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How to Respond to Audits of Amounts Charged

Audits questioning the amounts charged by health care providers can come in many different forms—a provider could receive a payment denial from a Medicare Administrative Contractor (MAC), a request for post-payment review from a Recovery Audit Contractor (RAC), or notice of a comprehensive investigation by a Zone Program Integrity Contractor (ZPIC). All forms are serious, and should be handled carefully, since the mishandling of an audit request can cause significant financial loss for a provider.

A.  Who is the Auditor?

An audit request should be examined upon receipt to identify the auditor and any applicable deadlines. Identifying the auditor will help you to determine the type of audit. For example, RAC audits tend to be more serious than MAC audits, and ZPICs are tasked with investigating instances of suspected fraud, waste, and abuse. Once you have identified the auditor, determine the deadline for responding to the request, and if you need additional time, ask for an extension as soon as possible.

B.  Collect Your Documentation

The request will require certain documentation. You should identify the codes, claims, or practitioners that are the subject of the request, and compile the requested medical records.  Even if the amount of information and documentation requested seems manageable, begin compiling early—it will inevitably take longer than expected.

C.  Response Letter

In addition to submitting the requested documentation, you will want to submit a response letter. The response letter should make every plausible challenge to the audit findings.  If the auditor has determined that the claims were paid in error because there was no medical necessity, try to show that there was medical necessity. Consult the CPT Codebook, the relevant local coverage determination, the relevant national coverage determination, the relevant MLN Matters publication, and other guidelines. It may also be beneficial to retain an expert, who can attest to the appropriateness of the codes billed.

D.  Negotiation and Appeal Options

If the auditor’s determination is negative, there are appeal options. Unfortunately, the success rate for appeals is low, and re-filing will incur additional costs. Therefore, it is important that the initial response is thorough. Keep in mind that Medicare auditors are often paid on a contingency fee basis, so auditors want to collect as much as possible with as little effort as possible. Use this to your advantage—do not be afraid to negotiate.

E.  Payment Plans

Finally, there are payment plans available. If you decline to appeal, you may file for an extended repayment schedule (ERS). An ERS allows you to repay the overpayment over time if a “hardship” would exist in making the repayment. A hardship exists when the outstanding repayment (including interest) would be greater than ten percent of the total Medicare payments made to the provider in the previous calendar year. An ERS may be requested for up to a sixty month repayment period. The longer the repayment period, the more documentation is required to prove the hardship.

Leslie M. Cumber
410-576-4248 • lcumber@gfrlaw.com

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Date

01.03.19

Type

Publications

Authors

Cumber, Leslie M.

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