Skirting the odds? 3 steps to survive regulatory scrutiny


As a consultant who visits many cardiology practices each year, I have heard the same story time and time again. The executive leaders and billing managers confidently tell me that they have not had any audits, demand letters or other attention from regulatory overseers. Then, in my interviews with physicians and staff, they produce those audit letters that are sitting in their inboxes or lost on their desks. Somehow those requests manage to circumvent the process.

Chances are extremely high that some regulatory body is reviewing your physician coding utilization and has requested some clinical documentation to support those codes. While the Regulatory Audit Contractors (RACs) are the focus of concern in the physician practice community, they may be only one of many sources of the increased scrutiny that physicians are experiencing.

To have an idea of who is looking at physician coding and documentation, you can look at CMS Review Programs that identify Medicare contractors and their responsibilities and the other agencies that assist with review and enforcement:

  • Medicare Administrative Contractors (MACs) – Process claims submitted by physicians, hospitals and other healthcare providers/suppliers, and submit payment to those providers in accordance with Medicare rules and regulations. This includes identifying and correcting underpayments and overpayments. MAC scrutiny is on the rise; RACs follow them in the review process, so RACs find what MACs miss – seems like our MACs don’t want to look bad.
  • Program Safeguard Contractors (PSCs)/Zone Program Integrity Contractors (ZPICs) – Identify cases of suspected fraud and take appropriate corrective actions.
  • Comprehensive Error Rate Testing (CERT) contractors – Collect documentation and perform reviews on a statistically valid random sample of Medicare FFS claims to produce an annual error rate.
  • Recovery Auditors (RAC) – Identify and correct underpayments and overpayments, as part of the Recovery Audit Program. RACs are paid on a contingency basis, so they get paid part of what they recover for the Medicare and Medicaid programs.
  • Office of Inspector General (OIG) – Dedicated to combating fraud, waste and abuse and to improving the efficiency of Health & Human Services programs, spending most of their efforts in the Medicare and Medicaid programs. The OIG is the inspector arm of the Department of Justice. When these badge-carrying officials show up at your door, it means they really think they can prosecute you.

Pre-payment reviews on your claims include National Correct Coding Initiatives edits, Medically Unlikely Edits and MAC Medical Review programs. Postpayment reviews include the CERT program, RAC program and MAC Medical Review programs.

There is no guarantee but here are three important steps to take to ensure that your practice identifies and survives the scrutiny:

  1. Make sure that all requests for records, coding and documentation are identified and tracked by the “compliance” officer/designee. All requests from any of the above-listed agencies (outside normal claim denials) must be reviewed to see if the request is part of any regulatory audit process. Hint  -- any letterhead containing “eagles” is likely one of those named agencies. Check your physician mailboxes and with your release-of-information staff to see if something has slipped through the identification process.
  2. Log all such requests to make sure that responses are timely and include all required information needed to respond to the audit. Identifying patterns and issues under review helps to improve overall documentation and identify any weaknesses in coding or documentation.
  3. Start or continue either internal or external self-audits to ensure that you identify any errors or documentation omissions before they do. It is really important to document any educational efforts taken to improve any deficiencies identified. If your audit shows a low agreement rate, be prepared to document what you have done about it and when/how you measured the improvements.

The goal is to make sure that you really know who is requesting your information or at least who is analyzing it and that your well-intentioned staff are not responding to audit requests as part of their normal duties without realizing it.

Margie Amato, MBA, RHIA, ACS-CA, has worked in health care administration for over 25 years. In her role as director of MedAxiom’s Business Office Coding Network, Margie helps member practices improve the profitability and effectiveness of the complete billing process. This is accomplished through extensive educational coding programs, networking and by utilizing a management system of key indicators to measure and benchmark each step of the billing process.

Her health care experience varies from coding and quality/utilization management to oncology service-line management. The most recent years have been devoted to cardiology practice management. Before coming to MedAxiom, Margie served as practice administrator for Utah Heart Clinic for 10 years and then served as the director of physician services for a Salt Lake City hospital where she started and managed a cardiology practice, a neurosurgery practice and a hospitalist program.