How to Handle a Medicare Audit

medicare graphicJust because you may be facing a Medicare audit doesn’t mean that it is the end of the world. However, it may be all in how you and your staff respond that has an effect on the overall process.

It is true that a Medicare audit needs to be taken seriously. This is because each one has the potential to result in a serious overpayment assessment, but this is not cause for unnecessary alarm. When the audit is handled properly, there is usually very little impact on the practice.

Most Medicare audits are conducted by a Medicare carrier and can fall into one of two categories: an analysis of claims after payment and claims before Medicare pays the physician. Prepayment audits are the most common type of audit. Carriers will do random sweeps in which they want to look at only one or two claims from every physician.

The simplest type of post-payment audit is the focused review. This is where the carrier is simply trying to educate the physician about an issue within the medical coding. The carrier may ask the doctor to provide a refund for overpayment. In some cases, the doctor may need to submit documentation with every future claim that they make to avoid the error again.

The carrier may also decide to perform a comprehensive review. This is where they go over a small sample of claims made and they use the results to calculate a projected overpayment for a certain period of time. Since the initial analysis is not considered valid, the carrier will usually give three choices to the physician. They are:

•    Waive appeal rights and submit evidence that proves the assessment wrong.
•    Pay the assessment.
•    Request that the carrier examine a larger sample of claims while also giving the physician the right to appeal the results.

The last option tends to be recommended because of how the initial assessment can be wrong. Reviewing a larger sample of claims can prove that the initial assessment was not correct. This also ensures that the physician does not give up their right to an appeal. In other words, it gives the best of both worlds.

The Scope of the Audit

To get an idea of the scope of the audit, simply look at the number of visit notes that are requested. A request for one chart is nothing to be really concerned about. A request for five or more charges suggests that the carrier is looking for a miscoding pattern. Multiple coding issues can result in hundreds of thousands of dollars being lost and, in few cases, there may be civil or criminal penalties. It is ideal to be prepared.

Your Response to the Carrier’s Request

If your Medicare carrier sends you a letter requesting a certain number of charts, you should immediately contact your attorney and fax the letter to him or her. Your attorney can hire a coding expert to review the charts. A coding expert can identify any potential issues so that you are prepared before the charts are submitted to the carrier. If the coding expert cannot complete the review before the deadline, you can ask the carrier for an extension or have the expert conduct their review the same time the carrier does. This gives you your own expert while the carrier uses theirs.

All charts should be reviewed by you before you submit them to the carrier. Everything should be provided that supports your claim. For instance, a history that refers to an earlier note means that the earlier note needs to be provided. If any documentation is missing that supports the claim, a dated addendum can be provided or the cover letter can contain an explanation.

Try Not to Panic

Most of all, just try not to panic. Almost everyone believes that a documentation problem is going to result in having to cough up money or worse. The fact is that Medicare laws do not require that a service be documented in the medical record in order to secure reimbursement. You are not even required to use the documentation guidelines. What the law does require is that you provide information that shows you provided the service. It all comes down to proof. Of course, having documentation for each service provided will be your proof, but generating proof later when it is needed may be enough.


If you are faced with a Medicare audit or you wish to prepare in case there is one, MD Pro Solutions can help you. Call us at 508-946-1665 or complete our contact form and someone from our office will get in touch with you.