Medical Billing Audits. Are You Prepared?

Medical Billing Audits. Are You Prepared?The initial response to an insurance company audit of medical records can be of utmost importance as to how the audit is handled. Very often, third party carriers, or even Medicare and Medicaid, make decisions regarding medical necessity based upon very general statements designed to create a reason to deny reimbursement of the claim or request money back from the provider. The general position and statement that the “documentation does not support the treatment provided” is a very common one, used by insurance carriers for denial of the claim for reimbursement. When the provider first receives the audit notification, it is extremely important, to properly respond and be prepared:

  • If an onsite audit, it is extremely important that the provider knows their rights with respect to the insurance company or the third party payor, which may, as in the case of Medicare or Medicaid, have government investigatory authority and be allowed greater access.

  • If a private insurance audit, the provider has significantly more rights to refuse an onsite audit and provide an alternative by sending records or claims to the payor at a later date. There is more right of refusal with private insurance audit requests than with Medicare or Medicaid audit onsite requests. The exception to that (in the case of medicaid/care) would be if there has been an immediate showing of harm to the patient being treated.
  • If a third party audit, insurance companies will very often attempt to blindside a provider by requesting an in-person meeting before any real review has taken place, or before the doctor has had a chance to review their own records. Providers need to properly prepare and review their records and demand the objections being raised by any third party payor. It is rare that any such meeting results in a favorable position or determination for the provider. More often than not, insurance carriers are looking to surprise the provider to gain an advantage in any audit or review process.

Once an audit letter is received, it is of utmost importance to review the records or have them reviewed by a third party auditor, capable of determining what the appropriate course of action and defensibility of the records should be. Very often, such a review may point out where the insurance company has some argument based on poor documentation of the records.

Additionally, the physician has a very short window of time within which to object to any sampling used by the third party payor in their audit calculations.

These types of preventative tactics and preparation can often lead to a more favorable resolution of an audit than would otherwise have been the case, if the provider was unprepared and simply sent the requested records.

Ian Lifshutz
[email protected]

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