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    Medicare audit? You can handle it


    Medicare audit? You can handle it

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    An audit needn't be a trial by fire you may fear. But how you and your staff respond may determine whether the audit turns into a sparkler or an inferno.

    By David Glaser, JD

    You have to take a Medicare audit seriously, because each one has the potential to result in a significant overpayment assessment, but they are not cause for undue alarm. When handled properly, they often have a minimal impact on the practice.

    Most Medicare audits are conducted by a Medicare carrier and fall into one of two broad categories: a review of claims before Medicare pays the physician, and an analysis of claims after payment. Prepayment audits, the most common type, are random sweeps in which carriers typically want to look at only one or two claims from each physician.

    "Focused" reviews are the simplest type of post-payment audits. Mostly, the carrier is just trying to educate a physician about a problem with his coding. Still, the carrier may sometimes ask a doctor to refund an overpayment. In some cases, the doctor may be required to submit documentation with every future claim.

    In a comprehensive review, the carrier goes over a small sample of claims and uses the results to calculate a projected overpayment for a period of months or years. Since the initial analysis isn't statistically valid, the carrier will usually give the physician three choices:

    • Pay the assessment
    • waive all appeal rights and submit evidence to prove the assessment is wrong
    • have the carrier examine a larger sample of charts while leaving the physician the right of appeal.

    I strongly recommend this last option: The carrier's assessments are often wrong, and there's no reason to give up your right of appeal.

    One indication of the scope of the audit is the number of visit notes requested. You needn't be too concerned about a request for one chart. A request for five or more, on the other hand, suggests that the carrier is seeking a pattern of miscoding. If it finds one, overpayments can run into hundreds of thousands of dollars; in rare cases, they may result in criminal or civil penalties. That's why you need to be prepared.

    How to respond to a carrier's request

    If you receive a letter from your Medicare carrier requesting a number of charts, contact your attorney immediately and fax him or her the letter. Your attorney should hire a coding expert to review the charts, preferably before you submit them to the carrier. If the expert can't complete the review before the carrier's deadline, either ask for an extension or simply have the expert conduct his review at the same time that the carrier does. Your attorney should have the review done under the attorney work product privilege so that the results will be confidential.

    Review all charts before you submit them to the carrier. Be certain to include everything that could support your claim. For example, if a history refers to an earlier note, send the earlier note. If you're missing any documentation supporting your claims, add a clearly labeled and dated addendum, or include an explanation in your cover letter. Don't downcode a claim just because the documentation is inadequate. If the code accurately describes the work done, the law supports the logical presumption that you should be paid for it.

    If it's the Medicare carrier that's conducting the audit, the entire transaction will probably be conducted by mail. But sometimes, either the carrier or a government agent (from the FBI or HHS Office of Inspector General) will contact you in person. The agent may also visit your office staff, colleagues, and even patients (see "What to do when an investigator visits").

    Such direct contact from a government agent is not a good sign. It means you might have to face a civil suit or even criminal charges down the line. But fortunately, it's a rare event. Most of the time, an audit simply means being asked to provide some documents.

    Don't panic, just stick to your guns

    Almost everyone thinks that if you have any documentation problem, you're going to have to cough up money and maybe go to jail. But, in fact, the Medicare laws do not require that a service be documented in the medical record in order to be reimbursed. Nor are you legally required to use the documentation guidelines. The law only requires you to furnish information to show that you provided the service. So billing for something that isn't charted in the medical record isn't, in and of itself, fraud—if you provided the service.

    How do you prove it? Obviously, recording everything you do and using the E&M documentation guidelines is still your best defense. But if you haven't done this, you have other options. In a letter (or through testimony, if you end up in court), you can explain what you did but failed to record. Did you review the patient's history but fail to sign the form? Did you chart by exception, noting only positive findings? If a hearing officer or judge agrees that you did the service, you won't have to refund anything to the carrier.

    If your production is comparable to that of your colleagues, that can be excellent evidence in your defense. Let's say you have the same number and types of visits as do most other physicians in your specialty. That strongly suggests you did the work you coded for. By contrast, if your production is much higher than your colleagues' volume, watch out. It will be much harder to convince a judge.

    Appointment books can also help substantiate your claims. How long an appointment lasted can provide evidence that the visit was properly coded. For instance, say a visit was booked for half an hour. Since the typical time for a 99214 is 25 minutes, that's strong evidence that a 99214 was the appropriate code. Other physicians and nurses can also be helpful in establishing the amount of time you spend with patients.

    Finally, it's important to remember that Medicare carriers aren't always right. For example, many carriers claim that doctors have to sign every chart, but that's not in the Medicare regulations. Whenever a carrier seeks to recoup money, make certain that it cites the rule or law supporting its analysis.

    Even if the carrier can point to a written policy, there's a real possibility that the policy is invalid. Carriers regularly create policies that conflict with the Medicare statute or regulations. Since it's difficult for you to tell which policies are invalid, it helps to work with an attorney who specializes in this area.

    Medicare carriers can be very intimidating when they demand documentation from you. But if you stay cool, know your rights, and get professional advice, you shouldn't let an audit ruffle you. It might be inconvenient, but it needn't hurt you or your practice.

    What to do when an investigator visits

    The impression you make on investigators or reviewers can be crucial. It can even spell the difference between having the investigation closed vs facing criminal charges. Before entering such an important discussion, it's wise to work with your legal counsel so that you are fully prepared for the discussion and avoid hidden traps.

    You should prepare your staff for the possibility—however remote—that an investigator might approach them at home. You can't forbid them to talk to an agent: That could be considered obstruction of justice. You can, however, inform them of their rights. Staff members should know that they don't have to speak to the investigator, and if they do, they can have a lawyer present. They should know that it's legal to tell you if they're contacted by a government agent. You should also offer to provide them with a lawyer.

    Neither you nor a staff member should consent to be interviewed without a lawyer present. If an auditor visits or calls you, just tell them you're busy and that you'll get back to them. You should also ask them for proof of identity.

    The dangers of talking to an agent without an attorney aren't always obvious. For instance, the seemingly harmless statement that "my lawyer told me it was okay" may invalidate attorney-client confidentiality and allow the investigator to paw through your attorney's entire file on you.

    You should also consult an attorney before discussing any investigation by the FBI, OIG or other agency with your partners. If it appears that your group agreed on how to interact with the agent, you could be charged with obstruction of justice. The same goes for coaching staff members or patients on what to tell investigators.

    The author is a health care attorney in Minneapolis.


    David Glaser. Medicare audit? You can handle it. Medical Economics 2003;2:53.

    David Glaser, JD
    The author is a health care attorney in Minneapolis.

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