The federal agency that oversees Medicare, the Centers for Medicare & Medicaid Services (CMS), performs few audits itself, but outsources these duties to a series of independent contractors, such as Medicare Administrative Contractors (MACs), Unified Program Integrity Contractors (UPICs), and the Supplemental Medical Review Contractor (SRMC).
What are the Medicare audit programs?
Generally, here are some of the audit programs in place: The RAC audits were developed in accordance with the Medicare Modernization Act of 2003. The program reclaims money by reviewing fee-for-service (FFA) claims – a process that has come to be known as a “clawback.” The RAC audits essentially divide the country into four regions.
What do auditors ask for in a Medicare audit letter?
In addition to medical records, auditors often ask for invoices and purchase orders for the drugs and medical supplies dispensed to patients for which Medicare reimbursed you. Include a copy of the complete record and not just those from the dates of service requested in the audit letter.
Do physical therapists get audited by Medicare?
In addition to this, if the audit uncovers any perceived fraudulent activity, the Medicare Administrative Contractor (MAC) will take your case up for additional investigation. The Medicare policy generally contains myriad regulations and rules. However, for physical therapists, most audits generally come from the following red flags:
Where does the Medicare audit take place?
You will often find that the Medicare audit and the site visit will occur at the branch office that appears on the claim form that you submit to the CMS. If a visit is to be scheduled at one of the offices in your practice, you want to ensure that the office is fully staffed and operational when the auditors get there.
What does a Medicare audit entail?
According to the CMS website, CERT audits are conducted annually using “a statistically valid random sample of claims.” Auditors review the selected claims to determine whether they “were paid properly under Medicare coverage, coding, and billing rules.”
What triggers a Medicare audit?
What Triggers a Medicare Audit? A key factor that often triggers an audit is claiming reimbursement for a higher than usual frequency of services over a period of time compared to other health professionals who provide similar services.
Who audits Medicare Advantage plans?
OIGEarlier this year, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) released the results of an audit it conducted on the accuracy of diagnosis codes submitted to Centers for Medicare and Medicaid Services (CMS) by Humana, Inc.
What is a CMS auditor?
General Information. CMS conducts program audits of MMPs, Medicare Advantage Organizations (MAOs), and Prescription Drug Plans (PDPs), collectively referred to as "sponsors" to help drive the industry towards improvements in the delivery of health care services.
Are Medicare audits random?
For example, the Medicare program is required to make random audits of 10% of all Medicare providers on an ongoing basis. An audit or investigation can result from complaints by patients about the quality or appropriateness of the care they received, or how they were billed for their care.
How far back can Medicare audit go?
Medicare RACs perform audit and recovery activities on a postpayment basis, and claims are reviewable up to three years from the date the claim was filed.
What is a Medicare OIG audit?
Under this authority, OIG conducts audits of internal CMS activities, as well as activities performed by CMS grantees and contractors. These audits are intended to provide independent assessments of CMS programs and operations and to help promote economy and efficiency.
What are the types of Medicare audits?
There are mainly three types of audits — Recovery Audit Contractor (RAC) audits, Certified Error Rate Testing (CERT) audits and Probe audits. Mistakes in medical documentation, coding and billing can rouse Medicare's suspicion during audits, which can lead to claim denials.
What is a CMS mock audit?
A mock program audit helps plans prepare for an actual CMS audit by: Identifying resources. Uncovering gaps in processes. Enhancing communication with first tier, downstream and related entities (FDRs) Including evaluating their ability to assist in audit activities, such as compiling universes.
How long does a Medicare audit take?
After the provider is “targeted” using data analytics, the MAC performs up to three rounds of "probe and Educate." Each round takes about 90 days—30 days for MAC to review the claims, a few days to schedule an educational call, 45 days for providers to show improvement—and is centered around a one-on-one educational ...
What are the 3 types of audits?
There are three main types of audits: external audits, internal audits, and Internal Revenue Service (IRS) audits. External audits are commonly performed by Certified Public Accounting (CPA) firms and result in an auditor's opinion which is included in the audit report.
What are the 4 types of audit reports?
The four types of audit reportsClean report. A clean report expresses an auditor's "unqualified opinion," which means the auditor did not find any issues with a company's financial records. ... Qualified report. ... Disclaimer report. ... Adverse opinion report.
What does a Recovery Audit Contractor (RAC) do?
