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    Will a new anti-fraud campaign lead to more audits?

    Conduct your own periodic reviews to prevent errors, avoid unnecessary inquiries


    A government crackdown on healthcare fraud could trigger new waves of physician audits, financial experts warn.

    Fraud costs the U.S. healthcare system some $65 billion a year from Medicare alone, and the Affordable Care Act (ACA) gives the government greater authority to identify and prosecute fraud and abuse.

    In 2011, the government's Health Care Fraud and Abuse Control Program reportedly recovered nearly $4.1 billion in taxpayer dollars, according to the U.S. Department of Health and Human Services. And all signs point to an evolving and aggressive approach to capturing much more, especially considering the most recent federal task force bust that tallied up $430 million in false billing claims and levied charges against 100 individuals—including some physicians.

    The ACA provided the Centers for Medicare and Medicaid Services (CMS) with funding to adopt new tools and resources to better identify fraud and abuse. Sophisticated predictive modeling technology similar to that used by credit card companies, for example, will help CMS shift away from the reactionary "pay and chase" approach to one more preventive and able to identify fraud and abuse before money has been lost.

    You and other providers are understandably concerned about the possibility of an increase in erroneous audits. Anti-fraud efforts already under way have flooded the landscape with a host of government auditors—Medicare administrative contractors (MACs), program safety contractors, Office of Inspector General (OIG) auditors, recovery audit contractors (RACs), and Medicaid auditors, to name a few—increasing the likelihood that innocent providers will get caught up in their web, says Lawrence Vernaglia, JD, a partner with the Boston-based law firm Foley and Lardner LLP and a Medical Economics editorial consultant.

    "This is the future, and physicians better get ready for a lot more auditing and a lot more scrutiny of their claims submission," he says.

    The increased attention has an upside, however, says Dennis Jay, executive director of the Coalition Against Insurance Fraud. "One of the biggest things not said is if CMS and private health plans are even moderately successful in cutting out a percentage of money going out for fraudulent purposes, there will be more money to pay providers, and that's how providers should look at it," he says. "I really believe there will be less pressure to cut down on their fees."

    Glen Stream, MD, MBI, FAAFP, president of the American Academy of Family Physicians, agrees with Jay. "Collaboration will only help the people out there ethically practicing and highlight those conducting criminal behavior."


    The threat of an audit is greater for hospitals and large physician practices, where the dollar amounts are likely to be much greater than in small physician practices. In fact, a recent survey of 2,200 U.S. hospitals by the American Hospital Association (AHA) found that RAC audits dramatically increased during the past quarter, with medical record requests up by 22%. Nearly two-thirds of medical records reviewed by RACs did not contain an improper payment, according to the AHA survey.

    Although large healthcare providers are at greater risk, Stream says that independent physician practices need to be prepared for the potential of an audit as well. In some cases, he says, they may even have more to worry about than larger providers.

    "The challenge for smaller practices is, they don't have the same depth of financial and regulatory resources," Stream says.


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