The Audit Process

While Medicaid audits are meant to ensure integrity and efficiency of the Medicaid Program, they can often be incredibly cumbersome and challenging for medical providers to navigate. During an audit, auditors will review medical records, billing statements, and other documentation to verify the accuracy of claims. The audit process typically involves a notification of the audit and site visit and/or request for records to the provider, submission of the requested documents and a review period, followed by a preliminary audit finding, provider appeals, and a final determination.

Common Triggers for Audits

Medical providers can potentially avoid the burdensome nature of an audit by being aware of the common triggers and taking steps to prepare accordingly. Below is a list of the most common triggers for an audit.

• High Volume of Claims: Providers with significantly higher claims compared to others in their area and industry—especially for increased billing codes—may attract scrutiny and increase the likelihood of undergoing an audit. Consistent use of high billing codes for services that are typically billed at lower levels may be appear suspicious and increase the likelihood for a targeted audit.
• Unusual Billing Patterns: Billing practices that deviate significantly from the norm can trigger an audit. This might include billing for services rendered at unusual times, such as frequent billing for after-hours services that do not match the provider’s typical hours of operation. Significant gaps or overlaps between service dates and billing dates should also be avoided.
• Frequent or Large Adjustments: Numerous claims adjustments or corrections can also signal potential issues. For example, a high volume of claim resubmissions or corrections for previously billed services might flag unwanted attention.
• Specific Service Types: Excessive billing for certain services, such as high-cost procedures or those frequently subject to fraud and scrutiny, are more likely to be audited. Also, regularly billing for procedures or treatments that are not commonly performed might also raise concerns for an audit.
• High Rate of Claims for New Patients or Referrals: An unusually high number of new patients or referrals from a particular source may be questioned. A provider that consistently bills for new patient visits at a rate much higher than for follow-ups or for already established patients can be a red flag. 

Best Practices for Documentation and Compliance

One of the first and best lines of defense in dealing with an audit can be the provider’s documentation and compliance practices. Providers should develop and implement an effective compliance program—ideally, before and in anticipation of being subject to an audit. Therefore, it is important that all documentation is detailed, thorough, and aligns with the billing claims submitted. Below are some strategies for medical providers to consider.

• Accurate and Thorough Documentation: Ensure all medical records are complete, accurate, and up-to-date.
• Regular Internal Audits: Conduct periodic internal reviews and investigations to identify and rectify potential issues.
• Training and Education: Provide ongoing training for staff on proper billing procedures and compliance requirements, including applicable compliance guidelines from state agencies and the Centers for Medicare and Medicaid Services (CMS).
• Compliance Programs: Implement and maintain a robust compliance program tailored to your practice’s needs in order to ensure that all the active billers understand how to document their services and use the right billing codes.
• Stay Updated: Keep abreast of changes in your state’s Medicaid rules and regulations and federal guidelines to ensure ongoing compliance.

Legal Strategies for Facing an Overpayment Demand

Understanding the strategies in managing a Medicaid audit can potentially save your practice a lot of time and expense. Below are several legal strategies for your practice to consider that can effectively manage the audit process and protect the interests of your healthcare organization.

• Timely Response: Respond promptly to audit notifications and overpayment demands within the stipulated timeframes.
• Documentation Review: Conduct a thorough review of all documentation and records related to the disputed claims with your legal counsel before submission to the auditor.
• Expert Consultation: Engage legal and healthcare compliance experts to analyze audit findings and prepare your defense.
• Appeal Process: If discrepancies are identified, utilize the appeal process to challenge the audit finding and potential overpayment demand, providing clear evidence and supporting documentation. Hiring a knowledgeable healthcare attorney can help protect your practice’s interests by effectively navigating the appeal. Attorneys can help negotiate a settlement with Medicaid authorities, if appropriate, and resolve the matter efficiently to avoid prolonged disputes.

By understanding the audit process, recognizing common triggers, adhering to best practices, and employing effective legal strategies, medical providers can better navigate the complexities of Medicaid overpayment audits and protect their practices.