Most healthcare providers at some point in their careers will receive a request for patient records in connection with an audit. The purpose of these audits – whether the audit is from a private insurer or a federally funded insurer— is to identify potential improprieties in a provider’s practice. These improprieties can be due to alleged billing issues or issues with medical necessity of services provided. Although often viewed as routine, an audit and the subsequent response to this audit needs to be handled carefully.
An audit usually starts out simple enough – you get a request to produce patient records to the insurer who paid out claims for these patients. If the audit request is from Medicare, your audit will likely be a ZPIC, UPIC or RAC audit. Once you receive notice of the audit, you have a specified number of days to respond and provide the patient records and any other requested documents to the requesting entity. The requesting entity will review your provided records and determine if the allegations that initiated the audit are true or unfounded. Generally, providers are audited for the following reasons:
Medical necessity does not support claims billed
Billing for services not provided
Upcoding or bundling services billed
A provider is an outlier (with respect to similar providers) for a specific code billed
Not utilizing correct billing codes
The above list is not comprehensive but represents common reasons providers receive requests for audits. Just because you get audited does not necessarily mean you have done something improper; however, audits should never just be simply responded to and then ignored. If you receive a request for an audit, that means the insurer has cause to believe something is amiss in your practice. Engaging experienced counsel to assist with the audit and corresponding issues is necessary to ensure the audit does not escalate.
At our firm, we do not just provide records in response to an audit – we actually find out what’s going on. Too often, providers respond to an audit and let the auditors make their own determinations without any intervention. Auditors have the power to refer their findings to federal authorities for further civil or criminal action. We have represented numerous providers going through the audit process and our priority is to ensure a positive resolution without a referral to the government. We engage with the auditors to establish a good relationship and provide explanations and reasoning as to why the audit you received is unfounded. As a provider, your license is your livelihood and a negative outcome from a “routine” audit can substantially impact your future practice. Even if an audit finding suggests a high error rate in your billings, do not just submit to the audit’s findings. We have successfully resolved audits for providers with error rates in the 80th percentile. All audits and corresponding audit findings are worth fighting – your practice and license could depend on it.
Medicare Audits and Payment Suspensions
When providers contract with Medicare, they agree to be bound by the terms and conditions of reimbursement policies. One of those policies, however, gives Medicare the ability to initiate what’s called a “payment suspension.” Getting put on a payment suspension from Medicare can have dire consequences for a provider’s practice.
Medicare, through its requisite contractors issues a payment suspension when it has a credible belief that a provider is doing something improper. These beliefs only have to be supported by a “credible allegation of impropriety,” meaning Medicare does not usually have absolute proof providers are doing something improper when it issues payment suspensions. Medicare has the discretion to issue payment suspensions before of after the suspension will take place. In cases of more serious allegations, usually relating to fraud schemes, Medicare often initiate the payment suspension before it notifies the provider. Common reasons providers receive payment suspensions are due to the following:
Medicare believes a provider is billing for services not being provided.
Medicare believes a provider is submitting claims for reimbursement using incorrect billing codes.
Medicare believes a provider is upcoding certain procedures.
Medicare believes the provider’s records do not substantiate the services billed.
Medicare believes there is an outstanding overpayment received by the provider for past services billed.
Medicare believes a provider is engaged in a kick-back scheme or other violation of federal healthcare laws.
If a provider receives a payment suspension notice from Medicare, all payments from Medicare will be immediately stopped and a provider can no longer bill Medicare until the payment suspension is resolved. For providers who treat primarily Medicare patients, a payment suspension can bring their practice to a grinding halt. Although receiving a payment suspension does not preclude providers from treating and providing services to Medicare patients, it does preclude them from receiving any payment for these services. During a payment suspension period, all payments to a provider based on Medicare covered services will be deposited into an escrow account until the payment suspension is resolved. A payment suspension usually lasts for 180 days and while a provider cannot technically appeal the suspension, they can submit a rebuttal in an attempt to refute the allegations in the suspension notice.
A provider has 15 days from the issuance of the suspension notice to file its rebuttal. A payment suspension notice does not go into detail but does lay the basis for why a suspension was initiated in the first place. A provider, in its rebuttal, should address the suspension reasons in totality to challenge the issuance of the suspension and explain why it is not warranted. In conjunction with its rebuttal statement and analysis, the provider should also submit relevant documentation (if it exists) to support his or her reasons for having the suspension lifted.
After a provider submits his or her rebuttal statement with any corresponding documentation, CMS will review the rebuttal and documentation and decide if the payment suspension should be lifted or upheld. Depending on the circumstances of what led to the suspension, Medicare can decide to further the payment extension beyond the original 180-day timeframe. If Medicare initiated the payment suspension based on an alleged overpayment, generally the suspension will stay in place until a correct overpayment amount is determined and subsequently refunded by the provider. For more serious allegations that led to the suspension, Medicare has the authority to refer its findings to federal authorities such as the United States Attorney’s Office. If findings are referred to the US Attorney’s Office, a provider now has to worry about defending civil or potentially criminal actions arising from the original payment suspension notice.
If providers receive a Medicare payment suspension notice, it is critical for them to hire experienced defense counsel in order to formulate an appropriate response. Often, reasons for payment suspensions can effectively be addressed in the rebuttal statement, but rebuttal statements must be tailored to each provider’s unique situation and adequately address all concerns and allegations raised in the suspension notice. As stated above, payment suspensions not only effect a provider’s ability to earn money but can also turn into criminal investigations if not handled properly. At our firm, we determine the root cause of the payment suspension and not only work with the appropriate entity to resolve the issue, but also work with you directly to ensure a payment suspension does not happen again. Medicare regulations are inherently complex – you should not feel bad if you don’t understand all the complexities of your obligations as a Medicare provider. Our firm, however does understand these complexities and will work with you and your practice to make sure necessary compliance measures are in place to stave off future Medicare audits and payment suspensions.
UPIC Payment Suspensions
Providers who contract with CMS to provide services to Medicare beneficiaries are familiar with their assigned UPIC (Unified Program Integrity Contractors). These UPICs process claims submitted by the provider for services rendered to Medicare beneficiaries. If a UPIC suspects a provider is billing incorrectly for services or doing anything else improper relating to the claims it submits for reimbursement, the UPIC can take action against the provider.
Nick Oberheiden is the absolute best federal litigation attorney. Nick gives you the immediate comfort of feeling 100% protected. He is polite, respectful— and extremely compelling. His legal strategy turned out to be brilliant.
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