CMS quietly resumes practice audits

September 1, 2020

If your organization is selected for an audit, remember that you have options.

The ongoing pandemic and resulting public health emergency (PHE) has brought about massive and quick changes in the healthcare industry, notably among them the temporary suspension of Medicare Fee-For-Service (FFS) audits. The Centers for Medicare & Medicaid Services (CMS) suspended most audits on March 30, 2020, and this change was nearly universally welcomed by the healthcare industry. 

Although the PHE continues, the hiatus of audits was short-lived. CMS announced the end of exercising audit enforcement action during late July, and it resumed program integrity audits effective August 3, 2020. It acknowledged the continuing PHE, but determined the importance of and need to resume medical review activities.

If your organization is selected for an audit, remember that you have options. CMS recognizes staffing and resources to respond to audits may be limited. Providers may contact Recover Audit Contractors (RAC) to explain any COVID-19 related hardships they are experiencing that may impact response time. 

Many assumed payors would not audit claims adjudicated during the PHE, especially because of the associated waivers issued by CMS. The agency communicated it would audit for potential fraud or abuse during the PHE. This guidance was somewhat confused in the industry with many assuming CMS and commercial payors would audit claims adjudicated during the PHE.

CMS published its last approved RAC audit in February 2020. On August 3, 2020, the agency published five new RAC focus areas including ambulance services, hospital inpatient, hospital outpatient, ambulatory surgical centers, and professional services. 

This audit downtime has enabled payors to shift their focus to data-mining claims. This is why medical records requests and overpayment demand letters from RAC contractors and commercial payors will likely resume during the next few weeks.

Audits, disruptive during the best of times, become even more so when fewer staff are available to process record requests and otherwise respond. Timely response is imperative. Third party medical record release vendors have gained appeal among practices. Vendors can handle all third-party record requests without administrative or financial burden to an organization. The resources and expenses are left to the vendor. Outsourcing record request is one part of the equation. There will be overpayment letters which flow from all payor audits. 

Heed every overpayment and audit letter, whether from a government or commercial payor. The rules applicable to telehealth, supervision, inpatient rehabilitation facilities, and nursing homes, changed rapidly at the onset of the PHE. This increased the likelihood of audit errors, misapplication of rules, and application of rules and regulations to inapplicable dates of service.

Nearly all healthcare providers have experienced a financial hit. Avoid prematurely and unnecessarily returning any overpayment by confirming all overpayments before you accept audit findings. Qualified staff or third-party vendors should re-audit records identified as having overpayments. Parameters of the confirmation process must include all appropriate regulations and/or payor policies that were applicable on the date of service. 

Claims adjudicated during the PHE, and particularly within the first 60 days of the PHE, may ultimately be subject to several different rule changes that varied from day-to-day. This is why these audits are at higher risk of errors having occurred. Generally, audits reflect a specific date range and auditors apply appropriate payor rules. The appropriate guideline or regulation may not be applied correctly or to the applicable timeframe which could reveal an overpayment in error. Numerous executive orders at the state and federal levels have further complicated audits during the PHE. 

The uptick of audits will continue to approach previously unseen levels. Providers need to understand how to efficiently handle and have a well-designed process in responding to the audits. 

Prevention is always best practice. Learning from audits and conducting carefully selected internal audits can help avoid payor audits or avoid an overpayment. 

Joe Rivet, Esq., CCS-P, CPC, CPMA, CEMC, CHRC, CHEP, CHPC, CHC, CACO, CAC, is a reimbursement attorney and founder of Rivet Health Law, PLC. Prior to becoming an attorney he worked in coding, billing, and reimbursement and led fraud and abuse divisions at two large payors. His practice area focuses on provider reimbursement, compliance, and third party payor audits and appeals.