How To Respond To A Medicare Audit

While undergoing a Medicare audit can be a stressful situation, this author emphasizes cooperation and documentation, and outlines key factors that commonly trigger an audit of one’s practice.

     You have been notified that you are about to be audited by Medicare. Do not panic. Audits are simply the cost of doing business. Many entities may audit you during the lifetime of your practice. Your practice may be subject to audits from insurance companies, health maintenance organizations (HMOs) and even the Internal Revenue Service (IRS).

     When you receive the initial letter, read it carefully to determine exactly what information they want. Send in chart notes for the specific dates of service requested as well as any other documentation that would support the services rendered on that day. This could include laboratory results, X-ray reports, photographs, consultations from other physicians, etc.

     When reviewing the audit letter, especially if the letter requests multiple charts, see if there seems to be some type of underlying theme in the chart notes. Were the requested patient charts those of nursing home patients, surgical patients or routine foot care patients?

     It is very important not to alter the record in any way. If you do remember additional information, create an addendum that you should clearly mark as an addendum. Sign and date the new entry.

     When sending the records, make sure you specify “return receipt requested” so there is no confusion as to whether the auditing body received the records in a timely fashion or at all. If you do not reply to the audit notification, Medicare or other auditing agencies may impose fines/penalties or deduct money from future payments.

     When you are corresponding with these individuals, ask what their timeframe is to get a response. Often if the response is favorable to you, you may not hear back from them at all. At least you have an idea of the timeframe.

     When corresponding with the auditing agency, please try to be polite even though this is a stressful situation. Be professional in the discussions or correspondence with these people. Ranting and raving will not help the situation at all. These people are trying to do their job as well.

     If you find that the review of your records during the audit process is unfavorable to you, there is an appeal process, which should be outlined. Read this appeal process carefully. Generally, there will be a timeframe mentioned. You must respond within this timeframe or you may lose your appeal rights. If additional information is requested or becomes available, send it in as well.

A Guide To The Various Kinds Of Audits

     There are several types of audits that you might be subject to: CERT, RAC or a formal audit.

     The Carrier Error Rate Test (CERT) audit is a single chart audit, which may date back two to three years. This is more of an audit of the Medicare carrier than of the physician. However, you will be asked to refund any overpayment. This is a way to check to see if the carrier processed the claim correctly. The auditor may select certain CPT codes for review. If the claim was processed incorrectly, generally any monies that one will ask to be refunded will pertain to that one single claim. A broad scale audit does not evolve from this type of audit.

     If you disagree with this review, you can appeal. The appeal goes through your Medicare carrier. Medicare carriers encourage physicians to appeal such negative reviews so the Medicare carrier has an opportunity to defend its processing of the claim. Many doctors will not bother to respond to such an audit as the amount of money in question may be minimal. A “no response” is deemed to be an “error” in the claims processing. If the error rate is high (even though it may be solely the result of no replies to the CERT inquires), Medicare may impose steps to “correct” this presumed problem. This could result in more bureaucratic hassles for claims submission of these codes. The bottom line is that one should respond to audit requests.

     The Recovery Audit Correction (RAC) is an audit from an outside agency. This also generally tends to be a single chart audit. These agencies may audit records that a carrier does not have the funding or the time to pursue. These may be CMS generated audits. Unless the audit finds something egregious, generally these are limited based audits as well. Similarly, physicians have appeal rights with these types of audits if they disagree with the final outcome.

     A formal audit generally will involve a request for charts, which can range from 10 to 30 charts. When you are first informed of such an audit, contact an attorney. Many malpractice carriers will offer administrative defense in such cases. At this early stage, you will still need to submit the requested records for review. If the carrier has made a negative determination, the attorney will step in to offer any type of defense assistance for the physician. If you use the services of a private attorney, make sure he or she is well versed in medical issues, especially as it pertains to billing/ coding and chart audits.

     There are several levels of review in an audit all the way up to an administrative law judge hearing and even the federal court system.

What Circumstances Can Trigger An Audit?

     Audits can have a silver lining. Obviously they are very stressful, especially if the outcome is unfavorable. However, they can offer tremendous amounts of information and educational opportunities for your office. What are some common triggers of audits?

      • Excessive use of specific CPT codes. Sometimes excessive use of certain ICD-9 codes may also trigger audits. This is very common with routine foot care services, wound care and services rendered in nursing homes. Generally, doctors who are outside the norm with regard to billing practices may get flagged on internal carrier audit screens.

     If your practice tends to be more specialized (perhaps you specialize more in wound care), you will, by the nature of your practice, be billing certain codes more frequently than the other doctors in the community who have a more broader-based practice pattern.

     Do not be afraid to bill for specialized services. Just be extra careful in the documentation. Do not alter proper billing protocols just to try to stay under the radar. Bill for what you did and let the chart defend you.

     • Codes for the use of new technology. You may have changed your practice patterns to become more specialized. Perhaps you have added new diagnostic or therapeutic machines to the practice. If this happens, obviously you will have a higher profile of certain CPT and ICD-9 codes than other doctors and you will tend to stand out on a statistical basis. Again, the best defense is going to be rock solid documentation.

     • Upset patients or family members of patients. Review billing practices if the patient had a bad outcome or received an unexpectedly large bill and/or subsequent harsh collection practices pushed the patient over the top to launch a complaint that generated the audit.

