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Guillermo Beades, Esq.
How To Respond To An Audit
The Audit Process
The Audit Process – Risk Factors
• What factors put practices at increased risk for an audit?
•Disgruntled employees
•Dissatisfied patients
•Outlier status
•Pharmacy Sweeps
•Target Area Enforcement
•PMP
The Audit Process - What To Expect
• How are Traditional Audits Conducted?
–Medical Records Requests
–Medical Record Inspections
• Were all relevant documents copied?
• Did the practice maintain a copy of the records
copied by Medicare?
• Consider: who else has copies of these records?
The Audit Process - What To Expect
• The Initial Determination
– Summary of findings letter: discuss audit findings
from the sample
– Consider whether claims are being submitted
properly
– Consider whether documentation supports CPT
codes billed and levels of CPT codes billed
– Consider other experts for medical necessity
challenges
The Audit Process - What To Expect
• Overpayment Demand: typically includes
extrapolation
–Payment is due upon receipt of notice
–Consider repayment options
–Consider challenges
–Cost Benefit Analysis (WATNA / BATNA)
The Audit Process - What To Expect
• Challenging Unfavorable Audit Findings
–Statistical challenges
–Billing & Coding
–Medical Necessity
–Documentation Challenge
–Procedural challenges
The Audit Process - What To Expect
• Appealing the Unfavorable Determination
(CMS: Redetermination Appeal)
• Make sure to appeal in time
• Keep copies of all documents
• Send appeal via a trackable method
• Submit appropriate form & requested
information
–E.g., PTAN, TIN, etc.
The Audit Process - Medicare
• Medicare Appeals: Reconsideration Level
Appeal
– Make sure records are complete as you may be
precluded from introducing additional information
at an ALJ hearing
– Compare Initial Determination and
redetermination data
The Audit Process – Private Payors
• Arbitration
–Most Private Payors have an Arbitration
Clause in the provider agreement
–Make sure records are complete as you may
be precluded at arbitration
–Prepare for cost of arbitration
–Ensure provider agreement has no fee
shifting provision to prevailing party
The Audit Process - What To Expect
• Medicare Appeals: Administrative Law
Judge Hearing
–Submit your appeal
–Gather your evidence
–Ensure the completeness of the record
–Note: negotiations remain open
The Audit Process - What To Expect
• Challenging an Administrative Law Judge
Decision
–Arbitrary and Capricious Standard
• Very high standard!
–Expensive
–Reassess viability of arguments
The Audit Process – How to Respond
Responding to an Audit
• Compile ALL records immediately
• Send records timely and appropriately
• Keep copies of all documents provided
• Take preventative measures
–Once request is received determine the issues of Audit Request
–Make IMMEDIATE changes if needed
What is a RAC?
• RACs Detect and correct PAST improper
payments
• Allowing CMS, Carriers and FI’s to Focus
on Preventing FUTURE Improper
Payments
• In 2008, $17 Billion in Improper
Payments from Medicare Programs
How are RAC’s Different?
• Financial Incentives
– Contingency fees
• Can draw on Hospital Payment Monitoring
Program (HPMP) and Comprehensive Error
Rate Testing (CERT) data
• Permanent – designed to develop an
automated, ongoing claim denial system
The Audit Process - How to Avoid
Future Audits
Being Prepared & Staying Compliant• Compliance Plan
– OIG has a compliance plan posted on their website (http://oig.hhs.gov/index.asp)
– It is not mandatory, however, it should be considered preventive medicine for a medical practice
• Office Policy and Procedure Manual– Include a section about proper medical record
documentation
– Ensure that staff is trained
– Develop a policy for internal and external auditing
Being Prepared & Staying Compliant
• Tools of the Trade
– Medical Dictionary
– Medical Abbreviations
– Coder’s Handbook / Desk Reference
– CPT, ICD-10-CM, HCPCS Books
– 1995 & 1997 Documentation Guidelines
– Medicare LCDs
– Auditing Tools
Being Prepared & Staying Compliant
• Local Coverage Determinations (LCD) – are a tool to assist providers, physician & suppliers in submitting correct claims for payment
– Provides correct coding guidance
– Indicates medical necessity
– Lists documentation requirements
What Can YOU Do?
• Electronic Medical Records Systems
• Internal Compliance Audits
– Identify and implement corrective actions
• Proper Training for Billing Staff
–Ensure outside consultants are qualified
• Repeat Audits and Training Regularly
How To Learn More
Resources
• http://www.cms.hhs.gov/
• http://www.ngsmedicare.com/ngsmedicare/HomePage.aspx
• http://www.oig.hhs.gov/
• http://www.drlaw.com/
