Internal Controls & Fraud Prevention Flashcards

A physician upcodes a 99213 office visit to a 99215 to increase reimbursement. Under the False Claims Act, this is most accurately classified as:

Answer: Fraud

Intentional upcoding to obtain higher reimbursement meets the FCA definition of fraud because it involves a knowing false claim.

Which document formally defines the scope, objectives, and approach of an internal audit engagement?

Answer: Engagement letter

The engagement letter (or audit plan) formally establishes the scope, objectives, timing, and methodology before fieldwork begins.

A radiology technician steals cash co-payments before they are recorded. Which control would most directly prevent this?

Answer: Mandatory pre-numbered receipt issuance at point of collection

Pre-numbered receipts issued at the point of collection create an audit trail that makes skimming immediately detectable.

Under the Sarbanes-Oxley Act Section 302, which individuals must certify the accuracy of financial reports for publicly traded healthcare entities?

Answer: Chief Executive Officer and Chief Financial Officer

SOX Section 302 requires the CEO and CFO to personally certify the accuracy of financial statements and the effectiveness of disclosure controls.

In healthcare, 'credential padding' in provider enrollment refers to:

Answer: Falsely claiming board certifications to enroll as a specialist

Credential padding involves falsely listing certifications or training during enrollment to qualify for higher reimbursement rates.

A healthcare organization's compliance hotline received an anonymous tip about billing irregularities. The compliance officer's first step should be:

Answer: Conduct a preliminary assessment to determine if a formal investigation is warranted

A preliminary assessment establishes whether the allegation has merit before committing resources to a full investigation or taking adverse actions.

Which ratio is most useful for detecting potential billing fraud in a physician practice by comparing it to specialty benchmarks?

Answer: E/M code distribution (coding bell curve)

The E/M coding bell curve shows whether a provider's code-level distribution is an outlier compared to peers in the same specialty.