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Audit Agony: Prepare yourself as insurers look to recoup funds
From: ENT Today, July 2010
by Richard Quinn
Hayes Wanamaker, MD, an otolaryngologist in Syracuse, N.Y., refers to the recovery audit process of insurance carriers as the proverbial camel’s nose under the tent.
A partner at Central New York ENT Consultants and chief of otolaryngology at Crouse Hospital in Syracuse, Dr. Wanamaker has been audited by carriers several times in the past few years, and the experience is always similar: The insurance company comes into the physician’s office on a premise like the review of billing directly related to treatment of allergy-related issues. But, while culling through records related to that topic, the insurer starts looking at evaluation and management coding, extrapolates a package of records over the course of the practice and then presents the audited office with a bill that can easily be in the hundreds of thousands of dollars.
“You may get a $300,000 request for a repayment reduced to $50,000 or $100,000, and it will cost you $30,000, $40,000, $50,000 in legal fees,” Dr. Wanamaker said. “They make it so painful to challenge them or take them on that it can ruin your practice.”
The situation is only going to become more acute over the coming months and years as carriers continue to scrap to recoup dollars amid changing federal rules. The government is getting in on the action, as well: The U.S. Government Accountability Office released a report in late March that pushed the Centers for Medicare and Medicaid Services to become even more aggressive in recovering money from physicians. The result was the launch of the Recovery Audit Contractor (RAC) program, which officially began in February with the aim of reducing improper Medicare payments.
“GAO recommends that CMS improve its corrective action process by designating responsible personnel with authority to evaluate and promptly address RAC-identified vulnerabilities to reduce improper payments,” the report reads. Put more simply by a health care website: “Providers haven’t even begun to feel the true impact of the dreaded RAC program.”
—Hayes Wanamaker, MD
Protect Yourself
Otolaryngologists can put themselves in position to handle the process, though. While America’s Health Insurance Plans, a trade group representing carriers, did not respond to several requests for comment, health care attorneys, billing professionals and physicians say diligence and attention to detail can protect even the smallest of practices. Some of the advice is hidden-in-plain-sight simplistic: Make sure to follow the rules of your contracts with individual insurance carriers. But adhering to the sometimes labyrinthine rules of the contracts first requires a detailed knowledge of what those legal documents say.
Rhonda Buckholtz, CPC, vice president of business and member development for the American Academy of Professional Coders, said she has seen instances in which physicians are not intimately aware of the details of their contract. “Physicians by nature aren’t businessmen,” she said. “In their mind, they know they’re doing the best they can for their patient and they believe what they’re doing is right. And a lot of times, they are.”
But good patient care does not equal good billing. Some advice from Buckholtz:
- Never throw anything away. Auditors are looking for paper trails when they build a case. To prove that a process was handled in the correct way, the same paper trail must exist in defense of a doctor. In a related vein, do not rely on verbal assurances from consultants reviewing a practice’s procedures. Those comments are viewed much more credibly when put in writing.
- Consider paying for an independent audit. Buckholtz and others quote examples of health care audits that asked for one level of reimbursement, only to see carriers reduce that number when confronted with an independent audit that shows a practice has followed the rules.
- Remember that physicians are ultimately responsible for all decisions, even if they are uninvolved in those decisions. “The other thing I find a lot is that when working with the different audits and health plans, a lot of times, the practice managers, coders and billers don’t want to bother the doctor with the details,” she said. “Sometimes it’s that they try to be too helpful or protective of the physician.”
Scott Einiger, a senior partner and director of the New York City Health Law Practice at Abrams, Fensterman, Fensterman, Eisman, Greenberg, Formato & Einiger, said hiring an attorney once an audit has been initiated is often a smart idea. “It’s a very uneven playing field,” he said. “Many of the doctors are ill suited, ill equipped or don’t have the resources to deal with all the things thrown out at them by the carriers.”
Einiger works with some doctors who have become so dissatisfied with the managed-care process that they have opted out of insurance plans. Those physicians, such as the Independent Doctors of New York (http://idny.org/idny/static/home.html), can set their own rates without interference from carriers. However, because most patients rely on health insurance to cover the majority of their health care costs, this option is not viable for many doctors.
Another option that helps to protect against audits is to band together in shared-services scenarios sometimes referred to as independent practice associations. The arrangements may require approval by state officials, but the advantage of physicians working together is “bargaining clout,” Einiger said. Many physicians quietly grumble that insurance carriers prefer to target smaller practices because they are less able to fight back than the larger institutions. That argument can be mitigated when practices remain individual for medical purposes but share risks and services such as supplies or electronic medical records (EMRs), he added. Dr. Wanamaker also urged physicians not to be cowed by a carrier just because an audit has been initiated. At that point, carefully review the audit parameters to ensure that the practice is being treated fairly. “Before you let them in the door, as best you’re able, agree up front what (they’re) looking at, even if that’s a phone call to your local medical director,” he said. “Box in the scope of their investigation.”
The last time Dr. Wanamaker’s practice was audited, the question was whether bilateral procedures had been correctly billed and paid. “We asked for the list of patients they had questions on,” he recalled. “And we looked at it first, and we found that a third of the charts they wanted to look at fell outside their allowable scope of inquiry. The first thing we did is we went back to them and said, ‘This chart, this chart and that chart, you’re not allowed to look at this.’”
Of course, the best defense for any audit is to be doing the right thing. And whether that’s accomplished via the hiring of an accredited coding expert to ensure a practice’s compliance or keeping an attorney on retainer to help implement procedures for that compliance—if an audit can’t find a mistake, then the issue is moot.
“First, of all, you have to do the job properly,” Dr. Wanamaker said. “You may not like the rules, but the rules are what the rules are. You have to follow them.”
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