A Qlarant audit is a serious event in the life of a healthcare provider and company. This auditing contractor claims that it is a non-profit company that works on behalf of the government to uncover healthcare fraud and misuse of Medicare and Medicaid services funding. In practice, though, it behaves as a vigorous law enforcement agent similar to other Unified Program Integrity Contractors (UPICs), who are compensated based on how much fraud and waste they uncover through their auditing techniques.

Qlarant audits are something to defend against. Here is a basic step-by-step overview that Dr. Nick Oberheiden, a federal healthcare defense lawyer, uses to benefit his clients and protect healthcare providers against Qlarant audits and investigations.

1. The Best Defense is Compliance

By far the best way to defend against a Qlarant audit process is to be prepared for it and to take the steps necessary to ensure that it does not uncover any evidence of fraud, waste, or misuse of federal healthcare money. Staying in strict compliance with Medicare and Medicaid laws and regulations is far from an easy task. It takes constant vigilance and, even when healthcare providers do all that they can to ensure compliance, a Qlarant audit process may still uncover discrepancies because a single employee at the healthcare company had a bad day.

But crafting an all-encompassing compliance strategy, training and retraining your workers to stick to it, and updating it to make sure it stays up-to-date with all of the changes to healthcare law only goes so far. Healthcare providers should also strongly consider hiring outside legal counsel to conduct internal audits to ensure compliance, as well.

Internal auditing is an essential aspect of a good compliance strategy because it will uncover the discrepancies that a Qlarant audit process will find before it finds them. This lets the company fix what went wrong, correct the errors, and take the necessary steps to prevent them from happening again, all while avoiding the substantial penalties that would have followed if the Qlarant audit process had been the one to discover the problems.

Together, compliance and internal auditing create the best defense against a Qlarant audit: Deterrence. Many of Qlarant’s audits are initiated after the company finds anomalies and outliers in Medicare or Medicaid billing data that suggest billing errors, billing mistakes, and violations or an unlawful relationship between healthcare providers. Adopting a strict compliance protocol can prevent those red flags from appearing in government data and deter a Qlarant audit from ever happening.

2. Figure Out Why the Audit is Targeting You

If your company does get targeted by a Qlarant audit, one of the first things to do is to determine why, exactly, it is happening. Only by knowing why the audit is happening can you make an informed decision about how to defend against it.

However, Qlarant auditors likely will not explicitly tell you. You have to read between the lines, instead.

A big indicator is the nature and extent of the documents and information that Qlarant auditors are demanding for review. If the information concerns patients treated and medical bills, the audit is likely focused on improper billing practices like upcoding or unbundling. If the information focuses on your relationship with other healthcare providers, you are probably being audited because you are a suspect of giving or taking illegal kickbacks.

This only gives you a basic sense of what the audit is about, though. Conducting an internal review of the documentation requested by Qlarant auditors can reveal what the audit will likely find, which can help you get ahead of the investigation.

3. Ascertain Your Disclosure Requirements

Healthcare providers are required to disclose information that falls within the scope of the Qlarant audit. However, they are not required to disclose information that falls outside the audit’s scope.

In some cases, providers who are being audited by Qlarant hand over documentation that suggests Medicare or Medicaid fraud, waste, or misuse of funding, but that was not within the scope of the audit. Disclosing incriminating evidence that did not have to be handed over is a huge unforced error. Not only are you giving Qlarant auditors evidence of fraud that you did not have to provide; the disclosure can raise new suspicions about a completely different business practice than was being targeted in the audit. The unforced disclosure can end up triggering an entirely new Qlarant audit in the future, as the auditors look into this new sign that your company is misusing government money that it was unaware of, before.

4. Keep the Audit Within Its Scope

Qlarant’s authority to demand information and documentation is not absolute. Nevertheless, its auditors frequently behave as if they have the power to access everything your healthcare company has ever produced.

Healthcare providers should intervene in the Qlarant audit and ensure that it does not stray beyond its scope and overreach into sources of information that they should not have had access to. By doing so, you can avoid the serious problems that also come with handing over damning evidence that did not have to be disclosed.

5. Prevent Criminal Law Enforcement Agencies from Getting Involved

Perhaps most importantly of all, Qlarant auditors will refer any evidence of illegal Medicare or Medicaid fraud to law enforcement agencies like the Department of Justice (DOJ) for further investigation. That Medicaid or Medicare fraud investigation will be far more intrusive than the Qlarant audit, and any evidence of wrongdoing that it finds can lead to civil or criminal charges and cases being filed.

A mere inquiry by the DOJ can put a healthcare provider’s state licensing at risk. If evidence is uncovered of wrongdoing, it can lead to civil fines and potentially even jail time.

Avoiding these outcomes is absolutely critical. By proactively challenging or explaining the evidence that is being used to support a DOJ investigation or by appealing the outcome of the Qlarant audit, healthcare providers can prevent the case from escalating to this stage.

As Dr. Nick Oberheiden, founding partner of Oberheiden P.C. and a leading Qlarant audit defense attorney, says, “Preventing a Qlarant audit from turning into a DOJ investigation is absolutely critical. It is not a foregone conclusion, though, even if the audit uncovered evidence of fraud. A good healthcare defense lawyer can get proactive in the case, open a channel of dialogue with the Qlarant auditors as well as the prosecutors at the DOJ, and present exculpatory evidence that suggests that the audit’s findings are not what they seem to be. In some cases, this can persuade the DOJ to not pursue its own investigation.”