Best Practices for How to Avoid an Audit

As payors both in government (Medicare) and the commercial arena (private plans) see the recoupment rate of services billed incorrectly or non-compliantly skyrocket, the payor audit is not going away anytime soon.

This awareness is now producing more audits of physicians than ever before, directly contributing to higher rates of denials. Audits take time and resources that you don’t have. You want to be compensated fairly for the work that you are performing, and do what you do best – provide quality care for your patients. But payors also do not want to pay thousands of dollars to providers that cannot or will not support the work they are doing.

When it comes to avoiding an audit, there is a lot to consider, and every situation is unique. However, here are some professional tips that can help keep you doing what you do best. It may not help you avoid an audit altogether, as it is more “when” than “if,” but we can address what it takes to be “audit proof” in this climate of payment recoupment.

First, Understand Your Data
Are you an outlier? Don’t be afraid to ask your coding and billing departments to run a report to compare you to other providers of your specialty. Or run that report internally, and gather specialty-specific statistical information from entities like the Medical Group Management Association (MGMA), American Health Information Management Association (AHIMA), and National Society of Certified Healthcare Business Consultants (NSCHBC), and compare your data with like specialties to see where you fare in the industry relative to your peers – and if you are an outlier.

Differences between your billing and reporting of services and that of national averages can be due to inappropriate coding and/or insufficient documentation. This could cause a loss of revenue in the future, if it hasn’t already impacted your practice.

Overuse of Modifiers
A common misconception is that your claims won’t get paid unless you append certain modifiers on them all the time, such as modifiers 25 and 59. However, these should only be used if certain criteria are met, and unnecessary use may land you in an audit. The -59 modifier is consistently over-used, and triggers more audits than any other CPT® modifier.

Time is Money
Time-based codes are scrutinized heavily. Did you submit claims for an excessive number of hours in a day, not just to one payor, but cumulatively? Think about it, especially as 2021 revised evaluation and management (E&M) rules are soon upon us, and the “time factor” will be used more often. Are you meeting that 40-minute criteria for a Level 5 established patient visit, when 50 percent or more is spent on counseling and then billing 10 at this level in a four-hour period? Do the math; the payors have, and it will only flag you for an audit for suspect claim submission.

Know Your Denial Rate
What is your rate of denials? If you don’t know, this could be problematic. You can learn a lot by looking at the rate that your claims are (or, more importantly, aren’t) getting paid. It’s amazing how many practices do not track this information, and are not aware of consistent denials that a payor could be tracking to eventually audit you.

Do it Right the First Time
Now, this may seem like a silly thing to say, but the point is, don’t try to experiment when you are sending in documentation and billing to see what gets paid and what doesn’t. This would be like cooking spaghetti and throwing a noodle at the wall to see if it sticks. If it doesn’t and falls on the floor, that is the same thing that can happen to a claim not submitted correctly the first pass – and it can easily end up setting off red flags for payors.

Document it – All of it
The most important factor is your documentation. Remember, if it wasn’t documented, it wasn’t done (or a better way of saying it: it isn’t supported). You could end up not getting paid for the service. Everything, from the completeness of what’s documented and how it’s phrased to simple things like signatures (or, as electronic medical records (EMRs) like to call it, “authentication of the record”) matter.

Avoid Copy-and-Paste Documentation
While it is acceptable to use templates, your documentation must be patient-specific. The Recovery Audit Contractors (RACs) have been chastised by the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) for not giving this issue enough attention; expect greater scrutiny in late 2020 and beyond. Boilerplate wording may be your starting point, but it only passes muster when made patient-specific.

Where the Patient is versus Where You Are
Billing for services that are considered “incident-to” still has certain requirements. This is a Medicare billing rule, but many commercial plans also follow their rules. If you are on vacation, making rounds at the hospital across town, or somewhere other than physically in the office space, this is an issue, as far as incident-to compliance.

Under- and Over-coding
Under-coding (when the code billed has less value than services documented) and over-coding (when the code billed for is more expensive services than documented, also called “upcoding”) are both improper representations of rendered services and could flag you for an audit, whether you’re billing all Level 2 codes or all Level 5s. Coding needs to be compliant either way.

Unbundling of CPT® Codes
You may find it more lucrative to bill for multiple CPT codes even when a single, more appropriate code would suffice. However, this typically is a red flag that points to intentional forms of over-coding. The instructions for use of the CPT® code book direct, “…do not approximate a code … if a combined code is available, use that code in lieu of using several codes to describe the service.” Staying abreast of the latest codes used by your specialty helps, as well as following the bundling rules.

Obsolete Coding
Coding and billing professionals are responsible for keeping up to date with the changes of code sets such as the International Classification of Diseases, 10^th Revision (ICD-10) from the World Health Organization, Current Procedural Terminology (CPT®) from the American Medical Association (AMA), and Healthcare Common Procedure Coding System (HCPCS) from the Centers for Medicare & Medicaid Services (CMS). Most of these are updated annually. Many coders are still using codes that have been either deleted or are not valid anymore. This can not only flag your practice for an audit, but can also have a direct effect on cash flow and your practice reimbursement.

When you receive an audit demand, look for red flags by asking the following questions:

1. 1. Have you recently expanded into new services or items, such as durable medical equipment (DME) or acupuncture services?
   2. Have you switched your billing company, personnel, or billing practices? This can mean a switch to a new system or following new guidelines.
   3. Has an employee with knowledge about your billing practices recently left? Was this departure on good terms?
   4. Has anyone questioned your supervision standards or other components of your practice that may relate to billing and reimbursement?
   5. Have you had a visit from an insurance payor representative asking questions and requesting an “educational meeting?”

These are only a few of the situations that can precede an audit or investigation. If you are not already running independent audits on a regular basis, any one of these red flags should prompt you to do so. Be proactive. Protect your practice. If you are in need of an external auditor, contact us directly at TerryFletcherCPC@aol.com. It is in your best interests to assess your billing, coding, and documentation practices before an audit is requested.