Facing the Giant: Strategies for Conquering Daunting Payer Audits

May 24, 2024 | By: Lindsey Chatelain, CPC, CRC

If you have ever been the subject of a payer audit, you know it can be daunting. Not only does it delay payment and increase the number of records requests your staff has to process, but getting off the audit is also difficult. It is achieved only once the organization has proven accuracy with its billing processes. According to CMS, the Medicare Physician Fee Schedule (MPFS) program overpaid 31.2 billion dollars in 2023. The financial implications of inaccurate coding have caused the federal government and commercial payers to ramp up oversite. The providers are responsible for making sure claims are accurate, complete, supported by documentation, and medically necessary. Having an internal audit process can help achieve this accuracy.

The scope of the auditing process will vary from provider to provider, and there is no one-size-fits-all solution. The key to determining the size of your audit is to identify risk areas. The following are some questions the organization should ask:

What is the focus of the OIG Work Plan?
Where do my denials come from?
What types of complaints do we get?
Are there any recently changed laws or regulations?
Do I have a new provider?
Do I have a new employee?

Once you have determined in what areas you have higher risk, you can determine what the audit process looks like. The following items should be considered when making this determination:

How often should I audit?
Should I audit pre or post-service?
What is the right sample size?
What should be included in the audit?
What accuracy rate is acceptable?

Auditing helps us understand the organization’s overall health and is a key component of its compliance program. It helps to keep billing errors in check and prevents unnecessary claim denials and additional work. Making sure you billed it right the first time and that the provider is paid has value. Demonstrating this value is a great way to establish an auditing program in your organization.

To do this, take a sample of claims and audit to see if all applicable CPT, HCPC, ICD-10, and modifiers were assigned appropriately and that the documentation supports the codes billed. If you find discrepancies in the documentation and the billed services, do not be afraid to speak with the provider and understand the discrepancies. After an audit, communication between the coder and the provider gives both parties experience and perspective. Most medical providers are not professional coders, and most coders lack formal clinical education. We must communicate to get a clear picture and accurately report services rendered.

To take the audit process a step further, the auditor should compare all applicable information to local and national coverage determinations and payer policies. These coverage determinations include items such as having an order in the medical record, saving any applicable imaging (this includes ultrasound and fluoroscopic guidance), conservative treatment requirements, the frequency of the service, and so much more. When programs like RAC or CERT review the medical record, they look for this level of detail in their audit, and so should you! Once you have your findings, share the results with your organization’s leaders, share them with your compliance officer, and log them as part of the year’s compliance program oversight. Address any adverse findings, take appropriate action for historical claims, and make corrections to policy and procedures for future services.

Everyone has to start somewhere! If your organization’s auditing and compliance program is currently limited, do not expect a high level of accuracy after your first audit. We are only human, and we do not know what we do not know. What is important is that you address the issues and work to improve future outcomes. Working as a team, supporting each other, and bridging gaps help us strengthen medical billing compliance.

Lindsey Chatelain, CPC, CRC

Source: CMS Fiscal Year 2023 Improper Payments Fact Sheet, https://www.cms.gov/newsroom/fact-sheets/fiscal-year-2023-improper-payments-fact-sheet#:~:text=The%20Medicaid%20improper%20payment%20rate,the%20result%20of%20insufficient%20documentation