Private and government payers are initiating more medical practice audits, and that trend is likely to continue. In order to successfully navigate the process, providers should prepare in advance to meet the audit challenge.
There are a variety of best practices to employ before, during and after an audit to alleviate the stress of scrutiny that an audit notice can bring. Here are some things to consider:
Why is My Practice Being Audited?
The answer to this question ranges from random selection to targeted investigation. While audits may be random, insurers tend to focus on opportunities to procure overpayment recoveries. For example, practices that maintain billing practices or patterns that vary with those of their peers may be subject to heightened scrutiny. This can include practices that frequently bill with certain modifiers and/ or practices that generate significant revenue. In some cases, a specific provider will generate a “red flag” on the payer system that will trigger a comprehensive audit.
Other audits may be initiated based on a new type of service or treatment offered and billed by the provider. In still other cases, audits and investigations are triggered by a patient complaint or a disgruntled employee. Understanding the reason for the audit can be helpful. but it is not always possible. However, if you receive an audit demand and your practice falls into one of these categories, you will have a better idea of the factors precipitating review.
Before the Audit
The best way to prepare for a future audit is to do one before an insurer sends you a demand. Have you looked at your practice lately? Are your patient files properly documented? Are your provider policies up to date? Performing random internal audits may bring light to issues in your practice that you should address before a payer demands to take a look.
Assuming that appropriate precautions are taken to protect Private Health Information (PHI), outside coding experts can be retained to perform a more extensive review of your documentation and billing procedures and offer guidance from a payer audit perspective. Aside from internal documentation reviews, practices should move to ensure that staff members are properly trained and supervised. Written policies regarding patient files, communication, documentation and privacy issues should be updated and employees should be responsible for understanding these policies and the role they serve within the practice.
It is important to consider the strengths and weaknesses of your Electronic Medical Records (EMRs). In many cases, the electronic records do not capture the data needed to satisfy an auditor review of the patient record and the billing for services contained in the record.
The utilization of a certified billing company is an important consideration for good management of your practice. Before you hire a billing company, make sure their employees are properly trained and certified. Bad billing equals bad audit results.
The Audit Notice
So you received an audit notice. How should you handle it?
First, and before you discuss the demand with anyone, read it carefully. The contents of the notice will provide information that you need to determine the type of audit requested and the time period in which the practice needs to respond. The following steps should be taken immediately:
- Calendar the deadline for responding to the notice. Determine whether it is a demand for documents, a pre- payment review or a post audit overpayment demand.
- Consider who is making the demand. Is it a Medicare audit? Is the demand coming from a private contractor working for a government payer or a private insurance company? The identity of the auditor is critical in determining how and when to respond to the inquiry.
- Check your payer policies and understand the appeal process for each payer.
- Consult with counsel. In addition to appeal procedures, there could be legal issues to consider based on the audit notice.
- Do not talk about the notice with your staff or any other third party until you have had the opportunity to speak with counsel and you are directed accordingly.
During the Audit
Many providers are tempted to speak with the auditor at length before and during the audit. Resist the urge.
It is important to understand the auditor’s goal is to find overpayments and anything you tell the auditor can be misconstrued in favor of that result.
While there are appropriate ways to communicate to discover information, do not attempt to do this discovery on your own. If an auditor has questions regarding your practice, ask him to put his questions in writing so that you have an opportunity to carefully evaluate the questions with your counsel. Look for your attorney to advise you regarding the scope of the audit to ensure that you are providing only what is lawfully requested.
After the Audit
Choosing a course of action (or not) following an audit depends upon a variety of factors. First, has the auditor shared any findings of the audit? Have you been advised that documentation is missing or that bills have been improperly coded? If the auditor shares information along this line, listen carefully. Minor documentation issues typically can be resolved while other more significant or pervasive problems may result in substantial liability. It may be difficult to discern whether your practice needs to correct minor issues or whether the audit finding will lead to a more extensive investigation of your practice. Regardless of the audit response, be sure to maintain copies of each and every item requested by and provided to the auditor and consult with your attorney throughout this process.
The development of a best practice approach to survive the audit process will help to reduce audit anxiety, yield favorable audit outcomes for providers and build a stronger practice.
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