Surviving a Payer Claims Review Audit

Blog | May 12, 2013 | By Martin Merritt

One of the primary differences between the food stamp program and government run healthcare programs, lies in the fact that utilization of the food stamp program can be controlled (a person can eat only so much food in a month.)

In fact, no one blinks at the idea of "rationing" food with coupons. On the other hand, there is no practical way to limit how much healthcare a person might consume, short of a coupon book. Naturally, if you want to start a "silver riot," try broaching the subject of rationing Medicare to seniors.

So, the government and private contractors approach the problem of rationing healthcare in a back-handed, often sneaky game of "gotcha," aimed directly at physicians and dentists who provide Medicaid benefits. Long after the money has been paid and the matter closed, even small physicians' practices are receiving letters with the seemingly innocent request to review "five files," just to make sure the chart is accurate. In reality, the auditors are looking for any way to demand repayment, even if the patient genuinely needed the care provided.

I recently spoke with Angela Miller, CHC, CMC, president of Dallas-based Medical Auditing Solutions LLC, on ways practices can survive a benefit review audit.

Martin Merritt: The audit process calls to mind the famous quote from Cardinal Richelieu: "If you give me six lines written by the hand of the most honest of men, I will find something in them which will hang him."

Angela MillerAngela Miller: If they read the "lines" at all. Auditors are typically looking for any excuse to demand a refund.  Physician’s handwriting is typically not legible. Often, an auditor will just ignore unreadable documentation. If the records are not legible, have them dictated and have the physician review and approve with an attestation statement for the records. Any amendments need to be done prior to submission of first level audit for best results. They could be done later but why go through multiple levels of appeals if you can win at level one.
If the records are not organized, the payer will not look for information. If the records are not legible, the payer will not try to read them. [Note: Never alter a record. You must identify any changes after the fact clearly with physician signature and date as of January 1, 2013.]

MM: Why not just pay the several-hundred dollar demand after an audit of the five files? It is cheaper than hiring a lawyer.

AM: Many clients just capitulate, and refund an overpayment request of a few hundred dollars because it costs less than hiring an attorney to fight the payer.  That’s the "trap." The client refunds the few hundred dollars, and then 14 months later learns the few hundred dollars have been "extrapolated" over the entire universe of files, and the bill is now, $75,000 or $100,000. Medicare is restricted to extrapolation 12 months from date of initial finding/overpayment request. There seem to be no rules for Medicaid, Medicaid contractors, or private insurance. This can be catastrophic to a small solo practice physician.

MM: Why do you encourage using a consultant and/or attorney, depending on the circumstances, to respond to audits?  

AM: Attorneys and consultants know what is going on in the industry with various payers which can be beneficial to helping the provider in the audit process. The payers are becoming very tenacious, so hoping for the best in an audit is "naive." Also fresh eyes can play devil’s advocate with questions as well as ideas for corrective action that would benefit the provider that could be implemented prior to submitting the first level audit.

MM: You emphasize the importance of winning as many as possible at the first level, why?

AM: If you respond to the initial audit/overpayment request within the first 20 days to 30 days that will prevent the requirement for payments on extrapolation until the appeal process is complete. This is critical, especially for small providers. The more you win in first level appeals, the more the error rate improves and the overpayment and extrapolation go down.  

MM: In closing, what point would you like to leave physicians with?

AM: Providers must be proactive. It is much less expensive and it will protect them from prepayment audits, extrapolations, and worse.  Payers are sneaky and relentless, because they have everything to gain and nothing to lose.

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