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How Medical Practices Should Respond to an Audit or Request for Documents

Payors audits are at an all-time high. Private payors employ third-party analytical firms to constantly run reports to find “outliers” and practices with coding aberrancies. While some audits are routine and pursuant to provider agreements, others could expose practices civilly and criminally.

In order to properly triage an audit and determine how to address it, it is recommended that every practice engage in “preventative medicine”:

Practice Policies and Procedures

Every practice must have an employee manual that addresses responding to an audit. A practice should designate someone as the audit contact person for all audit and document request letters. Many times audit letters are ignored or not given the proper importance, which leads to unfavorable findings and large overpayment demands.

If the audit appears to be routine in nature, prepare all documents responsive to the request and keep an identical copy for your records. In the event the audit contact person determines that the audit letter signals a looming overpayment demand or that it could lead to some exposure, notify your insurance company immediately. Many New Jersey medical malpractice insurers offer audit defense coverage that pays for experts and healthcare counsel fees incurred in defense of an audit and/or overpayment demand.

Certified Professional Coder

Certified Professional Coders (CPCs) are vital to a proper defense of an audit. A CPC will look at the findings of an audit and double check the insurance company’s findings. As coding is to a large degree subjective, particularly when it comes to Evaluation and Management (E&M) codes, many times an independent CPC will refute the findings of the insurance company’s reviewer. 

A CPC is also vital to determine things such as:

  • whether the practice received credit for any applicable downcode
  • whether the practice received credit for a different applicable code
  • whether education and training on proper coding is necessary going forward

Healthcare Counsel

Not all audits require the intervention of an attorney. Routine audits can be handled internally and without the need to obtain legal counsel or experts. However, a specialist healthcare attorney should be contacted in the following instances, which are not exhaustive:

  • When an audit letter contains words like “billing aberrancies” or “fraud”
  • When a practice is notified that it is on pre-payment audit
  • When an audit letter comes from a RAC auditor, the Medicaid Fraud Division or the Office of the Insurance Fraud Prosecutor

If a practice takes the time to engage in some “preventative medicine” and is prepared to respond to an audit, many of the common pitfalls that plague practices can be avoided and much of the stress and anxiety of going through an audit can be minimized. Contact Frier Levitt today to speak to an attorney.