Coding and billing audits are time-consuming, costly, and common.
“It is most likely that at some point in time every provider will be audited at some level,” says Terry Fletcher, a healthcare coding and billing consultant, educator, and auditor.
Many audits are conducted by the Centers for Medicare and Medicaid Services and its contractors. Private payers, such as Anthem and United Healthcare also audit claims, but they also rely on pre-certifying tests and procedures before they occur to manage costs and avoid denials.
CMS implemented a new audit program, Targeted Probe and Educate, in August 2017.
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Conducted by Medicare Administrative Contractors (MACs), these audits typically involve up to three rounds of review, with between 20-40 claims per provider, per item or service, per round. The MACs focus on providers who “have the highest claim error rates or billing practices that vary significantly from their peers,” CMS said when it announced the program.
CMS says the program is designed to educate physicians on proper coding and documentation, reducing denials and incorrect payments. However, if providers fail three rounds, they are referred to CMS for further action, such as ongoing prepayment or post-payment review of claims. They also may be referred to a Recovery Audit Contractor(RAC), which reviews past claims to determine if CMS overpaid or underpaid them.
CMS also uses random sampling to select claims—including approved and denied claims—for auditing under its Comprehensive Error Rate Testing Program.
In some cases, the Department of Justice will step in to investigate the possibility of fraud or false claims. For example, in the fiscal year ending September 2018, the Justice Department collected $2.5 billion in settlements and judgements against the healthcare industry, according to a department news release.
When it comes to physicians’ outpatient practices, a lot of auditing and compliance efforts revolve around Evaluation and Management CPT codes—which cover outpatient office visits.
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While it’s not possible avoid being audited completely because payers flag claims based on many variables, there are steps you can take to be prepared if you are subjected to an audit. These steps also may reduce your risk of being targeted for an audit, experts say.
Conduct internal audits regularly
“We recommend that practices do internal audits, and not just when you open your practice or you close, but that you are consistently doing spot checks on billing,” explains Laura Terpsma, a lawyer specializing in compliance at the Chapman Law Group.
When you find a pattern of irregularities in coding and billing, you should revise your policies and procedures to prevent those issues from reoccurring in the future. “The number one thing would be to be really, really regimented in your billing policy,” Terpsma says.
Regular auditing not only helps you correct irregularities, but it also shows CMS that you take compliance seriously. “If you have mistakes that have been happening habitually for the last seven years, and no one has ever looked at why, I, as an auditor, am going to say, ‘You know this is happening. You are just turning a blind eye to it.’ There is no excuse for blind-eye behavior,” Terpsma points out.
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