Over the past several years, in an attempt to minimise the financial damage of the economic turn down, payers have increasingly turned to aggressive and robust audit events to minimise the amount that they pay providers for providing healthcare services to their subscribers. The federal government is no stranger to this process and with the introduction of the new health care reform legislation (AHCA), Medicare and Medicaid audits have increased in both their number and aggressiveness in order to fund the new program.
Healthcare providers face different types of medical record audits and with the changing focus and increasing expectations of payers, advanced preparation is crucial for success. Audits can be conducted to verify general compliance or they can be prompted by actual charges or by indications of noncompliance.
Service providers face different types of audits today. They include:
- Recovery Audit Contractors (RAC)
- Medicaid Integrity Contractors (MIC)
- Zone Program Integrity Contractors (ZPIC)
- Medicare Administrative Carriers (MAC)
- Office of the Inspector General (OIG)
- Healthcare Fraud Prevention Enforcement Action Team (HEAT)
- Comprehensive Error Rate Testing program (CERT)
- Department of Justice (DOJ)
This is far from a comprehensive list and as stated above, excludes private payer audits. And while each of these entities is unique in their operational requirements, they also overlap with respect to jurisdiction.
The goal is to examine out of the ordinary medical billing or coding practices and evaluate compliance with payer rules and regulations. Documentation will be examined to ensure that the services provided were reasonable and necessary to diagnosis or treat a patient’s medical condition. Understanding payer contracts is crucial as different payers have different definitions of what constitutes “medical necessity”.
The main issues that compliance audits look for are:
- Overcoding or undercoding
- Misuse of Advanced Beneficiary Notification
- Performance of special tests without interpretation and report
- Violations of basic documentation rules
- Unbundling issues
- Billing for Evaluation and Management services without proper documentation
- Misuse of modifiers or medical necessity
- Conducting a special test without an order in the record
Pre Audit Risk Analysis:
The pre‐audit risk consists primarily of looking at the frequency with which both modifiers and procedure codes are reported for a practice. Additionally, we also consider the number of hours represented by the procedure utilisation.
The advantage of opting for pre-audit services are that they help providers ensure that their documentation supports the claims submitted for payment and proves the integrity of their services. Experts in the medical billing companies providing these services will assure clean record keeping by verifying if:
- The exam notes support the diagnosis
- Documentation is available for all visits billed
- All the medical records are signed
- All referrals are documented in the records
- Medical record supports orders for special tests
By identifying irregular claims and anomalous billing patterns, pre-audit services will uncover potential fraudulent and/or abusive practices and help physicians’ practices ensure compliance and avoid penalties or litigation.