Facing a Qlarant audit is a serious matter for healthcare providers and other entities that bill Medicare or Medicaid. While the Qlarant Foundation is a non-profit entity, Qlarant Integrity Solutions is a profit-driven entity that works on behalf of the Centers for Medicare and Medicaid Services (CMS) to uncover healthcare fraud and misuse of Medicare and Medicaid funds. It serves as both an Investigations Medicare Drug Integrity Contractor (I-MEDIC) and Unified Program Integrity Contractors (UPIC) for CMS—meaning that it has the authority to conduct internal audits on providers and other entities that bill Medicare Parts C and D as well as all other Medicare and Medicaid matters.
An effective defense strategy is essential since Qlarant and Medicare audits can lead to recoupments, denial of pending claims, prepayment review, and other penalties. When facing Qlarant audits, targeted providers and organizations need to know what (if anything) the company’s auditors are going to find, and they need to structure their defense strategies accordingly.
“While Qlarant audits can lead to substantial financial penalties for healthcare providers and other Medicare and Medicaid participants, these aren’t the only risks involved. If Qlarant uncovers evidence of intentional billing violations, it can (and often will) inform the U.S. Department of Justice (DOJ). The DOJ investigates instances of criminal healthcare fraud, and its investigations can lead to serious charges carrying fines and prison time for company owners, executives, and medical practitioners.” – Dr. Nick Oberheiden, Founding Attorney of Oberheiden P.C.
With this in mind, what does it take to successfully defend against a Qlarant audit? Here are five keys to a successful Qlarant audit defense:
Key #1: Focus on Medicare and Medicaid Billing Compliance
Ideally, the process of successfully defending against a Qlarant audit will begin long before the audit takes place. By ensuring that they properly bill Medicare and Medicaid programs, healthcare providers and other entities can position themselves to undergo Qlarant audits (and other similar types of inquiries) without facing adverse consequences.
Of course, effectively managing Medicare and Medicaid billing compliance is not easy—especially today. As the billing rules and regulations continue to evolve and grow in complexity, and as new issues such as electronic billing and artificial intelligence (AI) in healthcare factor into the equation, maintaining strict billing compliance is becoming increasingly difficult. But, this is not an excuse for noncompliance, and Qlarant’s auditors will be all too ready to penalize audit targets for inadvertent compliance failures during the audit process.
With this in mind, what can (and should) healthcare providers do to ensure that they are billing Medicare and Medicaid services appropriately? Some of the keys to an effective federal healthcare billing compliance program include:
- Developing custom-tailored Medicare and Medicaid billing compliance policies and procedures
- Providing training on these policies and procedures to both medical and billing personnel
- Conducting periodic reviews of recent Medicare and Medicaid billing data to assess compliance
- Conducting comprehensive internal billing compliance audits annually
- Promptly addressing any identified billing-related compliance concerns
Together, these steps will serve to substantially mitigate the risks of facing scrutiny from Qlarant during an I-MEDIC or UPIC audit. Even if Qlarant’s auditors uncover billing violations, being prepared to demonstrate these compliance efforts (among others) can help prevent the audit from expanding in scope—and help prevent the audit from resulting in a referral to the DOJ.
Key #2: Figure Out Why You Are Facing a Qlarant Audit
Once your practice or organization is facing a Qlarant audit, one of the first things to do is to figure out why the audit has been initiated. Understanding the cause of an audit is critical for making informed decisions about how to defend against it.
However, Qlarant’s auditors likely will not explicitly tell you. You will have to read between the lines instead.
One key indicator of the focus of a Qlarant audit is the nature and extent of the documents and information that Qlarant’s auditors are demanding for review. If Qlarant’s auditors are seeking patient and billing records, the audit is likely focused on improper billing practices like upcoding or unbundling. If auditors’ requests focus on the organization’s relationships with other healthcare providers, the audit most likely involves scrutiny under the Anti-Kickback Statute and Stark Law instead.
