Third Party Payer Medical Audits

One of the most significant financial risks for physicians, physician groups and medical practices is a third party payer audit, which can not only lead to significant financial loss but, in some cases, can lead to issues involving licensure and federal agency investigations. If your medical practice has received an insurance company’s notice or letter indicating that it will audit the medical and billing records regarding certain patients, there are very important steps to take to protect your interests. Our Atlanta and Augusta healthcare law firm advises and represents physicians and other healthcare professionals in medical Audits.

Atlanta Medical Audit Attorneys

In this day of dramatic healthcare reform efforts and increasing pressure on public and private payers to contain the costs of healthcare, medical audits are commonplace and likely to increase. There are a variety of medical audits that may apply to particular medical practice circumstances, including:

  • ZPIC Audits (Zone Integrity Program Contractors that review cases of suspected fraud)
  • RAC Audits (Recovery Audit Contractors that review cases of suspected Medicare overpayments)
  • OIG/DOJ investigations (the federal Office of the Inspector General and/or the Department of Justice may investigate and audit medical files and records for suspected criminal acts and omissions with regard to, for example, improper billing or referral arrangements).
  • Commercial Insurance Audits (Commercial insurers often audit medical practices by identifying specific patients for whom all medical and billing records are audited)

In the case of a commercial insurance company’s audit, an insurer or its auditor will often require your medical practice to produce extensive patient billing and medical data. There are varying methodologies that an insurer may employ to analyze data from a medical practice, but typically the approach is similar to some government audits. The records are often scrutinized by “coders” who have purported expertise in this field; however, because they often make mistakes or may be incentivized to find problems in your billing records, proper business caution warrants meticulous care in responding to the audit and advocating to the insurance company in support of your billing protocol and documentation. The auditor is looking for various compliance problems, such as, for example, absence of medical necessity, duplicate billing, inadequate or improper documentation/incorrect coding. From a random sampling the auditor will use an extrapolation method to deduce the scope of some alleged error(s) in your medical billing and record keeping.

While a comprehensive approach to properly handling any medical audit involves many details, critical basic steps include:

  1. Read carefully. Study the audit notice or letter and make sure you understand precisely what the letter requires.
  2. Deadlines matter. Take no deadline for granted. Timely respond in a complete way and be able to demonstrate that you have.
  3. Cooperate. Show the auditor you have nothing to hide by conveying a sense of cooperation and respect.
  4. Prepare your defense. Carefully document a cooperative, responsive approach that demonstrates you have fully complied with the auditor’s requests.
  5. Hire a consultant. Hire a qualified consultant or coding expert to scrutinize your medical and billing records, preferably from the same sample that is subject to the audit, to identify any potential problems.
  6. Comply with HIPAA. The flurry of activity that can follow an audit letter can be a distraction. At all times you must comply with HIPAA in every respect. For example, if you hire a consultant to review records, you must evaluate what steps are required to ensure compliance with HIPAA in connection with that consultant’s access to protected health information, including execution of a HIPAA compliant business associate agreement.
  7. Document. Make sure your production of records is fully compliant with the audit request and make color copies of all records produced. Every communication with the auditor, including email, should be carefully documented and stored.
  8. Know your rights. Carefully review your provider agreement. Understand and be fully versed in the appeals procedures authorized by your contract and/or applicable law. Meticulously calendar and plan for all deadlines.
  9. Contain communications. Designate a trusted person(s) to communicate with the auditor and limit communications. If there is any indication of suspected fraud, particularly in practice with Medicare patients, hire a lawyer before any communications and then conduct all communications as instructed by counsel.

An audit is not the end of the world and can be successfully defended. However, responding to an audit must be handled with care and proper caution.

With offices in Atlanta, Georgia and Augusta, Georgia, our law firm advises and represents healthcare providers throughout Georgia, South Carolina, and often in other states. If you have a question about a medical audit, to schedule a confidential consultation, email us at info@hamillittle.com or contact us at our office closest to you.