When the auditor beckons …

That letter has come, and it doesn’t send birthday wishes. Are your records in order? Great. If not, consider it a teaching moment.

By Mary Pat Johnson, COMT, COE, CPC

Noncompliant and audit — two words no physician or practice administrator wants to hear. To help ensure that they don’t, practices must make sure their reimbursement claims are accurate and that they adhere to billing regulations, all part of their quality assurance and compliance efforts.

Medicare and other payers review claims and payments through postpayment audits. The objectives of the Fraud Prevention Initiative, which the Centers for Medicare & Medicaid introduced in 2011, included avoiding payment for erroneous claims and removing providers and companies that submit fraudulent claims from participating in federally funded health-care programs. This leaves providers questioning how to respond if (or when) they receive notification of a postpayment audit.

In this article, I provide steps to consider when navigating the audit process.

Determine who is involved

The Medicare administrative contractor (MAC) that handled the claim does not conduct all audits. Multiple organizations perform CMS reviews. The initial letter requesting information usually provides this information. The request for records could come from any of the following:

• Comprehensive Error Rate Testing (CERT). In a CERT audit, medical records and claims are reviewed for compliance with Medicare coverage guidelines, coding instructions and billing rules. The audit results are used to calculate the annual Medicare fee-for-service error rate. Providers and facilities to be reviewed are chosen at random to develop a statistically valid claims sample.

• Recovery auditors. CMS hired four contractors to conduct these audits based on where the services were provided. The current auditors are Performant Recovery, CGI, (or CGI Federal) Connolly Consulting Associates, Inc. and Health Data Insights. With these audits, they identify and recover improper payments made to providers.

• Program Safeguard Contractors (PSC) audits and Zone Program Integrity Contractors (ZPIC) audits. PSC and ZPIC audits are far more serious in their purpose. Their primary goals are to identify cases of suspected fraud, conduct a thorough investigation, take immediate action to recoup any payments that were made in error and prevent further instances of inappropriate payments.

Your local MAC may also request medical records and conduct a review in response to unusual billing patterns, claims errors that have caught their attention or a complaint filed against the practice.

Knowing who is conducting the audit and the potential concerns will help the practice formulate its response. After receiving an initial letter, assess the list of services requested and determine if the audit includes a random sample of services or focuses on a potential problem. Arm yourself with the policies and instructions specific to the services in question. Ask the following:

• Are the services involved similar in nature (exams vs. diagnostic tests vs. surgery)?

• Does the review focus on just one provider?

• Were the services involved provided on the same date or at the same location?

Assemble a response team

It could take time to gather all the records, depending on the scope of the review. Designate a point person who will coordinate this effort, organize the records, author any communication to the reviewers and assure the deadlines are met. Do not be afraid to get the physicians involved. You may also want to advise your attorney of the request for records audit especially if a PSC or ZPIC is involved.

Watch deadlines

The deadline for submitting your response is included with the initial request. Typically, providers have 30 days to provide the requested information but this can vary. If you cannot meet the deadline, you may request an extension by contacting the individual who authored the initial request. If granted an extension, ask for written confirmation of the new deadline date.

Prepare the documents

Begin by reviewing the details of the request for records with the team who will assemble the records to help ensure that all pertinent documents are included in your response.

It should go without saying, but do not alter records. CMS’ website provides instruction on how to appropriately create an addendum, amendment, correction, addition or deletion to a medical record. However, the middle of an active audit is not the best time to do any of those things, so be cautious.

The request may be for a single date of service or for documents supporting services provided over multiple dates. Provide all relevant notes to support the service in question, even if those notes were generated at an encounter outside the specific date range requested. For example, if the claim for a surgical service is questioned, the reviewer will need to establish that the procedure was medically necessary, coded correctly and billed in accordance with policy instructions. Replying to this request by submitting only the operative report would be inadequate. The medical necessity for the surgery should be established in the history, patient questionnaires and exam documented during visits prior to surgery. These notes should accompany your response.

Additionally, review the patient’s records and claims history for services on or about the same date that may affect the claim in question. For example, was the service performed as part of a bigger procedure? Was the patient in a global period for another procedure? If so, were the appropriate modifiers used to indicate the service was billable?

Do not highlight text in the medical records or operative note to draw attention to particular entries. Once received at the reviewer’s office, these records may be copied or scanned and sent electronically to the individual who will review them. Highlighted text often becomes illegible.

To make it as easy for the reviewers to find what they need, organize your records by patient. Consider a cover sheet or checklist with each patient “packet” pointing the reviewer to specific items. It may be useful to design a separate checklist for each category of service. For example, the cover sheet in an audit of a blepharoplasty could include the items required by the payer’s LCD (See Sample cover letter, above). Also, include a list of commonly used abbreviations and a signature log for all providers and staff who document in your medical records.

Catch ‘em while you can

Throughout the preparation process, conduct your own audit of these records. If you see deficiencies in documentation that resulted in an overpayment, consider a proactive response to the payer before the project is completed — this may require involvement of legal counsel. You may also uncover services that you neglected to bill. If a claim is appropriate and you are within the filing period, submit the appropriate claims for these services.

Once prepared, maintain a copy of everything you send. Then, package and ship the records in accordance with HIPAA instructions via a secure and traceable shipping service. Double package the documents and mark the outside of the package as “CONFIDENTIAL”.

The results are in

Depending on the payer and nature of the review, it may take some time to get the results of your audit. When a response arrives, review it thoroughly. For any services with an unfavorable response (e.g., a refund request), determine whether an appeal is warranted. CMS has a well-established appeal process, including the deadlines and requirements at each level of appeal. Other payers likely have their own requirements.

Following an audit and the subsequent appeals, the practice is obligated to correct any claims that were billed in error or not supported. At the risk of sounding “Pollyanna-ish,” I suggest that you use the audit as an opportunity to learn more about your claims process, from documentation and coding to understanding the rules and submitting claims. Chances are it will reinforce what your team does well and uncover what could be improved.

Discuss the review’s findings during your next staff training session and implement necessary corrections.

Internal chart auditing is part of an effective compliance plan. Consider implementing (or stepping up) your internal audit efforts to help identify and correct errors in-house, before an outside group gets involved.

Finally, if you have not yet developed a compliance program, an audit of this nature should motivate you to do so. A compliance plan is one way the practice formally (in writing) attests to its goal of acting in accordance with the rules and regulations.

It will not protect you from being audited, but it shows the practice’s good faith effort to do what is right. OM

About the Author
	Mary Pat Johnson joined Corcoran Consulting Group in 1992, where she is a senior consultant. She has been in the field of ophthalmology since 1985, when she began her career as an ophthalmic technician. Ms. Johnson teaches continuing education courses and workshops at local, regional and national meetings.