Of course, this will only give you a very basic understanding of the audit’s focus. Conducting an internal review of the documentation requested by Qlarant’s auditors will reveal what (if anything) the audit is likely to uncover, which will be critical for informed decision-making.
Conducting an internal review in this scenario is similar to conducting a regularly scheduled billing compliance audit, though the timely will be condensed significantly. At this stage, you need to discern what Qlarant’s auditors are likely to find as quickly as possible. If your practice or business is fully compliant, then the records that you have on hand should prove it (if they don’t, Qlarant’s auditors will resolve any ambiguities in favor of noncompliance). If your practice or business is not fully compliant, then you will need to take this into account when deciding how best to respond to auditors’ inquiries.
Key #3: Make Sure You Know What You Are (and Aren’t) Required to Disclose
Healthcare providers and other targeted organizations are required to disclose information that falls within the scope of Qlarant’s audit authority as an I-MEDIC or UPIC. They are not required to disclose information that falls outside of Qlarant’s audit authority—though this won’t stop Qlarant from trying to obtain this information so that it can seek to impose additional recoupments and other penalties.
In some cases, providers who Qlarant is auditing will turn over documents that expose Medicare and Medicaid systems fraud, waste, or abuse that they were not legally required to disclose. Voluntarily providing information that was not subject to disclosure is a huge unforced error. Not only are you giving Qlarant’s auditors evidence of fraud that you did not have to provide; but, the disclosure can raise new suspicions about business practices that were not previously being targeted in the audit. The unforced disclosure can end up triggering additional scrutiny, as the auditors look into this evidence that your company is misusing federal government funds in violation of the Medicare or Medicaid billing rules and/or the federal healthcare fraud statutes.
Key #4: Keep the Audit Within Its Original Scope
In this same vein, it is critical that healthcare providers and other targeted organizations focus on keeping a Qlarant audit within its original scope. Qlarant’s authority to demand information and documentation is not absolute. With this in mind, audit targets should intervene in the process and ensure that Qlarant’s auditors do not overreach and seek access to sources of information that they are not entitled to review. By doing so, targets can avoid the inherent risks that come with providing auditors with information that they are not required to disclose—and they can reduce the costs of defending against Qlarant’s audit in the process.
Key #5: Target an Audit Resolution That Avoids Additional Risks and Consequences
As discussed above, Qlarant auditors may refer any evidence of intentional Medicare or Medicaid fraud to the DOJ for further investigation. A DOJ-initiated Medicaid or Medicare fraud investigation will be far more intrusive than a Qlarant audit, and any evidence of wrongdoing that the DOJ uncovers during its investigation can lead to civil or criminal charges under federal law. Additionally, simply facing scrutiny from the DOJ can put healthcare providers’ licenses and credentials at risk in some cases.
Avoiding unnecessary adverse 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 mitigate their risk substantially. This requires effective legal representation; and, to ensure that they have the best possible opportunity to avoid Qlarant-imposed penalties and further scrutiny, providers and other entities that are facing Qlarant audits should engage experienced counsel as soon as possible. When engaged to provide Qlarant audit defense, legal counsel can protect healthcare providers and should assist including:
- Examining the Medicare audit letter and communicating with Qlarant as necessary to determine what triggered the audit.
- Examining Qlarant’s requests for documents and information, determining which requests fall within Qlarant’s auditing authority, and assisting with document collection and disclosure.
- Reviewing all billing records and other documents that fall within the scope of Qlarant’s audit to assess the target’s risk and formulate a custom-tailored defense strategy.
- Working with the target to proactively address any identified compliance violations, and then working with Qlarant to ensure that the consequences of these violations are no greater than necessary.
- Managing and overseeing the entire audit process, challenging improper audit practices and audit findings, and preparing for any next steps (i.e., an audit appeal or DOJ investigation) as necessary.
These are just examples. While the risks involved with facing a Qlarant audit can vary greatly, all audits require an informed, strategic, and comprehensive defense. With the right approach, healthcare providers and other targeted entities can avoid unnecessary consequences.
