Dealing With a Medicare Physician Audit
Dealing With a Medicare Physician Audit
Be proactive, prepared and positive.
RIVA LEE ASBELL
Medicare audits range from a minor nuisance to a life-altering event for the physician and practice. I have witnessed and been involved in both extremes, as well as the range in between. This article defines certain characteristics of various types of Medicare audits and provides suggestions for dealing with them. A companion article, “When You Need a Health-Care Fraud Lawyer” by David Laigaie, Esq., a Philadelphia lawyer who specializes in health-care fraud, appears on page 38.
Six Types of Medicare Audits
■ Utilization audits. These audits are based on an individual’s utilization record of a given CPT code based on comparison data with his or her peers for the same service. Medicare makes the comparisons between members of the same specialty.
Medicare does not designate subspecialties within ophthalmology; thus each ophthalmologist is compared with all other ophthalmologists. This sometimes results in an audit that may not be warranted. For example, an audit may focus on a retina specialist’s extended ophthalmoscopy procedures because they exceed utilization rates of all other ophthalmologists, including non-subspecialists, which would be much lower.
■ Recovery Audit Contractor (RAC) audits. These are the dreaded RAC audits physicians often confuse with other types of audits. The acronym is often used as a catchall phrase for all Medicare audits. CMS has changed the name to Recovery Audit Program, so you may see different nomenclature. As originally formulated, two types of RAC audits exist: automated and complex. Automated audits are based on data mining, whereas complex audits require review of medical records.
Up to now, the bulk of the audits have been data mining. However, in September Connolly Inc., a national contractor for RAC audits, received permission to review CPT code 99215 (level 5 established patient visit) and will be asking for medical records, making this a complex audit. In a recent development, CMS indicated it is limiting these reviews to an initial “test” by Connolly that will involve a limited number of physicians before determining if these audits will go forward A decision on the scope of these audits is expected within six months. The AMA and several medical societies have already requested CMS withdraw these audits, and so the games begin.
|Novitas: A Case Study
As part of the ongoing consolidation of Medicare administrative contractors, Novitas Solutions has become an 800-pound gorilla and now serves as or is transitioning to the Part B Medicare administrative contractor for 11 states, the District of Columbia, and parts of Virginia. Let’s use this contractor for examples.
Here, I have combined information from two recent quarterly reports from Novitas Solutions that provide an analysis of Part B Comprehensive Error Rate Testing (CERT) Data to show the incidence of various types of coding errors from January through June 2012. I’ve selected pertinent areas for ophthalmology.
Most of the coding errors were related to E/M services. The errors ranged from new and established office and inpatient visits to emergency and initial and subsequent nursing home visits. An error was recorded when the provider’s documentation did not substantiate the level of care billed on one or more of the key components — history, exam or medical decision. Most insufficient documentation errors were related to the following areas:
► Documentation did not support the need for a service based on the related local coverage determination (LCD).
► Medical record documentation or physician signature, or both, were missing or not legible.
► Documentation lacked results of laboratory tests to support the medical necessity of the procedure or service performed.
► The medical record did not contain a valid physician’s order, documented order intent or clinical indication for the service.
► Documentation did not support the ICD-9 code billed.
► Documentation did not adequately describe the service as defined by the relevant CPT or HCPCS code.
In nearly every practice, self-audits will reveal similar chart documentation errors. Educating yourself is your best tool and your best protection.
Examples of automated audits include Place of Service Audits (requests for refunds based on the wrong place of service stated on the claim) and audits of verteporfin (Visudyne, Novartis, East Hanover, N.J.), with refund of supply payments demanded.
Recently, as part of a demonstration project, RAC contractors have been authorized to perform prepayment reviews that request claims review and chart documentation before issuing payment. RACs will conduct prepayment reviews on certain types of claims that have historically resulted in high rates of improper payments. Several states with high populations of fraud- and error-prone providers (Florida, California, Texas, New York, Louisiana and Illinois) and four states with high claims volumes of short, in-patient hospital stays (Pennsylvania, Ohio, North Carolina and Missouri) have been selected. Because a high percentage of physicians’ chart documentation does not meet the E/M criteria for given codes, the demonstration is sure to be successful and then become part of RAC audits.
