Podiatrists across the nation have been receiving letters from third-party contractors, Recovery Audit Contractors (“RAC”), who conduct audits on Medicare’s behalf. The RAC auditors will typically ask for anywhere from one (1) to twenty (20) charts, all focusing on a particular issue. The RAC auditors vary by the region where the practice is located, but they all share one thing in common: RAC auditors are incentivized to recover money for the Centers for Medicare and Medicaid Services (“CMS”). The RAC company has no incentive to have you pass the audit, so any questionable documentation calls will be made in favor of the CMS and a recoupment action. Auditors will often look for inconsequential reasons or minor technicalities to reject payment and issue an overpayment demand.
Triaging an Audit Letter
When receiving an audit letter, it is imperative that you contact a health care law firm; one with years of experience dealing with these matters. Law firms with attorneys that have clinical knowledge and work with vetted experts are crucial in defending audits as they understand the medical as well as legal issues involved.
It is helpful to review your patient records at issue to see if there is any commonality of services involved or any common issues that pop out. For example, if you see that most of the patients being reviewed are patients receiving wound care treatment, it is likely that the RAC auditor is focusing on wound care.
Wound Care Audits
Podiatrists have always been audited on routine footcare codes, braces, and custom orthotics. However, most recently, CMS has started to focus on wound care. Some frequently encountered reasons for RAC audits involving wound care are:
- Billing is under the wrong entity;
- Incorrect or inaccurate coding;
- Fragmentation; and/or
- Documentation does not support the billed service.
Billing Under the Wrong Entity
This denial reason may seem obvious, but often, it is not. Many times, a podiatrist will purchase a practice and its professional corporation, and subsequently decides to open their own Professional Corporation (“PC”) with a different corporate name and number. In this instance, we frequently find that the podiatrist continued to bill under a defunct entity prior to the new PC being credentialed. In these instances, the chronology of your credentialing to bill Medicare is crucial.
Incorrect or Inaccurate Coding
Every Current Procedural Terminology (“CPT”) code has its own definition and documentation criteria. It is crucial that your podiatric records incorporate the necessary elements to bill that code. Further details may emerge from an applicable local coverage determination provided by CMS. For example, in the case of wound care, there are both depth and width requirements that must be documented. Your records must reflect meeting all the requirements of the CPT manual, as well as governing local coverage determinations. These guidelines advise you as to how much you need to document. Merely stating “wound is improving” is generally not sufficient and could lead to an overpayment demand.
Fragmentation
Fragmentation of coding may involve billing for a level of office visit in addition to a debridement code. That is allowed only if there was a substantially different diagnosis that needed evaluation and treatment. If a large percentage of your patients have both a debridement code and an office visit code on the same visit, that is a large red flag for auditors.
The Documentation Does Not Support the Billed Service
Board of Medicine regulations nationwide require that a provider’s medical chart is detailed, accurate, signed and completed as soon after the visit as possible. Unsigned records can be one of those seemingly “insignificant technicalities” that causes the auditor to deny payment.
As previously noted, generic statements are usually denied as insufficient. LCD guidelines, the CPT manual, NCCI Edits, national coverage decision, and the CMS’ Internet Only Manual are all valuable resources to help you determine what needs to be documented. With wound care, many times providers leave out key information, or fail to sufficiently document how the wound is progressing.
Responding to the CMS
If the results of the audit warrant an appeal, there are four (4) internal levels of appeal. Success is difficult without appropriate legal representation and coordination with a vetted certified professional coder.
The first two levels of appeal are before the Medicare contractor who issued the original unfavorable audit findings and a Qualified Independent Contractor (“QIC”), respectively. There is a low likelihood of success in winning or significantly reducing the amount of money Medicare is seeking in the first level of appeal. During the QIC appeal, there is a greater chance of overturning some of the Medicare contractor’s findings, although many times they unfortunately rubber stamp the contractor’s findings. However, the QIC is vital as it is the last chance you have to submit evidence, including an expert report, before the record is closed.
The third level appeal involves a hearing before an administrative law judge (“ALJ”). The hearing is telephonic and can last minutes, in the case of few claims, or hours, where the audit involves multiple beneficiaries and dates of services. In the event the ALJ issues an unfavorable decision, the fourth level appeal would be before the Medicare Appeals Council. The fourth level appeal must be narrowly tailored to focus only on the ALJ’s decision and must focus on an error made by the ALJ in its analysis or findings.
Conclusion
The most frustrating aspect of any audit is the stark realization that you may practice excellent medicine but be deficient in one or more areas of documentation. There is a difference between “medical necessity” and “documented medical necessity”.
As part of defending an audit, it is equally important to insulate yourself as much as possible against future audits by establishing a corrective action plan. When working with our clients, we make certain to raise every viable defense against an overpayment demand, while also educating them so that they avoid future exposure to a similar audit from the CMS or another payor.
How Frier Levitt Can Help
Frier Levitt has decades of experience handling payer audits and overpayment demands. Our attorneys have successfully navigated all manner of overpayment demands from Medicare, Medicaid, and commercial insurance providers, and have litigated podiatric audits, including wound care cases, on behalf of numerous clients before Administrative Law Judges. If you receive an overpayment demand from Medicare or any payer related to wound care, call Frier Levitt today.
