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Types of Medicare Audits and Issues That Rouse Suspicion

by | Jan 6, 2015 | Articles, Resources | 0 comments

Medicare audits are conducted to make sure that the right beneficiary receives the right payment at the right time, and they are very important for healthcare providers who manage and process their Medicare claims. The main aim of the audit is to check whether a particular service was in fact provided, whether the provider, patient and service were eligible for benefits, and whether the service provided met the item requirements. There are mainly three types of audits — Recovery Audit Contractor (RAC) audits, Certified Error Rate Testing (CERT) audits and Probe audits. Mistakes in medical documentation, coding and billing can rouse Medicare’s suspicion during audits, which can lead to claim denials. Let’s take a detailed look into audit types and the practices that trigger suspicions.

Audit Types

* RAC Audits – RAC program was developed as a part of the Medicare Modernization Act of 2003 to reclaim money by conducting retrospective reviews of fee-for-service (FFS) claims. The country is divided into four regions for this initiative and each contractor performs audits in a specific region to receive payment based on the amount he or she recovers. RAC audits focused on the site of care and up-coding earlier and now increasingly address medical necessity.

* CERT Audits – As per the Centers for Medicare and Medicaid Services, CERT audits are conducted on an annual basis using a statistically valid random sample of claims. The auditors review the selected claims and determine whether those claims were paid properly under Medicare coverage, coding and billing rules.

* Probe Audits – This type of audit targets either particular services or particular specialties. There must be certain criteria with a particular probe and if you meet those criteria, the auditors will pull a sample of your submitted claims for review before the payment. After that, you will receive a request for additional documentation with a deadline for providing the information. If you fail to comply with the request, you will not receive reimbursement for the submitted claims. Even if you comply but the documentation doesn’t support what you billed for, you won’t get reimbursement. If the audit finds anything fraudulent within your claims, then your Medicare Administrative Contractor (MAC) will refer to the appropriate agency for further investigation on your case.

Documentation Issues

Healthcare providers must comply with CMS requirements for documenting the services provided in order to receive the correct reimbursement. Here are some issues with documentation that may cause Medicare to get suspicious of you.

* No sufficient documentation. Patients’ medical records should clearly define the admission status (inpatient or observation care), patient’s principal diagnosis, medical co-morbidities, severity of the illness, intensity of the service/care provided; and date and time of service.

* Certifications missing in a patient’s plan of care

* Illegible, reproduced or missing signatures of physicians

* Post-denial modification to the documentation

* Failure to provide relevant records to Medicare upon request

Coding Issues

The common coding errors that may trigger Medicare to view your claims as fraudulent are as follows.

* Up-coding – It is the practice of using a billing code (more common while using Evaluation and Management code) to reflect a level of medical procedure that has a higher reimbursement than the level of service provided.  For example, a physician examines a patient briefly for a simple matter, say cold, but submits a claim for a complex visit that lasted for an hour.

* Unbundling – It is the practice of using two or more Current Procedural Terminology (CPT) codes instead of a single, all-inclusive code in order to receive a higher reimbursement.

* Improper Use of Modifiers – Though modifiers tell about a particular circumstance to payers, they may randomly add these modifiers due to misunderstanding and incorrect information and this may result in fraudulent claims. For example, physicians cannot separately bill for E/M services provided on the day of the procedure. However, they may use modifier 25 to indicate that an E/M service was rendered by the same physician for the same patient on the same day as another procedure. But this modifier is intended to be used to claim ‘significant, separately identifiable evaluation and management service on the day of surgery’ and improper use of this modifier on Medicare Part B claims will make Medicare think that you are using this to increase reimbursements.

Billing Issues

Some of the billing issues are:

* Duplicate billing in which services or procedures (provided) listed are charged more than once.

* Wrong name or insurance policy number

* Billing for one-on-one time while the patient was participating in the group therapy

* Submitting claims for services that do not meet Medicare requirements

* Billing for a duration that lies outside the norm for the service in question

* Failing to execute an advanced beneficiary notice of non-coverage (ABN) before rendering services that are not medically necessary

Tips to Address Medicare Audits

Healthcare practices can take the following steps to prepare for the audits and avoid claim denials:

* Clearly define your practice’s standards by developing comprehensive internal policies and procedures for documentation, coding and billing.

* Give proper training to your staffs regarding the changing Medicare requirements to achieve compliance or obtain help from professional medical billing and coding companies that keep abreast of latest changes.

* Conduct internal audits with your staffs to identify coding errors and take immediate actions to correct them before Medicare finds them. If you are running out of time, you can rely on professional coders. Internal audits are good for identifying billing errors as well.