From 2005 to 2008, the Center for Medicare and Medicaid Services (CMS) conducted a 3 year pilot program in New York, Florida, and California. The CMS hired an Recovery Audit Contractor to review providers’ claim submissions for accuracy and medical necessity. The result of this demonstration project was that, AFTER expenses, the CMS was able to save $3.73 for every dollar it spent to perform the audit. That’s a pretty good return on any investment. The CMS was so encouraged by the results of this demonstration program that it will have implemented a similar program in all 50 states by the end of 2010. Don’t think that private insurance companies are not aware of this program, and have or will be implementing their own audits of claims submitted by providers.

The auditors will be focusing on any discrepancy between the billing and the SOAP notes. First, they will be looking to see if your notes correspond with the dates and types of services for which you billed. Then they will scrutinize your notes to make sure that they comply with all State and Federal regulations and demonstrate ‘medical necessity’. If the auditors find any discrepancy between the billing and substantiation provided by the notes, the provider will be directed to return the money already paid to them.

The bureaucrats have done their best to make compliance with their regulations difficult to achieve. Frequent changes, ambiguities, and details required for compliance open the door for the auditors to claim non-compliance and demand money retuned to the government. The vague term ‘medical necessity’ also provides much leeway for the auditors to claim “foul”. Who decides ‘medical necessity’, the provider who has actually examined the patient, or some auditor miles away, who wouldn’t recognize the patient if they saw them?

CMS has acquired a large arsenal of auditors to ensure that you comply with all the regulations. From the Recovery Audit Contractors (who are paid on commission) to the recently re-named Zone Program Integrity Contractors to the local Medicare and Medicaid reviewer, all are in place to ensure that no over payment occurs.

Don’t think that a cash practice will remove you from the threat of an audit. If you provide the patient with a receipt, which they then turn into their insurance company, you are still required to meet all state and insurance carrier regulations pertaining to documentation.

The solution to the nightmare of documentation and compliance with Medicare guidelines is to incorporate Electronic Medical Records (EMR) aka Electronic Health Records (EHR).

More on this technology and the incentives available to providers through the ARRA in next week’s article.

Submitted by Dr. DG Comfort, CO

 
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1 Comment
#1 by Karen Adair on September 13th, 2010

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The auditors already came from BCBSTX. Amazingly they decided that I owed $240,000, which is more than they paid me for 2 years, and I thought that they could just reach back 2 years (since that is the statute of limitations in Texas). But, no, they want every penny I ever made from them . . . and possibly more. They accused me of being a criminal, but then decided I wasn’t when I got my files to them the same day. However, they are saying my notes didn’t cover what I charged, but are unable to tell me how they didn’t and can’t seem to give me any advice on how to do this correctly. Talk about being corrupt! It sure isn’t me!