Business Solutions

Scaling CMS's Audit Mountain

There's no easy way for providers to soar over Medicare audits, but preparation and diligence applied to claims documentation today can help providers scale what seems like an insurmountable challenge tomorrow.

• By Joseph Duffy
• Mar 01, 2015

Today’s audit of an HME provider’s Medicare (or even private payor) claim can be a very stressful and costly event. All documentation maintained by the provider to support the medical need for the claim and performance of the service being paid is also subject to audit. So the maintenance of accurate and retrievable documentation is crucial to the successful completion of an audit.

You need to adopt sound strategies for good documentation because there are no true ways to become audit-proof and too many factors to predict in good confidence which claims will be chosen.

“Audits are only random in terms of CERT — and that is only because they do a random sample of claims to review,” says Kelly Grahovac, Senior Consultant, The van Halem Group, “Contractors use various factors when determining the types of services to review. There are definitely algorithms or ‘triggers’ that contractors use, such as spikes in billing or denials (supplier specific review) or date of death and inpatient dates that are system edits. And as always, codes with high reimbursements or those that are susceptible to abuse are always on the radar. Codes with high CERT error rates are often identified for a widespread prepayment review. Documentation on its own is not a trigger, but if there are certain codes that require specific documentation, such as those affected by the face-to-face requirements, then those codes could be audited.”

Because all documentation dealing with Medicare is at risk of being scrutinized once a claim is audited, whether pre- or post-payment, and because the time frame in which Medicare can perform an audit is six years, it is essential that providers maintain accurate, complete and easily accessible backup for all submissions, says Esther Apter, CEO, MedFORCE Technologies, Inc.

“Our clients have dramatically reduced the strain of audits by using a process management tool that requires the completion of defined documentation at various stages in the initial authorization or reimbursement process,” she says. “Taking care of proper documentation along the way means you won’t have to scramble after the fact and delivers confidence that you can instantly retrieve everything you need and reduce the burden of audits.”

What’s Being Audited?

Kim Brummett, vice president of Regulatory Affairs for the American Association for Homecare, says that documentation being audited includes proof of delivery, written order prior to delivery, detailed written order, ABN, and medical necessity documentation in addition to lab results.

“There are no specific types of documentation being audited more than others,” she says. “Each MAC chooses what it wants to audit. This information is available on their websites, both what is coming up for audit and how these audits score quarterly or whenever the MAC feels like posting the information.”

Apter points out that as reported in the 2013 CMS Audit Report to Congress, only 2.3 percent of all claims and only about 2 percent of the disallowances recovered are DME claims. However, 21 percent of claims corrected by Recovery Audit Contractors (RAC) are DME. Other sources have shown that while DME is 4 percent of Medicare spending, the DME MAC error rate is 51.9 percent compared to Carrier/MAC (9.9 percent). Overall, DME is disproportionately affected by CMS’s policies, underlining the need for stringent record keeping in the DME/HME space.

“The most commonly reviewed documents are physician office notes, and this is across the board for all provider types,” she says. “HME providers are also often audited for delivery documentation, special documentation required for specific types of DME, such as proof of utilization of CPAP devices, and oxygen levels for oxygen providers.”

Grahovac says that from an HME perspective, many of the codes affected by the new face-to-face requirements are seeing increases in audits.

“It’s easy to enact new rules and then see if they are being followed,” she says. “A change as simple as the requirement to have the physician’s NPI on the order is an easy error that can result in an overpayment, which brings more money back into the Medicare program. And, as always, the legibility and quality of physician documentation is on the front of the audit standard. I’m not familiar with a statistic matching documentation to audits per say, but the CMS website does provide data on the DME POS categories with the highest denial rates. [http://go.cms.gov/17mzs3g]. Of course, each of the required documents outlined in the applicable LCD is going to be reviewed as part of any audit, for example, order, proof of delivery, refill requests and continued medical need.”

Why Are Audits so Challenging?

According to Apter, HME provider’s audit challenges are much the same as other types of providers. First is the sheer volume of audit requests and the costs associated with providing requested documentation in a traditional paper-driven office. Offices using paper files can be forced to invest many man-hours in finding, copying and preparing documentations for audits. Auditors frequently go back two or three years and can request documentation from as long as six years ago. Older files are often difficult to find. Secondly, tracking audit results and follow-up is a concern. Appeal time limits can be tight and missing a date can cost a supplier its right to appeal, resulting in a loss of revenue. Using a process manager that tracks these deadlines and can even guide providers through the process is key to ensuring that these opportunities are not missed.

“Even once the appropriate documentation is pulled together, it can be a challenge for HME providers to stay on top of submissions,” Apter says. “When you send by email or fax, it can feel like your submission went into a black hole. That is why we had MedFORCE certified as a one of the first HIH providers, so we can assist our clients in electronic submission of medical documentation.”

Carri Johnson, vice president of Operations, Revenue Cycle Management, Brightree, says that one of the greatest challenges within the HME auditing process is responding to audits within a timely manner. The process of gathering all of the required documents requested in the audit and then ensuring that all of these documents are valid can be very time consuming. Given that a response is expected from the date of the letter, time is of the essence. If you fail to send required documentation in a timely manner, she says, you will begin to receive additional audits, which could lead to an unmanageable workload. In the case of rentals, neglecting to respond to audits will cause the payor to recoup money not only for the original audit date for a rental, but also for all prior or subsequent rentals.

Grahovac says the biggest challenge for HME providers is with the clinical documentation.

