By Leslie M. Cumber

Audits questioning the amounts charged by health care providers can come in many different forms – a provider could receive a payment denial from a Medicare Administrative Contractor (MAC), a request for post-payment review from a Recovery Audit Contractor (RAC), or notice of a comprehensive investigation by a Zone Program Integrity Contractor (ZPIC). All forms are serious, and should be handled carefully, since the mishandling of an audit request can cause significant financial loss for a provider.

Who is the Auditor?

An audit request should be examined upon receipt to identify the auditor and any applicable deadlines. Identifying the auditor will help determine the type of audit. For example, RAC audits tend to be more serious than MAC audits, and ZPICs are tasked with investigating instances of suspected fraud, waste, and abuse. Once the auditor has been identified, the deadline for responding to the request should also be determined, and if additional time is needed, then an extension should be requested as soon as possible.

Collect Documentation

The request will require certain documentation. The codes, claims, or practitioners that are the subject of the request should be identified, and the requested medical records should be compiled. Even if the amount of information and documentation requested seems manageable, the provider should begin compiling early – it will inevitably take longer than expected.

Response Letter

In addition to submitting the requested documentation, the provider will want to submit a response letter. The response letter should make every plausible challenge to the audit findings. If the auditor has determined that the claims were paid in error because there was no medical necessity, the provider should try to show that there was medical necessity. The CPT Codebook, the relevant local coverage determination, the relevant national coverage determination, the relevant MLN Matters publication, and other guidelines should be consulted. It may also be beneficial to retain an expert, who can attest to the appropriateness of the codes billed.

Negotiation and Appeal Options

If the auditor’s determination is negative, there are appeal options. Unfortunately, the success rate for appeals is low, and re-filing will incur additional costs. Therefore, it is important that the initial response is thorough. Keep in mind that Medicare auditors are often paid on a contingency fee basis, so auditors want to collect as much as possible with as little effort as possible. Providers should use this to their advantage – they should not be afraid to negotiate.

Payment Plans

Finally, there are payment plans available. If appeal is not pursued, the provider may file for an extended repayment schedule (ERS). An ERS allows repayment of the overpayment over time if a “hardship” would exist in making the repayment. A hardship exists when the outstanding repayment (including interest) would be greater than 10 percent of the total Medicare payments made to the provider in the previous calendar year. An ERS may be requested for up to a sixty month repayment period. The longer the repayment period, the more documentation is required to prove the hardship.

Leslie M. Cumber is an associate in Gordon Feinblatt’s Health Care Practice Group. She may be reached at (410) 576-4248, or lcumber@gfrlaw.com.