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Being a Medicare provider means opening your practice up to government monitoring and possible audits.
Medical practices often enroll as Medicare providers to ensure access to essential services for aging and disabled patients. This enrollment, however, requires practices to agree to periodic monitoring of their documentation, billing, and claims submission. Like other insurance programs, Medicare has strict standards that determine provider reimbursement. To maintain uniformity and compliance within the program, Medicare routinely audits its enrolled providers.
Why is Medicare auditing my medical practice?
An audit can be unsettling, but it doesn’t mean that you’ve done anything wrong. What it might mean is that Medicare thinks that there may be a billing- or compliance-related oversight at your practice. Medicare selects practices for audit based upon its review of vast troves of data, and this process focuses on identifying outliers among its data. Medicare is typically looking for practices that utilize Medicare dollars at a higher rate than practices of a similar scale or that offer similar services. For example, if most Medicare-enrolled psychiatrists submit an average of 50 claims per week, but your practice submits an average of 150 claims per week, you may be flagged as an outlier worthy of further scrutiny. And even if you’re not an outlier in Medicare’s data reviews, you may be selected for an audit because a patient, employee, or contractor filed a complaint that raised concerns about your documentation, billing practices, or general compliance.
Are some practices at greater risk for a Medicare audit?
Medicare is the country’s largest insurance program, and the government spends considerable time and resources to ensure that program participants follow the rules. While any participating provider can be audited, certain factors heighten the chances of being targeted for an audit.
In addition to practices whose data is flagged as an outlier or about which Medicare receives complaints, other audit risk factors include:
- Being an exclusively telehealth-based practice with no in-person care,
- Experiencing rapid growth (which means a rapid increase in the number of claims filed) or a rapid expansion of your services (which might mean a rapid increase in the types of claims filed),
- Having inconsistent documentation practices,
- Engaging in a high-risk medical specialty like psychiatry, cardiology, or pain management.
However, just because one of these “risk factors” applies to your practice does not mean that you’ll be chosen for an audit. Sometimes, practices targeted for an audit are truly random – for example, they may be selected from a pool of providers in a specific region that provided a specific service. Regardless of the reason why you’re being audited, it’s crucial that you respond promptly and appropriately.
What is Medicare looking for?
Typically, Medicare audits seek to determine whether the claims submitted to the program meet its standards and are appropriately reimbursable. Medicare wants to ensure that the services provided are medically necessary, properly documented, correctly coded, and appropriately billed. A failure in any of these areas may be cause for Medicare to seek repayment of funds paid out to the practice. It is not uncommon for missing signatures, insufficient documentation, and transcription errors to result in repayment demands, even if the appropriate care was provided.
How do I respond to Medicare when it audits my practice?
After you receive the first records request letter from the Medicare program, you should immediately hire a healthcare attorney to guide you through the response process. Many medical practices are diligent and methodical in their record-keeping and billing practices, and believing that they have nothing to hide, they quickly respond themselves to these records requests. However, it is crucial that the documents you submit to Medicare in response to this request first be carefully reviewed by your attorney. If there are potential compliance or documentation issues that have been overlooked by your practice, it’s better to know that before you’ve handed them over to Medicare.
Our team’s approach to Medicare audits involves carefully analyzing Medicare’s specific request to limit the production of records and ensure that Medicare receives only the information requested and nothing more. If you go it alone, there is an increased risk of overproducing records, providing explanations for issues not expressly mentioned in Medicare’s letter, and making admissions in a response that increase legal exposure. The last thing you want to do is broaden the scope of Medicare’s inquiry into your practice!
Possible consequences of an audit can range widely from corrective action plans to criminal prosecution.
Medicare often audits a practice to recoup what it believes to be overpayments that it made to the practice. In some circumstances, Medicare may require the medical practice to develop a corrective action plan or undergo a prepayment review process, which requires that each of the practice’s claims be individually reviewed for compliance. In some cases, Medicare may suspend the practice from Medicare, allege that the practice is engaging in fraudulent activity, or refer the practice for disciplinary or criminal action. In extreme cases, Medicare may bring civil or criminal charges. Because of the varied possible consequences of an audit, it is imperative that a practice’s legal response is measured, carefully tailored to the request, and complete.
Retain a healthcare attorney immediately if you’re audited.
To improve the chances of resolving your audit with minimal consequence to your practice, it is important that you retain legal counsel immediately. If you notice discrepancies in your own documentation or billing – even if you haven’t been audited – it’s also a good idea to hire an attorney to walk you through how to resolve that situation.
Experienced healthcare lawyers can help protect your rights throughout the audit process, evaluate the audit’s scope and direction, and prevent you from making unintentional admissions that could lead to additional legal exposure. If you operate in one of the states where we are licensed, set up a free consultation call to discuss how we can assist you in responding to a Medicare audit.
This blog is made for educational purposes and is not intended to be specific legal advice to any particular person. It does not create an attorney-client relationship between our firm and the reader. It should not be used as a substitute for competent legal advice from a licensed attorney in your jurisdiction.
