If there is no action against the provider at the end of the review, the practice should take proactive measures to conduct an internal/external review of a random sample of charts to correct any issues that were the focus of the payer audit. If for any reason the audit is not favorable, any claim that is denied should be reviewed for possible appeal. Make sure to visit the private payer’s website for its appeals process. For Medicare, the appeal process has five levels for denied claims:
- Redetermination from the intermediary/carrier;
- Reconsideration from a qualified independent contractor;
- Appeal to an administrative law judge;
- Appeal to the Medicare Department Appeals Board; and
- Appeal to a federal district court.
To protect your practice, it is imperative to know the appeal timeliness and requirements for each level of appeal, understand the reasons for denial at each level and be aware of recoupment timing. During the brief pause in the appeals process, establish an appeals team, which can include one or more of the following: provider(s), practice manager, coder, compliance officer and/or legal counsel. Every claim for possible appeal should be reviewed to ensure the auditors complied with correct coding guidelines and current medical policies.
Keep in mind, if there is a recoupment request and Medicare does not receive payment within 40 calendar days from the date of the MAC’s first demand letter, Medicare will recoup the full overpayment amount beginning on day 41, meaning the overpayment will be recovered from current payments due or from future claims submitted. In an effort to delay recoupment while performing an internal analysis, submit a rebuttal to your MAC within 15 days of the initial demand letter (no guarantee) and file appeal requests for the first two levels of appeal within specified time frames. Specifically, a provider must file the first-level appeal within 30 days of the initial demand letter to prevent recoupment through the time that a redetermination decision issues. If the redetermination decision is unfavorable, the provider must file the second-level appeal within 60 days of the redetermination decision. If the reconsideration decision is also unfavorable, Medicare will initiate recoupment 30 days after the reconsideration decision is issued. If the reconsideration is partially favorable, and the overpayment sum requires recalculation, recoupment will begin 30 days after the recalculated demand.
Although audits may seem scary, proper preparation and proactive measures can be put in place to mitigate the chance of being audited and protect providers, their staff and the overall practice. Most experts agree the best defense is a good offense. It is important to assess the risk of an audit before it occurs, because unfavorable audits jeopardize the financial viability of a practice. Although it may create more work initially, experts agree that performing a minimum of two internal audits per year may ultimately help reduce any external ones; quarterly internal audits are recommended.