RAC's review claims on a post-payment basis. The RAC's detect and correct past improper payments so that CMS and Carriers, FIs, and MACs can implement actions that will prevent future improper payments.
What Topics do RAC's Review?
Stay in the know on proposed and approved topics that RAC's are able to review. These topics will be updated monthly on the RAC reviews topic page and include:
Can you alter a medical record after an audit?
Never alter the medical records after a notice of an audit. However, if there are consults, orders, test reports, prescriptions, etc., that have not been filed into the chart, yet, have these filed into it, as you normally would, so that the record is complete.
Is a summary a substitute for medical records?
The summary is not a substitute for the medical records, but will assist an auditor that may not be experienced in a particular specialty or practice area. Make sure that any such summaries are clearly marked as summaries with the current date they are actually prepared. Label it accurately.
Should Medicare contractor be taken seriously?
All correspondence from Medicare, or the Medicare contractor, should be taken seriously. Avoid the temptation to consider the request from Medicare, or the Medicare contractor, just another medical records request. Avoid the temptation to delegate this as a routine matter to an administrative employee.
Is Medicare a routine audit?
Although you may speak of a "routine" Medicare audit, there is really no such creature. This is like saying you have a "routine IRS audit." The fact is that there is some item you have claimed as a Medicare provider or the amount of claims Medicare has paid in a certain category that has caused you or your practice to be audited.
Do auditors ask for medical records?
In addition to medical records, auditors often ask for invoices and purchase orders for the drugs and medical supplies dispensed to patients for which Medicare reimbursed you. Include a copy of the complete record and not just those from the dates of service requested in the audit letter.
What do you need to know about Medicare audits?
1. There are three major audit-worthy red flags for physical therapists. As you know, Medicare policy is a web of super-confusing rules and regulations.
What is RAC in Medicare?
Developed as part of the Medicare Modernization Act of 2003, the RAC program reclaims money by conducting retrospective reviews of fee-for-service (FFS) claims—a process known as “claw back.”. For this initiative, the country is divided into four regions.
Who performs prepayment audits?
The Centers for Medicare and Medicaid Services may employ Zone Program Integrity Contractors to investigate potential cases of abuse, fraud or waste. ZPICS may use sophisticated data mining algorithms and other methods to discover billing abnormalities that may be evidence of fraudulent business practices.
What factors might trigger an audit?
Examples of factors that may trigger a Medicare prepayment audit and/or a denial of prepayment claims include:
How are therapists audited?
In most cases, therapists are audited based not on a particular medical diagnosis, but rather on services rendered as identified by CPT codes. This is an area that truly tells the story via the claim. Data analytics assist the auditors in analyzing raw data in order to identify aberrant coding and billing behavior.
What is a medical record review?
Medical Record Reviews: Medical record reviews are initiated via a letter from the auditor, which typically states the reason for the audit, what will be reviewed, what the timeframes are, and what appeal options are available.
Why does automatic review differ from non-medical review?
Automatic Reviews: Automatic reviews differ from non-medical reviews, because the payment decision is made at the system level and clinical records are not reviewed; clear policies are the basis for the denial.
What is the purpose of CERT?
Its purpose is to help the provider understand Medicare’s billing guidelines and rules. It is prudent, but not required, for the provider to communicate with the CERT contact individual to discuss the report and take action as necessary. 2.
What agency is audited in 2004?
April 12, 2004 — When someone thinks of a government audit, the Internal Revenue Service is the federal agency that typically comes to mind. But psychologists who provide services to Medicare beneficiaries need to know about another potential audit source: the Centers for Medicare and Medicaid Services and its nationwide network ...
What triggers an audit?
A key factor that often triggers an audit is claiming reimbursement for a higher than usual frequency of services over a period of time compared to other health professionals who provide similar services.
What is an on record hearing?
An "on the record" hearing means that a decision will be made based on information contained in the case file. A hearing conducted by telephone allows the provider to present oral testimony to supplement the case file. At an "in person" hearing, the provider is able to present both oral testimony and written evidence.
How to respond to an unfavorable audit?
Respond to an unfavorable audit by asking for a "reconsideration.". A psychologist may do so by writing to the carrier and explaining clearly and in detail why each service in question is reasonable and necessary. Request a fair hearing if the results of the reconsideration are unsatisfactory.
Does Medicare consider a lack of documentation?
Medicare considers lack of corresponding documentation as evidence that billed services were not reasonable and necessary. The auditor will consider any related reimbursement as an overpayment and require the provider to refund the applicable amount.