Regulation of Medicine


Understanding Your Regulatory Risks – and How to Prevent Them

Government investigations and payor audits: the words themselves are scary enough, and the reality might be worse. Those two items alone account for 91% of the regulatory claims our insureds report and the highest payouts they experience. In the United States, recoveries under the False Claims Act amount to more than $75 billion since 1986, when Congress substantially strengthened the legislation.

But, as they say, knowledge is power. To reduce the risk of regulatory claims against you and your practice, it’s important to understand the focus of recent governmental and payor investigations. Read on to learn the top regulatory risks by severity and frequency, as well as the leading causes of payor audits and government investigations.

Top Risks by Severity

  • Government investigations (fraud and abuse)
  • Payor audits
  • Americans with Disabilities Act violations
  • HIPAA investigations
              Risk Drivers by Top Cause
              Top risks by frequency% of total Claims
              Payor Audit47%
              Government Investigation (fraud and abuse)44%
              Americans with Disability Act Violations4%
              HIPAA Investigations4%



              What is causing the high frequency payor audits?% of total
              Insufficient Documentation Supporting Claims38%
              Billing for Medically Unnecessary Procedures32%



              What is causing the high severity government investigations?% of Claims
              Inappropriate Referral Relationship with Third-Party Vendor in Violation of the Antikickback Statute37%
              Financial (ownership or compensation) Relationship with Related Entity in Violation of the Stark Law19%
              Utilizing Non-Licensed Pharmaceutical Whole Drug Distributors16%



              To understand more about how to prevent potential problems, explore our Learning Center. We offer resources to help increase your knowledge of federal fraud, abuse and compliance laws such as the Americans with Disabilities Act (ADA) and HIPAA — and how to avoid the expensive and time-consuming issues violations can cause. 



              Download a copy: Regulatory Risk Overview

              Data Collection & Methodology

              Data is based on MagMutual claims reported from 2016-2019 and closed claims from 2016-2020. Loss drivers are based on an in-depth review of each claim by a medical professional or clinical risk consultant.


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              The information provided in this resource does not constitute legal, medical or any other professional advice, nor does it establish a standard of care. This resource has been created as an aid to you in your practice. The ultimate decision on how to use the information provided rests solely with you, the PolicyOwner.