Audits: Audits on the rise

Q. Is it my imagination or have the last few months brought an influx of audits?
Monday, January 25, 2016

A. It is not your imagination! Aside from your standard DME MAC prepay and postpay audits, three contractors in particular have “upped their game,” so to speak, and the DMEPOS community is certainly feeling the pressure. 

In early fall, we saw Strategic Health Solutions (SHS), the Supplemental Medical Review Contractor (SMRC), begin sending out ADR letters for oxygen, nebulizers and CPAP claims. CMS provides direction to SHS on the claim types to audit. 

The ZPICs have also been very active over the last few months, most likely because their contracts are nearing time to rebid. 2016 was to be the year that the ZPICs transitioned to UPICs, taking on Medicare and Medicaid functions, but that has yet to happen. In the interim, expect to see more and more audit letters coming from the ZPICs in an attempt to show CMS the money they have saved Medicare, all with the goal of retaining or gaining          contracts. 

Lastly, CMS extended the current RAC contracts, while the new national RAC contract is up for bid. The RACs perform reviews on CMS-approved issues only, which means that any issues previously posted to the RAC websites could be currently audited. Check your RAC’s website to see if the items you bill could be audited. 

The results of these audits are typically overpayments to you, the supplier, and more frequently, extrapolated overpayments. If you owe an extrapolated overpayment amount, be sure to read your demand letter carefully and adhere to the timelines provided. Appeal the denied claims and challenge the extrapolation, when possible. If necessary, implement a corrective action plan and document your improvements to avoid harsh consequences for continued errors, such as suspension of payments or revocation of billing privileges.

Kelly Grahovac is senior consultant at The van Halem Group. Reach her at