“A supplier can have wonderful internal documentation, but that claim will not pay if the physician’s notes don’t back it up,” she says. “Suppliers not only have the challenge of getting the physician to provide documentation, but even worse, they are tasked with educating them on what the documentation needs to say. Then, don’t forget — it has to be signed. And that signature has to be legible. A supplier has many obstacles in providing a beneficiary with equipment.”

How to Make Sure Your Documentation Is Audit Ready

Providers cannot prevent their claims from being audited, says Sunil Krishnan, Vice president of Revenue Cycle Management, Brightree. However, responding to audits in a timely manner decreases the risk of receiving numerous additional audits. In order to keep up with incoming audits, providers should have a process in place to quickly locate and assemble all necessary documents for a claim. The use of an intelligent technology solution that automatically prompts for the necessary documents will help keep the process consistent.

“Although it is impossible to completely mitigate the risk of an audit, implementing validation rules within your billing system will help audit-proof claims by ensuring all required documents have been obtained to support a potential audit,” he says. “These validation rules reflect the requirements of different payors and will automatically prompt for collection of payorspecific information. This will improve efficiency while still helping to ensure an audit-proof claim.”

Krishnan says it is also important to have all documents to support an audit and not just the documents for a claim to get paid. Progress notes is an example where you may not initially need documentation for the claim to get paid; however, this information could be requested later in the case of an audit.

Mary Ellen Conway of Capital Healthcare Group says her office hears constant cries from providers who can’t get prescribers to hand over documents that providers need in case of audits. In these types of desperate circumstances, she says it is perfectly fine to ask for outside help.

Conway says her clients will have her make presentations to prescribers, such as discharge planners, where she explains the importance of getting the providers the needed documentation. She lets prescribers know that the provider can’t afford to pay back millions of dollars years from now after being audited. She points out how frustrating it can be for prescribers who work with other providers that don’t collect the documentation and set a different precedent. At the end of the day, it’s easier for the prescriber not to do the work.

“‘So how can we help you?’” Conway says to reluctant prescribers. “‘Can we give you templates? What will make your life easier?’” Conway says they will supply them with outside information and hold conferences to educate them about long-term consequences of not using a provider that follows the rules.

At the end of the day, Conway says a prescriber who refuses to help the provider is basically helping to eliminate local provider businesses that will not be able to afford the final tally of an audit.

To help prescribers comply with your documentation needs, Conway says to hand them the resources they need, such as a copy of the LCD, and highlight all the items they prescribe to you. Make sure it’s laminated or in a state that can’t be wrinkled or lost. Conway’s No. 1 tip to be audit-ready is to collect the documentation from the prescriber at the time of the referral.

Brummett suggests that providers follow all of the rules; know what the requirements are in the PIM, supplier manual and the LCDs; and be sure the intake process evaluates all of the requirements before setting a patient up. Suppliers can use checklists provided by AAH, the DME MACs and other consultants.

Apter says you can mitigate audit risk with the following steps:

Become familiar with the provider manual and all regulations that affect the service of the product being provided. This ensures you will provide the service or product in a way that ensures you will be reimbursed.

Have a clear understanding of the activities needed to get from providing the service or product to payment, including the documentation needed to support each step. You need to have a line of sight from start to finish to make sure you stay on track.

Create a consistent process to assure that the necessary documentation is obtained at each step of the process. It saves time and effort to gather what is needed at the time of service, rather than have to backfill later. Train personnel to understand the process and all requirements. They need to be reviewing documents accurately to assure that they meet the requirements. Because of the quantity of rules and the fact that they often change, having a central workflow that forces users through the correct steps for each product line should help to ensure that the needed documentation will be on file to support payment in an audit.

Finally everyone should put in place a well-documented and implemented internal audit process that periodically reviews files for accuracy and completeness. This will catch any errors or incomplete files before it reaches the demanding CMS audit phase.

One of the biggest documentation mistakes you can make is not reviewing the clinical documentation you have on hand, says Grahovac.

“Too often, a supplier gets audited and the documentation does not substantiate the service,” she says. “Scrambling to obtain documentation from months or even years back is difficult and doesn’t always yield positive results. It’s almost like you are setting yourself up for failure. And know that if an audit reveals a large number of claims with little to no documentation for the services billed, that will inevitably result in more audits. The goal of these audit contractors is to recoup improper payments and they are going to go where the money is.”

Another documentation mistake is not having the documents on hand when a claim is submitted but believing they can be obtained if you get audited. Krishnan says in the event that a claim is audited, the payor will then ask the provider to provide proof of all the pertaining valid documents.

If the provider did not obtain these documents prior to submitting the claim, they might find it rather difficult to do so after the fact.

Grahovac says it’s important to remember that the supplier is responsible for educating the physician on the documentation needed.

“It would be ideal to have a good relationship with the referral source, allowing for open communication should the need for additional documentation or addendums be needed,” she says. “While that may not always be the case, from a business perspective a good habit to adopt is that of reviewing the documentation as it comes in to ensure it supports the equipment being provided. If there are repeated inconsistencies, consider your source and the risk involved in continuing to take on those referrals. The bottom line is that suppliers must be proactive in order to be prepared.”

Though difficult to predict, signs indicate that Medicare audits will continue to increase in both volume and frequency. With CMS encouraging contractors to extrapolate, Grahovac says the amount of funds coming back into the program is large.

“We are seeing some hope in terms of legislation by way of the AIR Act, which would allow — among other things — clinical inference to be reintroduced into the review process,” she says. “And with the current backlog of hearings nearing the 1 million mark at the ALJ, additional changes to the audit and appeals process are certain.”

This article originally appeared in the March 2015 issue of HME Business.