Learn about potential auditors to avoid becoming a target
By Debra Lansey
ACP frequently receives inquiries about claims audits. It's important for physicians and their staff to be aware that the Centers for Medicare and Medicaid Services (CMS) has a number of audit programs, all designed to eliminate erroneous payments and prevent administrative waste. The best known is the Recovery Audit Contractor (RAC) program. Lesser known are the Zone Program Integrity Contractors (ZPICs), the Comprehensive Error Rate Testing (CERT) program, and Medicare Administrative Contractors (MACs).
Recovery Audit Contractor program
The RAC program was established in 2009 to help CMS mitigate claim payment errors to physicians and other clinicians, be they over- or underpayments. RACs use their audit results to identify Medicare program vulnerabilities. This program's contractors audit claims submitted to Medicare Parts A, B, C and D.
RAC audits are carried out by four contractors around the country. A point of controversy about the program is that the contractors are paid on a contingency basis, earning 10% of their recovery totals. CMS has released statistics on its perceived success of the RACs; this information can be found in previous ACP Internist articles from the June 2008, June 2009 and May 2011 issues.
RACs target their audits based on a wide range of perceived claims errors, based on findings in reports from the U.S. Department of Health and Human Services' Office of the Inspector General, and through their relationships with the MACs and CERT organizations. RAC audits are typically triggered by:
- a high claim rejection rate,
- high claim recovery rates,
- claims data that do not match the medical record,
- beneficiary complaints to the MAC or to CMS,
- results of data mining, and
- outpatient versus inpatient designations.
As an example on that last point, CMS has stated that the place of service on hospital observation (outpatient) claims must match the place of service on the hospital's claim. RACs contend that certain diagnoses and procedures do not support an inpatient admission and should be billed as outpatient services. If the place of service on the physician's claims does not match that on the hospital's claims, the physician's claims will be denied. MACs are also looking at this coding issue.
Zone Program Integrity Contractors
ZPICs will assume the Medicare program integrity activities from the Program Safeguard Contractors, which are being phased out. The timetable for this has not been announced. There will be one ZPIC to correspond to each of the MAC jurisdictions. ZPICs will audit claims in Medicare Parts A, B, C and D, as well as durable medical equipment, home health and hospice and the Medicare/Medicaid matching project, which is another fraud prevention program.
ZPICs identify potential Medicare fraud using data analysis, evaluation of beneficiary complaints, and cases referred from law enforcement agencies and other Medicare contractors. ZPICs will also provide support to law enforcement during investigations and prosecution activities related to health care fraud cases. The support may take the form of overpayment determinations, data analysis, expert testimony, and medical review.
ZPIC audits typically happen with little advance notice, and can be done pre- or post-claim payment. Beneficiaries and medical staff may be contacted during an investigation. ZPICs use extrapolation and other statistical sampling techniques to determine overpayment amounts. In large cases, ZPICs may also work with CMS to suspend payment based on “credible allegations of fraud.”
ZPIC audits are mainly targeted at determining medical necessity, upcoding, billing for services or supplies that were not rendered, and offering or soliciting kickbacks.
Comprehensive Error Rate Testing
CMS uses its CERT program to measure the accuracy of its MAC claims processing. CERT basically measures the degree of improper payment on fee-for-service claims, such as those in Part B. CERT has been operating since 2002.
CERT audits claims that are randomly selected from all the claims submitted on a particular day. Controversially, although CERT exists to track the error rate of MACs, it's physicians and other clinicians who are required to submit medical records when CERT requests them. If a physician does not send the records, that counts against the MAC as an error.
CERT audits focus on:
- lack of documentation, including missing physician signatures,
- insufficient documentation to support coding,
- incorrect coding, and
- duplicate payments.
Because the CERT audits put CMS and its contractors under a microscope, several types of corrective actions have been implemented that can also benefit physicians:
- improving system edits,
- updating the Medicare coverage manuals and policies more frequently, and
- offering education programs for physicians and other clinicians.
Medicare Administrative Contractors and medical review
MACs, in addition to their claims processing duty, also run their own claims audits. They use the findings of RACs and CERT to help identify specific problem areas in their jurisdictions' claims and to target corrective actions based on the assessed severity of the problems. Medical review audits examine whether claims were billed in compliance with coverage, coding, payment and billing policies.
A MAC will review a sample of claims and, if an error is found, will classify its severity as minor, moderate, or significant. Errors are resolved by taking corrective actions that are judged to address the magnitude of the error. Among the corrective actions are:
- sending the individual physician information about appropriate billing procedures. This can be used for minor, moderate or significant errors.
- pre-payment review. Physicians whose claims have identified problems will have a percentage of their claims submitted to medical review before payment. Once physicians' claims demonstrate correct coding, they will be removed from prepayment review. This is, of course, one of the most difficult actions to face, since it delays what can be a valuable source of practice revenue.
- post-payment review. MACs will review a sample of a physician's claims after payment has been made. MACs will use a “statistical sampling method” (extrapolation) to estimate an overpayment or underpayment without requesting all the medical records. To CMS, not requesting records reduces the administrative burden. But to physicians, the extrapolation and resulting request for recoupment can seem like an unfair demand from the government.
How to avoid being audited
- Be prepared in advance. If you've not done it already, conduct a gap analysis of your practice and start an effective compliance plan. Tailor it to your particular practice.
- Do not ignore a contractor's request for medical records. Be sure to check and read your mail regularly, and follow up on any requests quickly. A show of cooperation certainly will not hurt you.
- Be sure your documentation is complete and follows CMS guidelines.
- Take advantage of the advice and education offered in the CMS Outreach and Education resources such as the local and national coverage determinations; the Medicare Claims Processing Manual; the MedLearn Matters articles; and the contractors' education sessions (online and in person), conference calls, newsletters and listservs. CMS also offers podcasts and scroll down to the items titled “Power Mobility Device Face-to-Face Examination Checklist” and “Oxygen Therapy Supplies: Complying with Documentation & Coverage Requirements.”
- Make it a point to regularly visit your RAC's website and take note of any new, relevant issues that have been approved for review. Then self-audit your practice by internally assessing whether it is in compliance with Medicare rules. If you find problems, take corrective actions before more claims are submitted.
- Use ACP's online reference “How to Complete a Coding Audit (Internal Medicine),” which is online.
- Use ACP's member resources. You can locate them by searching on the keywords “avoid audit” on the ACP home page.
Internist Archives Quick Links
Superior MOC Solutions from ACP
Meet your requirements with our approved activities. See details.
Making the Most of Your ICD-10 Transition
To help you and your practice make a smooth and successful transition to ICD-10 coding, ACP and ICD-10 content developers have created multiple resources available at discounted rates for ACP members.