Audits: Use two-tier approach

Q. We received our audit results, which include a large amount of money owed to Medicare based on an extrapolated overpayment! What do we do now?
Wednesday, April 20, 2016

A. To reduce or remove the extrapolation, you will need to appeal the overpayment determination, addressing both the individual claims reviewed in the audit and the extrapolation itself. Consider this a two-tier appeal process. First you want to appeal each claim that was denied in the audit. Specifically address the denial provided by the auditor. When applicable, obtain amendments or attestations. The goal is to have the denied claims overturned, as this will result in a reduction in the error rate and a recalculation of the extrapolated amount due. 

The second tier in this process is to challenge the extrapolation itself. This is more complicated and will require you to employ a statistical expert. The goal is for your hired statistician to review the extrapolation for validity. If it can be proven that the sample was flawed, the extrapolation could be excluded and the amount you owe will be reduced to the actual claims overpaid. 

If you are unable to pay back the overpayment to Medicare by the due date, you can submit an appeal to stop the recoupment from occurring, but only at the first and second levels of appeal. It is imperative to understand that an appeal prevents the recoupment, but does not stop interest from accruing. After the first two levels of appeal have been exhausted, the debt plus accrued interest is due to Medicare in 30 days. After 60 days, the contractor will refer your debt to the Treasury which can make claims on your surety bond. Review your DME MAC’s website to learn how to  apply for an Extended Repayment Plan, should the final overpayment amount be more than you can pay at once. hme

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