12/07/2016

Audit Management Strategies: Be Prepared

By Andrew Feldman, NYSPMA General Counsel

Post-payment audits by Medicare and private insurance companies are occurring with increasing frequency as these third-party payers seek to reduce their expenditures and prevent alleged fraudulent billing practices, real or perceived.  While not always avoidable, podiatrists should manage risk through accurate billing and documentation. Further, podiatrists must keep in mind federal and state privacy

Although some podiatrists are randomly selected for auditing, certain billing patterns may increases the risk of an audit. Billing patterns that are significantly different from other podiatrists may trigger an audit. Using particular procedure codes and modifiers at a higher rate than other podiatrists may set off alarm bells for third-party payers, as can frequent use of higher reimbursing codes. Use of a limited set of codes may also increase a podiatrist’s risk of being audited.  Information from a “whistleblower” may also trigger an audit.

During a post-payment audit, auditors will be looking for reasons to recover money that has been paid to providers. In particular, they will be looking for improper coding, upcoding (intentionally misrepresenting the nature of services provided to receive a higher reimbursement), and unbundling of services (billing for components of a service instead of the complete service). Auditors will also look for waivers of co-pays co-insurance, or deductibles that are not accompanied by documented financial need. If documentation fails to support the provision of services for which the podiatrist billed, the insurer may demand a refund for those services. Auditors may even contact patients, asking them to complete questionnaires or inquiring about the treatment they received.

Not insignificantly, the findings of an audit can lead to civil or criminal fraud charges and professional discipline.

An audit is usually initiated with a request for samples of podiatric records by the third-party payer. It is important to cooperate with requests from investigators, because lack of compliance may result in more intense scrutiny. However, in turning over records for review, podiatrists must be careful to avoid violating the federal Health Insurance Portability and Accountability Act (HIPAA) and Section 18 of the New York Public Health Law. Although the public health law contains an exception that permits providers to disclose portions of podiatric records for payment purposes without patient consent, in general, patients must consent in writing before their podiatric records can be released to third parties. A podiatrist who finds himself or herself the subject of an audit needs counsel and is one of the reasons podiatrists are encouraged to join the legal protection program offered by the NYSPMA. 

Podiatrists should limit the information provided to that which is requested. Auditors can generally request information from up to six years prior to the audit, but some areas have shorter look-back periods. Podiatrists must not alter their records in any way.

A podiatrist should make every effort to conduct him or herself in such a manner as to avoid an audit, and should ensure proper coding and documentation.  In the event of a post-payment audit, sound documentation is a key to avoiding refund demands, and the assistance of counsel will generally be very helpful.