Submitted by Antonio Arias, MBA, CHBME on Thu, 06/18/2015 - 10:00

Is Your Practice at Risk for a Payer Audit?

Is Your Practice at Risk for a Payer Audit?

Even if everyone at your practice loves surprises, there’s one surprise that’s unwelcome: a payer audit. Being audited by Medicare or another government payer is a top fear of many medical practices… one that almost always feels like a threat.

Payer audits are intimidating because so few practitioners and medical practice managers understand their origins. Armed with just a baseline understanding of the trigger factors (too much high-level coding; overuse or misuse of modifiers), some practices over-correct to avoid issues. But by deliberately undercoding encounters to avoid attracting unwanted payer attention, those medical practices are selling themselves short.

One way to lessen the odds of an audit is to contract with a medical billing company. A medical billing firm with the resources, detailed practice management knowledge, and capacity to manage all of your claims can help you spot audit-inducing issues before they happen. If that’s not an option for you, it’s important for your team to assess whether it’s at risk and to course-correct as necessary. Here’s a rundown of what you need to know.

The most obvious risk factors are, well, the riskiest. Using high level codes at a higher frequency than is typical for your specialty, or using modifiers 25 or 59 (and its new “replacement” modifiers XE, XP, XS, and XU) at a particularly high rate, are audit triggers.

Some types of service are at higher risk than others, and it varies broadly by specialty and geographic region.

Thanks to volume, the payers have the power. Private and public payers service large populations of practices, so they have the data and systems to compare your practice against others in your same specialty. Without that advantage, it’s easy for your practice to feel like it’s in the dark. To combat that...

Start by assessing yourself internally. If there’s more than one physician in your practice, audit them against one another with an eye for their frequency of high-level visits, their use of modifiers, and their most common services performed.

Then, use external resources to see how you stack up to your revenue cycle management peers. You’ll never have as much information to work with as a payer, but there are some companies and organizations that can help you see where your billing operations stand among your specialty.

  • Specialty groups: Check with yours to see if they provide any reports with normative data to their members.
  • Medical associations - especially the MGMA: Use the median relative value unit (RVU) data for your specialty as a baseline for payers’ expectations.
  • Commercial vendors: Large healthcare technology providers often offer their data for purchase on a subscription basis.
  • The Office of the Inspector General: The OIG has reported on practices that code for the two highest levels of service in every category more than 95% of the time. Assess your clinicians’ coding practices against those noted, then review the annual OIG Work Plan. It pinpoints which medical services the government considers “of interest.”
  • Medicare: Its CERT (Comprehensive Error Rate Testing) reports identify types of services and CPT codes that have high error rates, putting you at risk for audits.

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Topics: Medical Billing, Revenue Cycle Management, Practice Management, Payer Audit

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