If a letter were to arrive at your organization in an innocuous-appearing envelope, you may be afraid to open it. It’s unsettling for a payer to request medical records for claims that have already been paid. It is becoming more and more common for providers to receive what appear to be innocuous medical records requests from both federal and commercial payers. In fact, the worst thing you could do is not open the letter. Requests for medical records are a common occurrence, and your response can make a huge difference in the outcome and impact to the practice.
These requests are typically based on data analytics available to the payer that identify the provider as an outlier in some respect. Payers use the analytics to look for potential overpayment issues. Unfortunately, most providers do not understand the significance of these requests and the impact that an incomplete response can have on a future potential overpayment demand and/or possible imposition of a payment suspension by Medicare or a commercial payer. Unified Program Integrity Contractors (UPICs), operating on behalf of Medicare, can reopen claims for good cause pursuant to 42 CFR 405.986. Commercial payers usually have similar contractual provisions that allow them to reopen claims or seek reimbursement of claims that the payer believes were improperly paid.
What triggers an Audit?
The biggest mystery in the audit process is its origin. Often, no discernible reason ever emerges as to why a provider has been selected for an audit. However, there are some common circumstances which often lead to an audit like mentioned below:
Computer monitoring of practice patterns:
A higher-than-average use of certain procedures and the existence of outlier payments are probably the most common audit triggers. Periodically, some third-party payers compare utilization patterns among physicians with similar practices in the same geographic area. Additionally, an audit may be triggered if a practice’s billing patterns or reimbursement amounts change substantially over a short time. Yet there could be a perfectly reasonable explanation for the increase, such as the purchase of a new piece of equipment.
Complaints from patients frequently will trigger audits or investigations. Patients may complain to payers because of a misunderstanding about their Explanation of Benefits (EOBs). In the case of both employees and patients, it is important to listen and respond to any billing concerns.
Audits are part of the business of health care, so everyone is at risk. And even if the circumstance that triggered the audit proves to be wrong (e.g., unsubstantiated patient complaints or comparisons to the wrong peer group) it’s tough to stop an audit once it is in motion.
Know What You’re Dealing With
After you restore your composure, verify the nature of the “audit.” Every payer you bill has reason to audit and a process to do so, but not every medical record request is an audit. Understand which entity is ordering records and for what purposes.
For example, Medicare Advantage plans perform data verification reviews, which are essentially reviews of diagnosis documentation to verify billing and to identify missed diagnoses. These do not usually review CPT coding. By contrast, Comprehensive Error Rate Testing (CERT) reviews are intended to review the performance of the Medicare contractor; however, if it’s determined that a claim was paid incorrectly, the money goes back to the contractor.
How to approach Audit?
- You should carefully prepare in advance with counsel for your conduct during the audit. Some general guidelines to follow during the audit include:
- Sequester the auditor in an area outside of normal business operations.
- Provide the auditor with the complete medical record at the commencement of the audit in order to minimize requests for any additional information.
- Under no circumstances should medical records be altered, fabricated or back-dated. Existing information, including previously dictated notes and test results, may be placed in the file pursuant to normal office practices.
- It may be beneficial to request an entrance conference. Although entrance conferences are not common, they can be helpful in limiting the scope of the audit.
- Designate one individual in the office as the contact person, preferably the billing supervisor or someone familiar with the office’s billing practices. Before the audit, this person should discuss with counsel how to answer any questions.
- Do not provide the auditor with more information than requested. Auditors do not have the right to review office financial statements, tax returns or other official records. Generally, they only have the right to see billing and medical records of the patients covered by the payor conducting the audit.
- Ask the auditor to put his or her questions in writing then have counsel review them. Treat questionnaires presented by the auditor the same way.
- Request that the auditor provides you with an exit conference. This is not the time to “plead your case,” but to just listen to the auditor’s remarks. A staff member should be present to document the information provided by the auditor.
Calmly handle records request
The physician agrees to provide medical records when requested, both within the provider contract executed between the practice and the payer, and as part of the submission of the claim itself. To uphold this agreement, you must send the requested records within the time frame given. Send what is requested; it’s not generally a good idea to send more than what was specifically requested.
If you print encounter notes from an electronic health record, make sure all of the information is available in the printed documents. For example, documentation for injection administration may not be contained in the encounter note: You may need to print additional screens to provide documentation to support all billed services. For incident-to services, you may need to send documentation from an earlier visit at which the physician established the plan of care. If the request applies to services rendered in a hospital or nursing facility, you’re responsible for providing the documentation, even if you do not maintain or have easy access to the actual records.
Organize the records so the reviewer can easily find the necessary information. There are tales of someone responding to an Internal Revenue Services (IRS) audit with a shoebox full of receipts dumped on the auditor’s desk. That doesn’t work with the IRS, and it won’t work with a payer audit, either. Don’t even think of ignoring the request: Failure to respond gives the payer the right to rescind payment.
What happens next?
Within months or sometimes years, the provider will receive a letter that sets forth the findings. In addition to setting forth the amount of overpayment, the letter usually contains an overview of the payer’s rationale. Typically, the payer will demand a refund of the amount within 30 days. The audit packet should also include a listing of services the auditor reviewed and his or her decision on each service. If the audit does not result in an overpayment, the provider may never receive any communication from the third party payer. Communication that indicates a finding of no overpayment whatsoever is extremely rare.
When in doubt, call for help
Consider whether to engage an attorney. If the issue could result in significant financial impact, consider having the records reviewed by an independent auditor. An internal review is the first step, but having an “outside eye” review these records can be invaluable. Independent auditors perform many such reviews for providers, and often they can advise on appeals strategy. They also can identify issues you are not aware of.
Consultants can advise on appeals, and sometimes they have to tell the practice to get out their checkbook and to just be glad it’s not more. Depending on the circumstances, it may be wise to have such reviews conducted through the practice attorney so the findings may be protected under attorney/client privilege.
It’s an opportunity
An audit, or simply a records request, can be a learning experience for you and your providers. After you’ve cooperated with the payer request, conduct an internal review and begin correcting any issues you identify and educating providers, as necessary. If you have questions about audits or have been notified of one, Medical Billers and Coders (MBC) can help. Feel free to call us at 888-357-3226 or write us at info@ medicalbillersandcoders.com