Take a Proactive Position on Medicare Audits

Part 1: Know the triggers that make your practice a target

By Riva Lee Asbell

As the pace and number of Medicare audits continue to increase, physicians have presented themselves as easy targets. This two-part series will review the causes and the proactive things one can do to make sure you sail through an audit. First step: learn the rules.

The various types of audits conducted by CMS (Centers for Medicare and Medicaid Services) include: prepayment audits based on the NCCI and MUE edits (National Correct Coding Initiative/Medically Unlikely Edits), and post-payment audits that can be utilization audits, CERT and RAC audits. Medicare, itself, is audited by the OIG (Office of the Inspector General).

The accompanying table (below) shows how CMS fared when audited for 2009 by the OIG. Medicare was found to have improperly paid over $23 billion to all types of providers. Physicians are probably the least of the categories that caused this; however, they make easy targets because they are personally responsible for providing a huge amount of complex documentation and often don't take the time to learn what is required of them.

The reasons for physician audits should not be dismissed lightly. Improper chart documentation, in its various forms, and lack of medical necessity account for a huge amount of erroneous payments. Medicare is working very hard — and very successfully — to correct this.

Types of Audits

Prepayment audits are those performed before payment for a service is issued. If appropriate documentation is found lacking in any way, a more extensive audit usually ensues. Problems with a prepayment audit will lead to a more extensive audit.

Utilization audits are triggered by repeated patterns of abuse. For the most part, it is not the occasional error that instigates an audit — rather, it is the pattern. Physicians are often under the wrong impression that they will go to jail for an occasional simple error. This is simply not true. It is a pattern that calls attention to a provider when he/she is an outlier. Utilization of a given service is calculated per 100 beneficiaries, so it does not matter whether the practice is large or small.

CERT (Comprehensive Error Rate Testing) audits are familiar to most practices. For example, you billed a comprehensive new patient eye code (92004) and you got downcoded to a level 3 E/M (evaluation and management) code for new patients (99203). The charts are initially selected at random; however if there is a problem, a larger sampling will be requested. A full description is found on the Web sites of all Medicare contractors/carriers.

RAC (Recovery Audit Contractor) audits are those that are performed by an outsourced contractor whose payment is on a contingency basis. The issues that they are auditing must be approved by CMS and are posted on the various contractors' Web sites. Take the time to go there and look at them. The West, Midwest and Northwest areas have posted the most issues pertinent to ophthalmology.

Medical Necessity

Denials for services are often based on the alleged lack of medical necessity being present. This issue is increasingly a major cause of audits of ophthalmology practices. The Medicare Carrier's Manual states that all services must be medically necessary and medically justifiable. It is not a matter of what a physician deems is "good medicine." Rather, the service must be warranted in Medicare's opinion. The application of this standard varies according to the type of service performed.

When dealing with evaluation/management services or general ophthalmological services, not only does the service itself (office visits, glaucoma screening, etc.) have to be medically necessary — so do the elements within the service, such as confrontation fields and sensori-motor evaluation. As an example, in a patient being followed for glaucoma with auto mated visual fields, there would be no medical necessity for performing confrontation fields. In a patient with a unilateral choroidal nevus, there would be no medical necessity to perform extended ophthalmoscopy in the other eye.

What Medicare Auditors Evaluate

Based on both OIG recommendations and those of CMS's advisory medical staff, CMS modified the medical review process for the fiscal year 2009 error rate, with important implications for physicians.

The following, taken from the 2009 Medicare Improper Fee-For-Service Payments report, describes the 2009 modifications made to the CERT medical review criteria:

■ February 23, 2009. CMS directed the CERT contractor that clinical review judgment cannot override statutory regulatory ruling, national coverage decision or local coverage decision provisions and that all documentation and policy requirements must be met before clinical review judgment applies.

■ May 31, 2009. Based on CMS policy, during the course of a complex medical review, a claim must be denied if the signature on the medical record is absent or illegible. Through its audit, OIG found that CMS contractors were not uniformly applying this policy. Thus, CMS provided guidance to the CERT contractor that claims should be counted as an error if the CERT reviewer could not identify the author of the medical record entry.

The specific impact of these changes is a reduction in the flexibility allowed for reviewers to determine medical necessity. Previously, the CERT program attempted to determine whether the services listed on a claim were indeed provided and necessary. The reviewers were allowed certain latitude in determining this, based on their training, experience and judgment. The new review approach requires that every condition listed in a policy be met in exactly the way the policy describes it or the claim is considered an error. This new requirement results in many more errors than previously reported.

Error Categories

The following are the error categories that CERT uses; it is for one of these reasons that you may have paid back money.

■ No documentation. Claims are placed into this category when the provider fails to respond to repeated attempts to obtain the medical records in support of the claim. Was your billing department too busy or did the requests for the records get buried?

■ Insufficient documentation. Claims are placed into the category when the medical documentation submitted does not include pertinent patient facts (e.g., the patient's overall condition, diagnosis and extent of services performed). Was your chart documentation really good enough to warrant reimbursement?

■ Medically unnecessary service. Claims are placed into this category when claims-review staff identify enough documentation in the medical records submitted to make an informed decision that the services billed were not medically necessary based on Medicare coverage policies. Did you confuse "good medicine" with medical necessity?

■ Incorrect coding. Claims are placed into this category when providers submit medical documentation that support a lower or higher code than the code submitted. Did you not have four elements in the HPI (most common offense) but still billed a level 4?

■ Other. Represents claims that do not fit into any other category (e.g., service not rendered, duplicate payment error, not covered or unallowable service). Consider the errors that accounted for Carrier/MAC improper payments: Did you bill for an office visit when the patient came in for new eyeglasses as the reason for the encounter?

Final Word

Now that you know what you are up against, you are prepared to fight back. In Part 2, we will describe the proactive efforts you should implement in your practice to keep your money and stay in compliance. OM