Why Quality Must Precede Compliance in Healthcare Documentation
Written by Dr. Stacey Atkins, PhD, MSW, LMSW, CPC, CIGE
Computer-Assisted Coding, better known as “CAC” has become the norm over the past decade, but are we producing compliant, accurate results? Compliance begins with quality. In the realm of clinical coding, that means ensuring that documentation tells the full story—and that the codes assigned accurately reflect that story. As CAC becomes more widespread, the need for trained human oversight becomes more critical, not less, which is the reason for this article.
Introduction
In today’s fast-paced healthcare environment, coding accuracy is often caught in the crossfire between compliance pressures, productivity demands, and evolving technology. While documentation may be clinically sound, coding associated with documentation can be misaligned or inaccurate, particularly when it is generated by CAC tools. CAC can trigger regulatory scrutiny, revenue cycle inefficiencies, and reputational risk without verification by an experienced coding first. As a compliance specialist and educator, I contend that quality cannot be compromised for speed or convenience. In fact, quality is the cornerstone of compliance.
Healthcare consultants recently noted that “documentation is often accurate, but the coding is not,” underscoring a critical gap in the way organizations approach their revenue cycle and risk management. This article explores the current landscape of coding discrepancies, the limitations and risks of CAC, and the essential need for robust internal review processes.
The Disconnect Between Documentation and Coding
In many provider organizations, clinical documentation accurately reflects the patient’s story—diagnoses, treatments, and provider decision-making—but coding processes fall short. Coders may misinterpret documentation, overlook nuances, or rely too heavily on automation, leading to miscoded encounters that can have ripple effects across billing, audit, and quality reporting systems. When errors go undetected, the result can be upcoded services, denied claims, compliance violations, and patient safety concerns. According to the Office of Inspector General (OIG), improper payments stemming from inaccurate coding continue to plague the Medicare program, costing billions annually (OIG, 2023).
CAC: A Double-Edged Sword
Computer-assisted coding (CAC) software, designed to improve speed and efficiency, is now a common fixture in health information management. While these systems can process large volumes of data quickly, their reliance on algorithms rather than clinical reasoning poses significant challenges.
Research has shown that CAC tools may struggle to interpret context, such as distinguishing between active and historical conditions, or differentiating provider impressions from definitive diagnoses (AHIMA, 2022). Without skilled human oversight, these limitations result in critical coding inaccuracies. Unfortunately, some healthcare systems mistakenly treat CAC outputs as final codes without sufficient validation.
Quality needs to be the focus to meet compliance standards. CAC should be a tool to enhance human accuracy—not replace it.
Compliance Risks from Coding Discrepancies
Coding discrepancies—particularly those uncorrected in CAC workflows—are not simply operational issues; they are compliance risks. Auditors from CMS, OIG, and commercial payers increasingly target mismatches between documentation and billing codes. These discrepancies may be flagged as potential fraud, waste, or abuse. Examples of common coding problems that trigger scrutiny include:
- Upcoding or down coding visits that do not align with documentation
- Inaccurate diagnosis coding affecting risk adjustment
- Use of unspecified or non-supported codes
- Failure to reflect clinical severity accurately
The DOJ’s increased enforcement under the False Claims Act often centers on patterns of poor coding oversight. Healthcare entities must demonstrate that they are taking proactive steps to ensure coding integrity.
Quality as a Compliance Imperative
Ensuring the integrity of clinical coding isn’t just about reimbursement—it’s about compliance, patient care quality, and data accuracy. As healthcare moves toward value-based models, accurate coding supports correct risk adjustment, patient attribution, and performance measurement.
Implementing regular coding reviews, especially of CAC-assisted encounters, is a best practice that healthcare experts recommend. These reviews should be multidisciplinary, involving coding professionals, clinicians, and compliance officers. They help:
- Identify patterns of misinterpretation or misclassification
- Provide targeted coder education and clinical documentation improvement (CDI)
- Verify whether CAC algorithms need adjustment or replacement
Quality assurance activities are not optional—they are essential to both ethical billing and regulatory compliance.
Balancing Productivity Pressures with Accuracy
It is well understood that providers are under immense pressure to manage high volumes of patients while fulfilling extensive documentation requirements. These constraints often lead to documentation fatigue and over-reliance on templated language or CAC tools. However, automation cannot replace clinical judgment or attention to detail. Coders must be trained to spot subtle inconsistencies and to understand that their role is pivotal in compliance integrity. Likewise, providers need CDI support that makes documentation more efficient and accurate—not more burdensome.
Healthcare leaders should prioritize investments in coder training, CDI collaboration, and coding audits rather than shortcutting review processes for the sake of productivity.
Recommendations for Compliance-Driven Coding Integrity
To address the systemic risks tied to coding discrepancies and CAC errors, organizations should implement the following:
- Routine Internal Coding Audits: Conduct monthly or quarterly reviews of randomly selected encounters, with particular focus on high-risk services.
- Coder & Provider Education: Offer ongoing training on documentation standards, code selection, and regulatory updates.
- Review of CAC Outputs: Routinely validate CAC-generated codes against documentation. Never treat CAC outputs as final.
- Real-Time Feedback Loops: Encourage communication between CDI specialists, coders, and providers to resolve discrepancies quickly.
- Compliance-Focused KPI Tracking: Monitor error rates, denial trends, and audit findings to identify areas needing improvement.
Conclusion
Compliance begins with quality. In the realm of clinical coding, that means ensuring that documentation tells the full story—and that the codes assigned accurately reflect that story. As CAC becomes more widespread, the need for trained human oversight becomes more critical, not less.
Automation cannot replace accountability.
Compliance leaders must treat quality assurance and coding integrity as non-negotiable pillars of risk management. Let us not allow convenience to compromise compliance. Instead, let quality lead the way.
About the Author
Dr. Stacey R. Atkins, PhD, MSW, LMSW, CPC, CIGE
Dr. Adkins is a Compliance Specialist working as a team member in the Education Department of the American Institute of Healthcare Compliance. Her career spans leadership roles with the Office of the State Inspector General, Department of Behavioral Health and Developmental Services, and HRSA, among others.
References
- American Health Information Management Association (AHIMA). (2022). The Realities of Computer-Assisted Coding. Retrieved from https://www.ahima.org
- Office of Inspector General (OIG). (2023). Medicare Improper Payment Reports. Retrieved from https://oig.hhs.gov
- Centers for Medicare & Medicaid Services (CMS). (2024). Evaluation and Management Services Guide. Retrieved from https://www.cms.gov
- U.S. Department of Justice. (2023). False Claims Act Settlements and Judgments Exceed $2 Billion in Fiscal Year 2023. Retrieved from https://www.justice.gov/opa/pr
Copyright © 2025 American Institute of Healthcare Compliance All Rights Reserved
The post Coding Integrity and CAC appeared first on American Institute of Healthcare Compliance.
