Problem Solvers

Assessing CMS's Audit Ramp-up

Providers will see an increase in claims audits from Medicare and other funding sources in 2022. Audit expert Wayne van Halem offers insights into what they can expect for this year.

• By David Kopf
• Feb 01, 2022

The New Year has arrived, and CMS’s audit game plan has started to come into focus. In June 2021, CMS indicated that it intended to audit claims filed during the COVID-19 pandemic but held off on eventually implementing that plan. Instead, it focused on claims for items that didn’t impact the country’s Covid-19 response, such as wheelchairs and incontinence items.

CMS appears to no longer be hesitating on those audits. The agency is quickly expanding audit programs, and it’s important for providers to understand how that will unfold. To help, audit expert Wayne van Halem, president and founder of the audit consulting firm The van Halem Group (vanhalemgroup.com), sat down with HME Business to share his insights into CMS’s plans.

Shifting into High Gear

“We are definitely seeing an increase in audit activity across the board, and not just with Medicare audits,” van Halem says.

Those increases include audits in Medicaid and managed care plans. Also, van Halem notes his firm has clients that are undergoing audits on equipment that were part of the waivers during the public health emergency, with dates of service during the PHE and had CR modifiers on there. While CMS might have said that it would resume claims audits gradually, it’s now shifting into a higher gear.

“We’re seeing audits for even respiratory equipment now,” he says. “So they’re definitely back. What we haven’t seen yet is how they’re going to handle the CR claims, particularly for respiratory equipment, because there are no LCDs that were in effect, those requirements were waived,” van Halem adds. “So we’re waiting very patiently to try to see what that outcome is.”

So, with no LCDs in place and waivers on claims, how did experts like van Halem advise providers to handle the situation?

“The advice that we generally gave our clients is, if you can get the documentation, please try to do that,” he says. “If not, then our counsel is to remember that the purpose of the waivers was to help people access equipment that they needed so that providers can help free up space in hospitals and get these patients home where they’ll be safe. And in the spirit of the purpose behind it, then yes, they utilize the flexibilities and put the equipment out.”

So, If a provider had the standard written order and the information from the doctor showing why the equipment was needed for the patient, then the advice was to proceed with the claim and use the CR modifier accordingly, van Halem says.

“So that was our advice,” he says. “And now, those are the first claims that we’re seeing getting audited. So I am really curious to see how that pans out.”

To help, van Halem says that his firm has reminded the auditors it is working with to take into consideration that the PHE flexibilities were in place and that LCD requirements didn’t apply.

“I can’t imagine they won’t,” he says. “If they don’t, then we’ll certainly be getting CMS involved in it because that was the instructions from CMS to the contractors during that period.”

Other Payers & The ALJ Backlog

It’s not just Medicare that is expanding its audits; Medicaid and managed care programs are also ramping up their claims audits.

“Very similarly, we have some managed care plans on the Medicaid side, in various states that are auditing suppliers on respiratory equipment that was provided during the pandemic,” van Halem reports, adding that not all the state programs get to make their determinations on their own. Some state Medicaid and managed care programs kept their Covid-19 waivers for audits on items such as respiratory devices in place while some ended them earlier. Also, some of them still have waivers in place, but are also auditing.

Interestingly enough, the commercial plans never really subsided during the pandemic.

“So even when Medicare had seized all audit activity, we still had clients that were receiving audits from commercial plans,” van Halem notes. “And that seems to be consistent continued throughout the public health emergency.”

Lastly, another factor that will cause an increase in audits is the reduced backlog in cases being heard by Administrate Law Judges at CMS’s Office of Medicare Hearings and Appeals.

“It’s getting resolved a lot sooner than we had anticipated,” van Halem notes. “Those ALJs are staffed to handle about 300,000 appeals a year, and currently, they’re only receiving about 35,000 a year. And the only way to get more appeals in the workload is to do more audits.

“So I’m really concerned and watching that backlog to see what CMS’s response to that is,” he continues. “We have a feeling that they’re going to utilize the RAC program to increase that workload. … So, we’re going to be watching that very closely.”

This article originally appeared in the Jan/Feb 2022 issue of HME Business.