Medicare Audits

Building a Rapid Response System

Starting in 2011, providers have been besieged by a barrage of documentation requests from pre- and post-payment audits that has held up tremendous levels of funding as those providers respond to those requests. Many of those audits have resulted in recoupments, and in some cases providers being put on 100 percent pre-payment audit. It is a nightmare scenario. However, providers are trying to put into place the business processes and tools that can, if not eliminate audits, at least make them easier to contend with. Perhaps the best place to start in forming a strategy for dealing with audits is to understand the various types of audits. There are three main types of audits:

Comprehensive Error Rate Testing (CERT). These are post-payment audits conduced by the conducted by CERT contractor (AdvanceMed). These audits randomly select a sample of approximately 120,000 submitted claims, and request medical records from providers who submitted the claims. The claims and medical records are reviewed for compliance with Medicare coverage, coding and billing rules.

Recovery Audit Contractors (RAC). The mission of these post-payment audits is to detect overpayments and underpayments, and to implement actions that will prevent future improper payments. RACs randomly select claims and reviews result from data analysis; they can’t audit claims simply because they represent a high dollar amount. These audits can go back three years from the date the claim was made, but can’t go past Oct. 1, 2007. These audits combine what is called “automated” reviews conducted by software systems, and “complex” staff reviews.

Zone Program Integrity Contractors (ZPIC). These very aggressive, specified audits can even result in the ZPIC auditors referring some instances to law enforcement agencies. The ZPICs also maintain a list of providers that require future monitoring based on past history. There are seven ZPIC zones covering all geographies served by Medicare.

Knowing how these audits work, providers can begin to examine how they will respond to those audits and how the processes they need to put into place going forward to ensure their claims will pass muster, and how to quickly response to auditor requests for documentation so thatthe hold-up on funding will be minimal.

Establish Documentation Requirements

Going forward providers must require the complete and correct medical documentation from all referral partners, and not process their claims without them. It’s just that simple. Providers should ensure their workflows conform to their documentation requirements, and not let a single claim go past a step without it having the necessary documentation.

That can be a tough pill to swallow for referral partners who suddenly find their patients aren’t getting the DME the need, and a tough bullet to bite for providers, as it can make even rock-solid partner relationships feel a little shaky, but it is absolutely necessary, especially when it comes to pre-payment audits. One slip up and the entire business could go on 100 percent pre-pay audit, which would be far worse than antagonizing a single referral partner.

Educate Partners

The key to avoiding soured referral partner relationships lies in educating your physicians. Create an in-service and other educational materials and proactively reach out to your partners to explain to them the Medicare requirements, as well as CMS’s ramped-up audit programs and make clear that it is in their patient’s best interest for them to provide the correct and complete documentation.

And don’t forget that there’s a very good chance that your referral partners are undergoing the same audit misery that your business is experiencing. So, with auditors reviewing your partners’ claims, there is a good chance that they will not only “feel your paint,” but understand that having that documentation on-hand will benefit them, as well.

Audit Yourself

An effective measure in ensuring that all departments are collecting the correct and necessary documentation, and are submitting problem-free claims is to ensure all elements he company are living up to the documentation requirements. That means conducting regular internal audits of all departments processing claims to detect and prevent problem areas is agreat way to protect yourself from an audit.

Leverage Technology

HME software and particularly the document management tools many of them offer are essential assets in helping HME providers more easily research documentation, store documentation, and respond to audit requests for documentation (read more on page 42). Documentation management systems easily store and access any and all documentation related to a claim or a patient. While it might not necessarily prevent an audit, what it will do is cut down the time required to respond to and address an audit when it comes up.

Moreover, providers can use the reporting tools offered by those software systems to help them conduct their internal audits. By looking at various trends in audit requests, as well as problem responding to those requests, providers can start to identify problem areas in their processes and fix them.

Points to take away:

  • In order to contend with audits providers must understand the audit types.
  • Implementing rigid documentation procedures for all claims is a must.
  • Educate referral partners of documentation requirements.
  • Conduct internal audits regularly to identify problems.
  • Leverage technology tools to assist you in that process, as well as to rapidly respond to documentation requests.

Learn more:

Recently, HME-Business.com hosted a webinar on how providers can win their audits on appeal, which was hosted by Medicare audit expert Wayne van Halem, president of The van Halem Group. This webinar is still available as an archive.

This article originally appeared in the June 2012 issue of HME Business.

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