The Anatomy of an Audit - Part 1

January 23, 2018

In the January/February 2018 issue of Arkansas Medical News, healthcare attorneys Lynda JohnsonTimothy Ezell and Tonya Gierke begin a series titled "The Anatomy of an Audit." The series will appear bimonthly in the magazine and will discuss various audits and offer suggested courses of action. 

The Anatomy of an Audit - Part 1

An audit these days for a physician clinic may begin innocuously, with a request for a handful of medical records; an unannounced, on-site visit from a Medicare or Medicaid auditor; or with a piece of mail that could easily be mistaken for junk mail. Audits have many origins, and a relatively recent development which may begin a lengthy and expensive audit process is the issuance of a “Comparative Billing Report” (CBR). 

A company called “Global Tech” issues these CBRs to physician providers. Global Tech, according to its website, is a Federal services firm based in Arlington, Virginia, and has been contracted by the Centers for Medicare & Medicaid Services (CMS) to develop and disseminate certain “educational tools,” like these CBRs, to physician practices. While the Medicare Administrative Contractors (MACs) have been distributing similar peer-comparative reports for several years, CMS has now expanded this program to a national level with Global Tech. CBRs are not currently sent to hospitals, but only to physician practices.

If you receive a CBR, you should pay close attention to the document. It could very easily be mistaken for a piece of junk mail. CBRs are sent to provide insight into billing trends and to inform providers with regard to how that provider’s billing practices compare to its peers across the region. CBRs contain data-driven tables and graphs that contain an explanation of findings comparing a particular provider’s billing and payment patterns to those of its peers, both in the same state and across the nation. The stated goal of these CBRs is to offer a tool that helps providers better understand applicable Medicare billing rules and improve the level of care they provide to their Medicare patients.

The possible bad news is that, generally speaking, if you receive a CBR, it means that you have been identified as an “outlier” as compared to your peers, with respect to utilization of a particular CPT code and/or performance of a particular procedure. In fact, you should be especially on alert for receipt of a CBR if you or your practice is a high volume practice which bills certain CPT codes repetitively. As a proactive measure, you should review your most commonly submitted codes and confirm that your claims submission and supporting documentation are in accordance with Medicare (and Medicaid) requirements regarding the same.

Recommended follow-up after receiving a CBR includes: 

  • Conducting reviews of your documentation to be sure that your documentation supports the particular CPT code that is at issue, and that the overarching medical necessity is clearly documented.
  • Identifying Medicare regulations, payment policies and reimbursement guidelines which are applicable to the particular CPT code(s) at issue.
  • Considering engaging counsel to assist with the foregoing.

While the stated goal of the CBR is educational in nature, keep in mind that data mining is continuous with all CMS contractors; and once your practice has been identified as an outlier, receipt of a CBR is very possibly only the first of many steps that may follow in the precarious course known as a Medicare audit.

Lynda has practiced in the health law area since 1986, representing a wide variety of healthcare providers including hospitals, physicians, physician groups, nursing homes, and home health agencies. Recently, her practice has focused around representation of hospitals and physicians in HIPAA compliance efforts and other areas of regulatory compliance. Her practice also includes issues involving Stark I and II and Anti-Kickback compliance, Medicare/Medicaid reimbursement, corporate compliance issues, physician and hospital organization issues, managed care, healthcare and hospital law, long-term care and home health.  

Timothy practices primarily in the area of healthcare law, representing hospitals, physician groups and other medical service providers in various corporate and compliance matters. His experience covers matters relating to HIPAA, Stark, fraud and abuse, anti-kickback, EMTALA, Medicare reimbursement, compliance, joint ventures, provider sales and acquisitions, medical staff bylaws and credentialing issues.

Tonya is a healthcare attorney who utilizes her background as a  compliance officer and her experience in medical record review to assist clientsthrough complex legal issues. She is a Certified Inpatient Coder (CIC), Certified in Healthcare Compliance (CHC) and Certified in Healthcare Privacy Compliance (CHPC). Her combination of legal and clinical experience, along with her compliance certifications, make her a unique resource for hospitals and healthcare professionals. 

The information provided above is created by the attorneys in the Healthcare Practice Group at Friday, Eldredge & Clark, LLP. This is not a substitute for legal advice and should be considered for general guidance only. For more information or if you have further questions, please contact one of ourHealthcare Attorneys.