Medical Billing Audits
Medical billing audits can be performed either internally or externally. They are usually reviews of the coding accuracy of a medical office, as well as their billing policies and procedures. Audits are used to ensure the office is compliant, and to prevent and reduce fraudulent charges, particularly as they relate to Medicare or Medicaid.
If you or your practice gets an external notice for an audit, speaking with an attorney about your rights and obligations is always a good initial step. Audits can be a sign of something bigger going on, particularly if the Zone Program Integrity Contract (ZPIC) is requesting the audit, or sending you subpoenas to review medical charts. If you get this, you should contact a competent legal representative immediately.
Accurate billing can be difficult to achieve without taking several steps. Just being knowledgeable about billing and sending staff to billing courses, or using a reputable billing company sometimes is not enough. Conducting internal audits at regular intervals can go a long way to prevent fraudulent billing practices and triggering the curiosity of the federal government and its investigators, or massive private insurers.
If the audit reveals that the practice has engaged in overpayment of medical services, do not panic – it is not an automatic accusation of fraud. Many times, simple explanations like mistakes or clerical errors can cause the auditor to find overpayment, forcing the healthcare provider to repay said amount. However, this can get expensive, and so conducting internal audits can prevent unpleasant surprises. Sometimes, you may not learn that you have been audited until you receive notice of the overpayment, as these investigations are conducted primarily with a review of claims from the provider. Once you receive notice, take action as soon as possible by speaking to an experienced attorney, and ensuring that your documentation and charts are in order.
Audits are very often done randomly, but usually an audit occurs because of some warning signs that the insurer (or government) has noticed in their system. Some of these ‘red flags’ are high service volume practitioners (lots of patients going through their practice). Repeated use of the same medical billing code for multiple patients (especially in a row) can cause further investigation. Additionally, if the billing indicates a lot of extra services beyond basic and routine healthcare, an audit might be triggered. This could mean that the provider is overcharging for services they are not actually providing, receiving unearned money from the insurer, or government-based health plans.
This kind of behavior is a serious issue for taxpayers – the Government Accountability Office reports that in 2011, Medicaid paid over $21.9 billion in improper payments. A recent incident that has been highly publicized brings the issue with Medicaid fraud into stark focus: in June 2016 more than 220 people were arrested in conjunction with their role in over $800 million worth of Medicaid fraud. Many of these individuals were medical doctors or other healthcare professionals, engaging in fraudulent billing practices. External auditors are serious, and should not be taken lightly. If you receive notice of an external audit or external review, particularly from the ZPIC, seek out legal advice as soon as possible.