     To avoid such problems in the future, make sure the patient knows upfront about the costs. Speak with the biller or collection service to alter methods of collections. Consider formulating a payment plan with the patient or allow patients to pay with a credit card. Consider adding this payment option to the office, especially since many credit cards offer rewards such as frequent flyer miles, which might help mitigate the sting of a large bill.

     • Disputes about actual time spent with the patient. Another common complaint is that the doctor did not spend enough time with the patient to justify what the patient may perceive as an excessive billed amount. Alter office protocols if the patients feel they are not being given adequate time with the doctor or they did not receive clear information.

     This can be both the cause of a financial audit as well as a malpractice claim. If patient complaints are the trigger for an audit, evaluate your office protocols to try to address this problem. Again, try to make this a positive learning experience for your office staff.

     • Upset staff. An upset staff member (or even a patient for that matter) may simply try to get some measure of revenge and there may not be much you can do to offset this. However, reviewing employee policies may help reduce the likelihood of this happening. Have regular office meetings to review policies and address small issues before they escalate to large ones. Make everyone in the office feel like part of the team, not just a wage earner.

     • Statements from referring doctors. A patient may misinterpret an inadvertent statement or misstatement by another doctor.

     Make sure you clearly understand proper billing protocols and deliver treatment within the standard of care. Make this an opportunity to educate yourself with standard of care and proper billing practices. This is especially true if the audit seems to focus on specific CPT codes or your practice billing style.

Emphasizing Proper Documentation

     • Attend good seminars to learn the rules. Avoid those seminars that tend to focus on simply trying to increase revenue. If you bill correctly, the revenue will follow. I have seen doctors trying to up-code certain services only to forget to bill for other codes they could have legitimately billed. Had they billed properly in the first place, they would have ended up making more money than they would have in trying to play billing games that were readily obvious on review.

     • The best way to avoid audits and to defend yourself in an audit is to document properly. While this is time-consuming and can be quite frustrating, proper documentation is the best defense. Sloppy notes will not help and will reflect poorly on you.

     For evaluation and management (E/M) services, make sure the history component, examination components and decision-making components are clearly documented. Remember that for an initial visit, all three of these components must be at the same complexity level or you must drop down to a lower level. For a follow-up visit, only two of three components need to be at the same level of complexity.

     Do not base the level of E/M service billed upon the eventual diagnosis. A patient with diabetes, peripheral vascular disease and an infection does not automatically qualify for a higher level of service if the chart note is only three lines long. If you want to bill for higher-level codes, you must adequately meet the specified documentation requirements.

     For procedures, document where lesions/complaints are, what you injected/aspirated and where, what materials you used and how you used them.

     For diagnostic studies, make sure the quality of the test meets accepted norms. For example, if you are performing a vascular study in your office, the quality must be comparable to any outside vascular lab. You must also make a formal report/interpretation.

     For services such as physical therapy that may be based upon time, make sure to document treatment times.

     • Lastly and more importantly, the chart should document the medical necessity of each service/procedure/diagnostic test you rendered. Just because you did it, it does not mean you should be or will be paid for it. Performing “rule-out” diagnostic studies in the absence of proper clinical findings or taking bilateral X-rays on every patient regardless of diagnosis is not justified. This will only serve to increase your utilization pattern and ultimately trigger an audit.

Are You Going Overboard With Template Shortcuts?

     • Be careful with the use of templates. Although templates are acceptable charting methods, they can look very repetitive, especially when it comes to routine foot care and nursing home services. Each chart note should clearly reflect the chief complaint, history, examination and treatment you rendered on that date for that patient.

     Cutting and pasting templates/macros from previous dates of service and simply using that verbiage over and over again in subsequent chart notes does not necessarily indicate what happened on that date of service. It simply adds unnecessary bulk to the chart. At face value, it may appear to be an exceptional chart note but once the information from previous chart notes is factored out as “filler,” the resultant chart note is quite scant.

     • You cannot bill a higher E/M level service for all of that old “filler.” You can refer back to previous chart notes and state that there has been no change in past medical history or examination to augment the current chart note. This is very common in routine foot care situations in which one sees patients repeatedly over many months and there is no significant change in their examination.

In Conclusion

     Instill good office policies that address both your patients’ and staff’s best interests so you may offer top quality efficient care. Audits happen to us all. It does not necessarily mean you are a bad doctor. Turn this negative situation into a positive learning experience to correct any legitimate problems that the audit may uncover as well as to minimize the chance of future audits.

     Being pigheaded and continuing to bill improperly will not help you. The auditing entity may still be monitoring your subsequent claims to see if your billing practices have actually changed.

     If you truly believe that you have billed properly but lost in the audit/appeals process, then you should contact your state podiatry association and enlist its help. Perhaps the insurance carrier involved may itself be misinterpreting CPT or other coding standards. The state association will have more clout than a single individual when dealing with an insurance carrier.

     Dr. Poggio is a California Podiatric Medicine Association Liaison to the National Heritage Insurance Company and a medical consultant to Health-Net Insurance Company. Dr. Poggio is a member of the American College of Podiatric Medical Reviewers and is board-certified by the American Board of Podiatric Medicine and the American Board of Podiatric Orthopedics.