For a provider of healthcare services, payer audits are always a possibility. Both government and private payers consistently monitor providers to prevent fraud, overpayment, and improper billing or coding procedures. Audits can be nerve wrecking and intimidating, even if a provider is billing correctly. Improper billing can lead to civil and criminal sanctions. To help alleviate some of the tension surrounding the audit process, providers must be proactive and understand what types of audits exist and how to prepare for the possibility. Providers also need to understand how to appropriately respond to an audit.
Explore this issue:August 2018
Providers may be subject to a variety of audit types, depending on the payer. For private (i.e., commercial) payers, the audit can comprise an informal review of a few claims or a formal review of many claims. A private payer audit may occur after a claim is billed but prior to payment. Alternatively, it may occur after a claim is paid to determine whether there was improper billing, such as an overpayment, and whether recoupment is necessary.
For Medicaid audits, the Centers for Medicare & Medicaid Services (CMS) contracts with Audit Medicaid Integrity Contractors (Audit MICs) to examine the billing practices of Medicaid providers. This type of audit often occurs post-payment and focuses on identifying overpayments and noncompliance with Medicaid regulations. If fraud or improper billing is found during this type of audit, the case will be sent to the applicable state’s attorney general, who may choose to prosecute and recoup any overpayments.