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Compliance in the Dental Office or Small Practice

Christine Woolstenhulme, QCC, QMCS, CPC, CMRS

If your practice does not already have a compliance program in place, you will want to get started after reading this article. We have uncovered some important findings with the Office of Inspector General (OIG) in dental practices you need to be aware of. A compliance program offers standard procedures to follow, ensuring practice standards, such as internal auditing, training, how to respond to an offense, and how to enforce disciplinary standards to avoid waste, fraud, and abuse. 

This article will look at dental providers since documentation, medical necessity, and medical coding are fairly new in the dentistry field. However, a compliance program should be maintained in all practices, medical and dental.

Is a Compliance Program Mandatory?

A compliance program is not mandatory, but even the existence and effort put into a compliance program will help lessen the action taken should it arise; this is what the Office of Inspector General (OIG) stated regarding compliance for third-party medical billing companies; "While compliance with the guidelines is strictly voluntary, the existence of an effective compliance program could mitigate any action taken against a billing company caught in subsequent wrongdoing." In an OIG news release, it was stated, "The OIG has articulated to the health care industry that the existence of an effective compliance program will be considered when determining the nature and level of administrative sanctions, penalties, and exclusions to be imposed against a company."    

What Does a Compliance Program Look like?

A compliance program must have written and maintained policies and procedures regarding the operations of the compliance program. Education, training, and re-training will play a significant part in a reliable compliance program.

According to the Federal Register;

The seven core elements below provide a solid basis upon which your practice can create a voluntary compliance program:

     1. Conducting internal monitoring and auditing;

     2. Implementing compliance and practice standards;

     3. Designating a compliance officer or contact;

     4. Conducting appropriate training and education;

     5. Responding appropriately to detected offenses and developing corrective action;

     6. Developing open lines of communication; and

     7. Enforcing disciplinary standards through well-publicized guidelines.

Does the Size of my Practice Matter?

The size of your practice is significant; a smaller solo provider may not have the resources or means to incorporate a comprehensive compliance program as a larger practice may have. The OIG mentions not all practices will be able to implement all of the components mentioned above.

Where to Start

Do a self-audit, then begin by focusing your training on areas of identified risk. It is okay if you are not able to implement a full compliance program right away. Just get started. 

Knowing the Difference Between ‘‘Erroneous’’ and ‘‘Fraudulent’’ Claims 

The Federal Register states, "All health care providers have a duty to reasonably ensure that the claims submitted to Medicare and other Federal health care programs are true and accurate." That being said, it is vital to understand how the government views erroneous vs. fraudulent claims.  

  • Erroneous claims are innocent billing errors and are not subject to civil penalties or jail. According to the OIG, "Physicians are not subject to criminal, civil or administrative penalties for innocent errors, or even negligence."
  • Fraudulent claims are considered intentionally or recklessly false and fall under "The False Claims Act." These are "offenses that are committed with actual knowledge of the falsity of the claim, reckless disregard, or deliberate ignorance of the falsity of the claim."

Documentation and Medical Necessity

Documentation to support medical necessity is key with patient care and will help prevent billing errors. Documentation must include the extent of the services and the specific disease or condition present that required the treatment and support CDT or medical codes. If your dental office is not currently using ICD-10-CM Diagnosis Codes, this is the time to start. Always document the disease or condition; this is the reason for treatment.

According to the American Academy of Pediatric Dentistry, you must document the diagnosis and not just the treatment. This means referring to laboratory reports, radiographs, and any other diagnostic studies. Additionally, supporting medical necessity may require you to:

  • Document not only the treatment but also the specific disease or condition that made the treatment necessary; and
  • Document the disease on the tooth chart, surface by surface, as determined by visual or tactile clinical examination or by X-ray.

According to the ADA News, Dr. Allen Finkelstein, D.D.S states the following;

Questions that should be addressed in the documentation include:

  • Is the procedure necessary for the patient's condition?
  • Does the record contain all supporting documentation for diagnosis and treatment?
  • When multiple treatments are provided, are all the treatments/procedures documented individually?
  • Are the records signed by the individual provider?
  • Are there contraindications concerning the care or procedures performed within the documentation, and are they adequately justified?

SOAP Notes

A common method of documentation in the medical field is the use of SOAP notes. SOAP notes are a structured way to document in a medical record and recognized by most all payers. 

  • Subjective - Information in the patient's own words, the reason for being seen
  • Objective -  Information collected from exam, tests, X-Rays
  • Assessment - Providers assessment of the condition
  • Plan - The plan to manage the problem

Lessons learned from OIG Reports


"We did not determine Medicare compliance for 3 dental services because the payments were refunded before our audit work."

Understand Policy Requirements

"Medicare contractors in our audits improperly paid providers an estimated $9.8 million for hospital outpatient dental services that did not comply with Medicare requirements".

I'm getting paid; I Must be Billing Correctly!

"We determined that New York may have improperly claimed reimbursement for dental services totaling $1.3 million ($670,000 Federal share). Of these, 712 claims, totaling $66,000 ($34,000 Federal share), were for Medicaid fee-for-service dental services and 6,938 claims, totaling $1.3 million ($635,000 Federal share), were for clinic dental services. 

This occurred because New York’s Medicaid claims reimbursement system did not always prevent the reimbursement of certain fee-for-service dental claims for beneficiaries residing at nursing facilities and residential treatment centers." 

Quality of Care or Medical Necessity Issues

"All Smiles was part of a Texas state Medicaid audit finding that 90 percent of Medicaid claims for orthodontic braces were medically unnecessary and invalid. Texas’ reduction of payments to some of All Smiles’ clinics led in part to All Smiles filing for bankruptcy in May 2012."

Dental Fraud

"February 8, 2021, the OIG obtained a joint settlement with two dental practices, located in Lancaster and Fort Worth, both owned and operated by the same two dentists. A review of client files discovered instances of inappropriate billing, services not rendered, upcoded services, missing or inadequate documentation, medically unnecessary services, and failure to meet the professional standard of care. In November, the provider agreed to pay $90,000 to resolve the overpayment caused by the identified violations".

Do you still think you don't need a compliance program? Having a strong compliance program can protect the provider as well as the patients and staff.  

Sources to get your Compliance Program Started