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Upcoding occurs when a higher-paying code is assigned without documentation support. Downcoding (A) is intentionally lowering a code. Undercoding (B) is reporting fewer codes than supported. Ethical coding (D) is proper practice. Upcoding is a compliance risk that may trigger payer audits, penalties, and even False Claims Act liability.

Capitation provides providers with a per-member-per-month (PMPM) payment. Fee-for-service (B) pays per service rendered. Per diem (C) pays per day. Bundled payment (D) pays for an episode of care. Coders must ensure accurate diagnosis capture to support risk-adjusted payments in capitated models.

The Breach Notification Rule requires covered entities to assess and notify patients when unsecured PHI is impermissibly disclosed. Faxing PHI to the wrong office qualifies as a potential breach unless risk assessment determines low probability of compromise. Privacy (A) governs disclosure standards, Security (B) governs safeguards, and HITECH (D) strengthened enforcement but the Breach Notification Rule specifically applies here.

HL7 and FHIR are interoperability standards that allow seamless exchange of health data across disparate systems. Option A (data mining) analyzes existing data. Option C supports coding accuracy but not exchange. Option D stores data but doesn’t standardize communication. Interoperability supports care coordination, EHR integration, and secondary uses of health data—key areas for coding accuracy and compliance.

Medicare reimburses critical access hospitals using cost-based reimbursement (typically 101% of reasonable costs). MS-DRGs (A) apply to acute inpatient hospitals. OPPS (B) applies to outpatient hospitals. ASC PPS (D) applies to ambulatory surgery centers. Coders should be aware of CAH reimbursement to understand financial differences in rural healthcare.