomplete assessment of current compliance.

Implications for Billing Companies and Providers

For billing companies serving healthcare providers, these developments underscore several critical considerations:
Data Currency Matters in Audits: When facing audits or external reviews, the vintage of data being examined should be a central consideration. Billing companies should be prepared to contextualize findings within the regulatory and guideline environment that existed when services were rendered, not current standards.
Specialty-Specific Vulnerabilities: Different specialties face different risk profiles based on their typical service mix and coding patterns. Understanding which services and modifiers trigger scrutiny in specific specialties allows billing companies to implement targeted compliance measures rather than generic approaches.
Documentation Evolution Requires Ongoing Education: The shift in E/M guidelines illustrates how dramatically documentation requirements can change. Billing companies must ensure providers receive timely education about guideline changes and understand how those changes affect both current billing and the interpretation of historical claims data.
Advocacy and Transparency: The APMA’s response demonstrates the importance of professional advocacy when oversight mechanisms produce misleading conclusions. Billing companies should work with provider specialty organizations and be prepared to advocate for fair evaluation of claims data when audits or reviews fail to account for relevant context.

The Call for Transparent Oversight

The APMA’s request that CMS and MACs ensure any additional oversight or educational efforts are “transparent and supported by clear guidelines” that “recognize and accommodate the clinical realities of patient care” reflects a broader need in healthcare compliance: oversight mechanisms must be grounded in an accurate, current understanding of how care is delivered and documented.

For billing companies, this translates to several operational imperatives:

• Maintain detailed records of applicable guidelines and coverage policies at the time services were rendered
• Document the rationale for billing decisions with reference to contemporary guidance
• Establish systems for tracking regulatory changes and their effective dates
• Develop specialty-specific compliance protocols that reflect actual clinical workflows

Building Resilient Compliance Programs

The controversy surrounding these OIG reports offers valuable lessons for developing compliance programs that can withstand scrutiny:
Contemporaneous Documentation: The best defense against retrospective audit findings is documentation that clearly establishes medical necessity and billing appropriateness at the time of service. Billing companies should implement protocols that ensure providers document the specific factors supporting their coding decisions.
Regular Compliance Audits: Internal audits using current guidelines help identify potential issues before they attract external scrutiny. However, these audits should also periodically review how historical claims would be evaluated under both past and present standards to identify areas of vulnerability.
Provider Education Programs: Continuous education ensures providers understand not just what to document, but why specific documentation elements support compliant billing. When providers understand the connection between clinical decision-making, documentation, and coding, compliance becomes integrated into care delivery rather than an afterthought.
Relationship Management with Payers: Maintaining open lines of communication with MACs and commercial payers helps billing companies stay informed about emerging areas of focus and clarify ambiguous coverage policies before they become compliance issues.

The Broader Context

The situation facing podiatrists reflects a systemic challenge in healthcare oversight: balancing the need for fraud prevention and program integrity with fair evaluation of provider practices. When oversight mechanisms rely on outdated data or fail to account for the complexity of clinical care, they risk creating compliance burdens that don’t meaningfully improve care quality or reduce improper payments.
For the billing industry, these developments reinforce the importance of staying informed about not just current regulations, but how those regulations have evolved and how oversight bodies interpret historical compliance. The gap between when services are rendered and when they’re audited can span years, creating situations where providers face scrutiny based on standards that didn’t exist when care was delivered.

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As the healthcare industry continues evolving—with ongoing changes to documentation requirements, coverage policies, and payment models—the need for oversight mechanisms that accurately reflect current practices becomes increasingly critical. Billing companies serve a vital role in this ecosystem, translating complex regulatory requirements into operational workflows and defending providers against compliance conclusions that don’t accurately reflect the care they deliver.
The APMA’s vigorous response to these OIG reports demonstrates what’s possible when professional organizations advocate for their members based on an accurate understanding of clinical practice and regulatory context. Billing companies can learn from this approach, developing their own advocacy capabilities and building relationships with providers based on partnership in navigating the compliance landscape.
Ultimately, effective healthcare compliance requires oversight mechanisms that are transparent, timely, and grounded in an accurate understanding of how care is delivered and documented. When those mechanisms fall short, the responsibility falls to billing professionals and provider advocates to ensure the record is set straight—not just for individual specialties, but for the integrity of the entire healthcare system.

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Sources

1. American Podiatric Medical Association. (2024). “APMA Statement on OIG Reports Regarding Podiatric Services.” APMA.org.
2. Centers for Medicare & Medicaid Services. (2021). “Evaluation and Management Services Guide.” CMS.gov.
3. Office of Inspector General, U.S. Department of Health and Human Services. (2024). “Audit Reports on Podiatric Services.” OIG.HHS.gov.
4. Centers for Medicare & Medicaid Services. (2023). “Medicare Claims Processing Manual, Chapter 12 – Physicians/Nonphysician Practitioners.” CMS.gov.
5. American Medical Association. (2021). “CPT Evaluation and Management (E/M) Office or Other Outpatient (99202-99215) and Prolonged Services (99354, 99355, 99356, 99417) Code and Guideline Changes.” AMA-assn.org.
6. Department of Health and Human Services. (2019-2024). “Medicare Learning Network Publications on Modifier -25.” Medicare.gov.
7. National Government Services. (2023). “Routine Foot Care and Debridement of Nails.” NGS Medicare.com.