1. My practice is the target of a medical claims audit, what should I do?
Audits are becoming more frequent as payers continue to increase “fraud detection” efforts in an attempt to stem losses from perceived abuse of the system. However, in reality most over-payments are not intentional acts, but instead are due to physicians or staff unfamiliar with payers’ complex and often burdensome coding and documentation requirements. The penalties, both civil and criminal, and the financial impact resulting from an audit can be significant and outweigh the cost of early legal representation.
2. Do I need legal assistance during the audit?
Auditors must follow strict standards and procedures during the audit process. It is important to know the rules and monitor auditors’ requests so as not to inundate your office staff and thus negatively impact day-to-day operations. A qualified attorney knows these rules and can work with the auditors to ensure compliance and reduce the stress and demands on your office staff. There are civil and criminal audits. You should never handle a criminal audit without legal counsel. Civil audits, depending on size and scope, may require legal counsel.
3. Why is my practice getting a medical audit?
Audits are done by payers to identify alleged over-payments and collect repayment. Often repayment is deducted immediately from any outstanding balance that the practice has with the payer. An immediate over-payment deduction could financially ruin your business by preventing you from meeting operating expenses.
Common reasons for an audit include:
- Utilization of certain payment codes in excess of peers (e.g. same specialty).
- “Whistleblowers” – someone such as a former employee or patient who was dissatisfied with their experience at the medical practice and may or may not have a legitimate allegation of miscoding.
- Physician practices located in Florida (and New Jersey) are more frequently audited than peers in other states due to historical Medicare over-payments.
4. My practice has received a request from CMS for Comprehensive Error Rate Testing (CERT). What does this mean?
CMS uses CERT to monitor the accuracy of claim payment in the Medicare Fee-For-Service (FFS) Program. Claims are randomly selected for CERT review. When a claim is selected for review, the provider will receive a letter from CMS requesting that medical documentation be submitted for CERT review. This does not mean that your medical practice is suspected of receiving over-payments. However, if irregularities are found during the CERT process, your practice will likely be selected for a limited audit called a Service Specific Probe.
5. Who will be auditing my practice?
If the audit comes from CMS, as opposed to commercial payers, then you will be audited by a Recovery Audit Contractor (RAC). RACs are third-parties hired by CMS and are paid a contingency-fee based on the percentage of “improper payments” they identify. Therefore it is critical to monitor the RAC to ensure their audit methodology is not over-estimating “improper payments”.
6. Can I appeal unfavorable results of a medical claims audit?
At the conclusion of an audit you have the right to appeal the findings. You can appeal the entire audit or only those parts you believe are incorrect. Otherwise you must pay back the identified over-payment. It is important to consider that if an auditor finds an over-payment this does not make it true. Studies show that between 35% – 65% of appealed claims are reversed in favor of the physician.
7. What can I do besides appealing unfavorable results of a medical claims audit?
Another option is to request from the payer a 100% review of your claims for the audit period. This may find underpayments (money due the practice) that should be deducted from the overpayments. But it also exposes you to the risk that additional over-payments could be found.
8. If I appeal should I get legal representation?
The appeals’ process is even more complicated and time-consuming than the initial audit. An attorney can prepare the appeal and negotiate with the payer on your behalf. And if you pursue a legal appeal in front of an Administrative Law Judge (ALJ) an attorney can argue your case, present evidence and put on witnesses in your defense.