How to Handle a Medicare Audit

Generally speaking, the question isn’t if you get a Medicare audit, it’s when. Every Medicare claim undergoes statistical analysis, and Medicare compares individual claims data to all other data submitted. In addition, it now does so in real time. It’s important to understand how a Medicare audit works, so that you can handle it successfully.

The two types

Medicare audits fall loosely into two types: a prepayment review and an analysis of claims after payment. Prepayment claims are the most common type, and are typically random reviews by carriers that look at just one or two of each physician’s claims. The primary purpose of such a focused review is to educate a physician about a coding problem. It could lead to a refund of a single overpayment.

On the other hand, in a comprehensive review, a carrier reviews a small sample of claims and uses the data culled to project overpayment for a period of months or years. In that context, the physician has three options:

  1. Pay the assessment.
  2. Waive appeal and provide evidence that the assessment is incorrect.
  3. Retain the right to appeal, but have the carrier review a larger sample of charts (usually the best option).

How to deal with it

Given that some level of Medicare audit is generally inevitable, here are some suggestions on how to deal with one:

Contact your attorney immediately. Your attorney can advise you on the audit’s level of seriousness and how best to respond to it. Don’t assume that it’s routine — treat all requests for information seriously.

Read the audit letter carefully. Make sure to provide all of the requested information when responding.

Submit a copy of the complete record. This includes not just records from the date of service in the audit letter, but chart information as well.

Ensure all medical records and copies are legible. If the records aren’t clearly readable, have the illegible record transcribed and included with the copies of the original records. Make sure no information has been cut off.

Include related X-rays or other diagnostic studies. It’s important to include everything that’s part of the patient’s records.

Don’t alter the medical records after receiving the audit notice. But, if there are orders, consults or other materials that haven’t yet been filed, file them as you normally would.

Place a brief summary of the patient’s care with each record. This doesn’t replace the record, but helps any auditors not familiar with your specialty.

Insert an explanatory note or supporting guidelines. These may involve local coverage determinations or medical literature to support unusual procedures or billings.

Don’t delay. Submit the materials before the deadline.

Follow up. If you communicate with the auditor via telephone, follow up with a letter confirming the communication.

Send all communications by certified or express mail. Request return receipt. In addition, make complete, legible copies of all correspondence and documents you submit. It has been suggested that you maintain one copy for yourself, one for the auditor, one for legal counsel, and two for your future expert witnesses (if necessary).

Label accurately. Label each copy of the medical record you submit, including page numbers.

Know the steps to take

In most cases, a Medicare audit is routine and minor. At worst — especially if delivered by an FBI agent or government official — the audit could lead to charges of fraud and hundreds of thousands of dollars of repayment. The key is to stay cool, document everything — and immediately consult with your attorney and financial expert.