Preparing for the Next Surge in Claims Audits
With the COVID-19 audit pause well behind us, multiple indicators show CMS is quickly resuming audits in a big way.
- By Kelly Grahovac
- Aug 01, 2021
It has been nearly 17 months since the Centers
for Medicare and Medicaid Services (CMS) declared COVID-19 a
national emergency, and with that declaration, a variety of waivers and
flexibilities were put into effect that allowed health care providers to adequately
care for patients amidst a pandemic. Of these was the halting
of all CMS audits for Medicare and Medicaid claims.
In August of 2020, CMS reinstated audit program functions and
instructed the MACs to conduct audits on a post-payment basis for
claims with dates of service prior to March 1, 2020. At that time, CMS
described the return of audits as a “toe in the water” approach, alluding
to the fact that audit activity would have a slow start.
What followed that announcement in late summer of 2020 was
the MACs revisiting the “pre-TPE audit” days, initiating widespread
probe reviews on post-payment claims. The product categories weren’t
unfamiliar, with orthotics taking center stage. Since then, other familiar
product categories such as manual wheelchairs, surgical dressings and
urological supplies have been added to the list, as well as some outliers,
like osteogenesis stimulators.
Things Are Ramping Up Fast
However, while the MACs were continuing to audit the pre-pandemic
dates of service, the RAC and SMRC jumped in, with no exclusions on
pandemic claims and with no exemption of claims in the respiratory
category. In fact, in October of 2020, the SMRC was conducting a review
project on ventilator claims, at the direction of the CMS’ Program
Fast-forward to June 3, 2021, when CMS announced that MACs
could begin conducting post-payment reviews for dates of service on
or after March 1, 2020. Essentially, everything is fair game at this point,
but the pandemic health emergency (PHE) rules (i.e., waivers and flexibilities)
are still applicable, as the PHE was extended another 90 days
and likely will be again through the end of this year.
In addition to the MAC and SMRC audits, the RAC has shown an
increase in audit activities, as have the UPICs and most state Medicaid
plans. Commercial plan audits have also been on the rise, though they
were under no directive to cease or slow audit functions at any time
during the PHE.
It appears that audits are back and accelerating at a pace most of us
in the industry haven’t seen since 2017 and the emergence of the RAC
Other Factors at Work
What else is contributing to the fast-paced audit program activities?
The soon-to-be eliminated backlog of appeals pending at the Office of
Medicare Hearings and Appeals (OMHA), which is required to have
the backlog resolved by 2022. Efforts to reduce the backlog included
adding seven new OMHA offices and over 70 new administrative law
judges to the payroll.
Once the backlog is resolved, OMHA will be staffed to manage
approximately 300,000 appeals per year, and CMS will likely lift restrictions
placed on audit contractors, whose responsibilities are, in part, to
protect the Medicare Trust Fund.
Need further proof that we are preparing for an audit surge? The
President’s budget for FY 2022 also includes a $96 billion net increase
for the CMS, in which $2.4 billion is allotted for program integrity,
including the Health Care Fraud and Abuse Control Program and the
Medicaid Integrity Program.
In the budget brief, Medicare medical review is deemed a “top priority,”
in which “the collection and clinical review of medical records and
related information to ensure that payment is made only for services
that meet all Medicare coverage, coding, billing, and medical necessity
requirements.” The plan goes on to state that CMS “will increase the
percentage of fee-for-service claims subject to medical review, which
currently stands at less than one-tenth of one percent”.
The brief also lauds the return on investment that CMS’s program
integrity efforts provide, yielding consistent savings of over $10 billion
annually. It’s evident that CMS will continue pumping considerable
amounts of money into program integrity functions, which includes
Six-Year Lookback Audits
Lastly, audit contractors have increasingly hinted to the use of six-year
lookback audits as a means for providers that have received improper
payments to refund overpayments due. These audits are especially
attractive to contractors because they require the provider to do the
work — determine the claims sample, conduct the review, identify any
overpayments, and refund monies.
Most recently, UPIC findings letters have included language that directs
providers to take actions of self-assessments and voluntary refunds
in instances where a high error rate was identified. Taking the return
on investment into consideration, six-year lookback audits seem like a
relatively inexpensive way to recoup overpayments to the program with
little incurred expenses.
All signs point to a surge in audits for providers that bill claims to
Medicare and Medicaid. The best preparation an HME provider can
take is to adopt a proactive approach, including an internal audit and
compliance program. Knowing what your claims data looks like before
someone else finds it is key to keeping your money in house, and to
protecting your investment.
This article originally appeared in the July/August 2021 issue of HME Business.
Kelly Grahovac is the General Manager of The van Halem Group (vanhalemgroup.com), which offers audit and compliance support solutions to HME providers. For details on how The van Halem Group can assist your organization contact her at Kelly@vanhalemgroup.com.