Audits by Medicare and even commercial payers are becoming more and more prevalent. Unfortunately, subspecialists are especially likely to be audited because of their relatively frequent use of the highest level evaluation and management (E&M) or physician visit codes. Payers profile physicians' billing patterns with respect to the E&M codes against some benchmark. Those physicians with billing patterns showing a more frequent use of high level codes will often receive an audit letter requesting medical documentation for a sample of patients over a defined period of time.
The threat of an audit combined with onerous documentation requirements has led many physicians to simply stop billing the highest level E&M codes. Downcoding is not the answer. If you believe that you have provided a level 4 or 5 E&M service, then that is what you should bill. However, your documentation has to be sufficient to support that service.
Recovery Audit Contractors (RACs) are Congressionally-mandated entities that were established to identify past Medicare improper payments and to make appropriate adjustments. The RACs receive payments based on the amount of the improper payments they correct for both overpayments and underpayments...Read more.
Ask any physician to name their least pleasant experiences and payer audits are likely to be near the top of the list (just below malpractice lawsuits). Audit request letters are not the end of the world but, just like letters from the IRS, they should be taken seriously. Please keep the following points in mind in the event of an audit:
A request for medical records by a payer needs to be taken very seriously. Your office staff should be informed that if such a letter is received it should be brought to your attention immediately. You should read the letter carefully, noting when the records are due...Read more.
It may be months or even a year before you receive the results of the payer's audit. The letter will state the amount, if any, that the payer believes you owe. Invariably, the payer has extrapolated the error rate in the sample of requested records over a year or year and a half... Read more.
If you appeal the audit results, you will be provided with a fair hearing. A lawyer is not absolutely necessary for the hearing because it is rather informal. Nevertheless, it is probably a good idea to have one. The hearing may take place in person or over the telephone... Read more.
Medicare Appeals Process Brochure(PDF)
RAC Appeals Process Fact Sheet (provided courtesy of the AMA) (PDF)
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