■ Comprehensive Error Rate Testing (CERT) audits. CMS developed the CERT audit program to develop a national Medicare Fee for Service error rate. CMS actually audits each Medicare administrative contractor for the amount of claims it paid to providers in error. This translates to audits of providers on such things as excessive level 4 new patient visits billed, signature requirement fulfillment, misuse of modifiers and documentation of injection procedures.
If the Medicare contractor finds a high error rate, the contractor will become more aggressive in auditing providers and increase its educational efforts via webinars and articles to reduce the rate. Your first warning of impending audits is the increased educational offerings on a given subject by your Medicare administrative contractor.
■ Medicare Administrative Contractor (MAC) audits. The contractor itself conducts this audit on providers. These reviews may be based on internal findings by the MAC itself or external findings, such as erroneous coding of level of service, signature absences, or misuse of modifiers. The Office of the Inspector General monitors CMS activities and is active in bringing issues to the attention of Medicare contractors.
■ Department of Justice audits. When a whistleblower starts a qui tam lawsuit (qui tam is a writ that allows a private individual who assists a prosecution to receive all or part of any penalty imposed), the Department of Justice usually gets involved. A search and seizure at the practice may ensue. This is the most serious audit that a practice can encounter. Often it may emanate from a disgruntled employee who does not understand the complex mechanisms of even a small practice.
■ Quality Assurance Audits. One last word on types of audits: Don’t confuse Medicare fee-for-service audits of providers with other types of audits that may emanate from the Medicare Advantage programs or be based on Healthcare Effectiveness Data and Information Set (HEDIS). Medicare audits its Advantage plans itself, usually via quality control audits regarding the overall medical care of patients. However, some plans do outsource audits of the type a MAC or Zone Program Integrity Contractors (ZPIC) would perform as part of CMS-directed audits.
I was involved in an audit of this type involving interpretation and reports for diagnostic tests. The intent was to extrapolate the findings and base the recovery of funds on that. What’s more, the auditors were not well versed in ophthalmology and tried to apply rules from other Medicare contractors and carriers from a different region. The outcome was successful, but the experience was harrowing.
|Audit-proof Your Practice
Is an ounce of prevention worth a pound of cure? You’d better believe it. Here are three steps you can take to audit-proof your practice.
■ Physician accessibility. Create an atmosphere in your practice that lets your employees know you are never too busy, and always are interested, in being informed about potential problems. Employees are often overprotective of the practice and afraid of taking up the doctor’s time.
■ Compliance programs. While a compliance program with internal audits may sound like a good thing, it can also backfire if not conducted properly. Attorneys will tell you it is worse to have a compliance program and not adhere to its specifics than not to have one at all. If you do have one, make sure you can comply with all of the provisions.
■ Internal audits. Most compliance plans specify internal audits at given intervals, but who are the internal auditors going to be? Where were they trained? Who is overseeing and checking them? What experts are available to provide advice? It is advisable to have periodic external audits as well.
How to Handle an Audit
A request for your medical records is fraught with danger if you do not handle it properly. The first rule is, create a policy in your office that all requests from Medicare for copies of medical records are brought to the attention of the administrator/office manager and physician(s) the day they are received.
If the request is for 10 or more charts, seek out professional advice. Contact an ophthalmic reimbursement consultant familiar with handling audits or a health-care attorney. Obtain legal counsel — preferably an attorney who specializes in health-care fraud — when search and seizure of medical records occurs. (A more complete discussion of legal counsel’s role in a Medicare audit appears in Mr. Laigaie’s article above.)
Advice for CERT and RAC audits is readily obtained from either an ophthalmic reimbursement consultant or health-care attorney. However, anything that involves the Department of Justice should be handled with the advice of a health-care attorney from the beginning. This applies the protection of attorney-client privilege to all records and information. OM
|Medicare Audit Resources
► Your important reference for this article is the handbook issued by CMS, available at: www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/MCRP_Booklet.pdf
► The Wills Eye Institute Annual Training Course in E/M and Eye Codes is a free five-hour annual course and will be held next on March 23, 2013 at Wills Eye Institute in Philadelphia. It is the only such national course that offers CMS training for ophthalmology. Contact: Lucia M. Manes, department of continuing medical education, 215-440-3168, or at firstname.lastname@example.org
► CMS Web site: www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/recovery-audit-program
► AHIMA link: www.ahima.org/resources/rac.aspx
||Riva Lee Asbell is a nationally recognized consultant on coding and compliance issues. She can be reached at email@example.com or through her Web site: www.rivaleeasbell.com
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