How To Respond To An Audit. Guillermo Beades, Esq.

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1 How To Respond To An Audit Guillermo Beades, Esq.

2 The Audit Process

3 The Audit Process Risk Factors What factors put practices at increased risk for an audit? Disgruntled employees Dissatisfied patients Outlier status Pharmacy Sweeps Target Area Enforcement PMP

4 The Audit Process - What To Expect How are Traditional Audits Conducted? Medical Records Requests Medical Record Inspections Were all relevant documents copied? Did the practice maintain a copy of the records copied by Medicare? Consider: who else has copies of these records?

5 The Audit Process - What To Expect The Initial Determination Summary of findings letter: discuss audit findings from the sample Consider whether claims are being submitted properly Consider whether documentation supports CPT codes billed and levels of CPT codes billed Consider other experts for medical necessity challenges

6 The Audit Process - What To Expect Overpayment Demand: typically includes extrapolation Payment is due upon receipt of notice Consider repayment options Consider challenges Cost Benefit Analysis (WATNA / BATNA)

7 The Audit Process - What To Expect Challenging Unfavorable Audit Findings Statistical challenges Billing & Coding Medical Necessity Documentation Challenge Procedural challenges

8 The Audit Process - What To Expect Appealing the Unfavorable Determination (CMS: Redetermination Appeal) Make sure to appeal in time Keep copies of all documents Send appeal via a trackable method Submit appropriate form & requested information E.g., PTAN, TIN, etc.

9 The Audit Process - Medicare Medicare Appeals: Reconsideration Level Appeal Make sure records are complete as you may be precluded from introducing additional information at an ALJ hearing Compare Initial Determination and redetermination data

10 The Audit Process Private Payors Arbitration Most Private Payors have an Arbitration Clause in the provider agreement Make sure records are complete as you may be precluded at arbitration Prepare for cost of arbitration Ensure provider agreement has no fee shifting provision to prevailing party

11 The Audit Process - What To Expect Medicare Appeals: Administrative Law Judge Hearing Submit your appeal Gather your evidence Ensure the completeness of the record Note: negotiations remain open

12 The Audit Process - What To Expect Challenging an Administrative Law Judge Decision Arbitrary and Capricious Standard Very high standard! Expensive Reassess viability of arguments

13 The Audit Process How to Respond

14 Responding to an Audit Compile ALL records immediately Send records timely and appropriately Keep copies of all documents provided Take preventative measures Once request is received determine the issues of Audit Request Make IMMEDIATE changes if needed

15 What is a RAC? RACs Detect and correct PAST improper payments Allowing CMS, Carriers and FI s to Focus on Preventing FUTURE Improper Payments In 2008, $17 Billion in Improper Payments from Medicare Programs

16 How are RAC s Different? Financial Incentives Contingency fees Can draw on Hospital Payment Monitoring Program (HPMP) and Comprehensive Error Rate Testing (CERT) data Permanent designed to develop an automated, ongoing claim denial system

17 The Audit Process - How to Avoid Future Audits

18 Being Prepared & Staying Compliant Compliance Plan OIG has a compliance plan posted on their website ( It is not mandatory, however, it should be considered preventive medicine for a medical practice Office Policy and Procedure Manual Include a section about proper medical record documentation Ensure that staff is trained Develop a policy for internal and external auditing

19 Being Prepared & Staying Compliant Tools of the Trade Medical Dictionary Medical Abbreviations Coder s Handbook / Desk Reference CPT, ICD-10-CM, HCPCS Books 1995 & 1997 Documentation Guidelines Medicare LCDs Auditing Tools

20 Being Prepared & Staying Compliant Local Coverage Determinations (LCD) are a tool to assist providers, physician & suppliers in submitting correct claims for payment Provides correct coding guidance Indicates medical necessity Lists documentation requirements

21 What Can YOU Do? Electronic Medical Records Systems Internal Compliance Audits Identify and implement corrective actions Proper Training for Billing Staff Ensure outside consultants are qualified Repeat Audits and Training Regularly

22 How To Learn More Resources

23 Questions You may contact me at or via at

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