The inevitable audit and empowered provider

So many audits, so little time! That's how many suppliers are describing the overwhelming number of audit requests they are receiving from CMS's contractors. With some businesses receiving upward of 500 documentation requests for claims up to three years old, it's no wonder many feel that they are being unfairly targeted. But no matter how we feel about it, the number of audits isn't likely to lessen, and we cannot expect CMS to lighten up on its demand for utter compliance with medical policies. That's why those suppliers who want to stay in business must get beyond the initial "this isn't fair" reaction and start taking action. Yes, it does feel good to vent, but we all know it won't get us paid any faster.

That's not to say that taking action will be easy. For many suppliers, the fight to stay in business isn't going to be a fair one. With the ability for a DME supplier to be audited by five separate contractors (DME MAC Medical Review, CERT, PSC/ZPIC, RAC and OIG) the odds are not in our favor. And these contractors are currently having a field day with DME claims. So we end up with a lot of red tape and money-starved pockets.

Many suppliers have also found themselves audited not only for new claims, but also for claims that have historically been paid without problem. When you look at statistics like the 2009 CERT payment report, which shows a whopping 57% error rate for DME claims or the pre-pay audits from DME MACs that cite error rates approaching 95%, it's no wonder audits are on the rise. But what do these numbers really tell us? If you dig a little deeper, you'll find that the error rates weren't always this high. Many report summaries attribute the increase in error rates directly to the contractors' inability to use their own judgment when determining if a claim is payable. In the past, this was considered acceptable practice; however, CMS has since directed contractors to only make decisions based on the documents directly in front of them. That means the majority of denials are not attributable to a true absence of medical justification, but to technical errors or minor missing components.

So what are suppliers to do?

Be proactive

To start with, don't let audits surprise you. Suppliers who proactively perform self-audits on their own charts have an opportunity to identify vulnerabilities and implement corrective measures. Correcting internal procedures is fairly straightforward. The real challenge comes from elements outside your control.

The turning point for many audits comes when a supplier is asked for specific documentation from the physician's notes. Auditors do not grant leniency to suppliers who argue ignorance, and CMS has taken the stance that since suppliers get paid for DME, they are ultimately responsible for proving its underlying need.

However, by choosing to take action you can prevent yourself from falling victim to the unknown. Odds are you have concentrations of services that originate from repeat referral sources. Take a statistical approach and target your highest risk areas based on volume. I like to think of this approach as assigning a "credit score" to your doctors based on the quality of documentation in their charts. Immaculate charts rate higher and decrease the audit risk level posed to your company. You don't have to audit every chart, but you should do enough to get comfortable with your referral source's documentation practices. If the charts are scant and rarely document the need for DME, then you need to educate the physician, and start refusing orders if the charts don't improve. Otherwise, you are simply accruing a liability for every product you continue to dispense for that doctor.

Get organized

When you receive audits, ensure that there is a process to track and monitor responses to documentation requests.  You must have a lead person who coordinates the collection effort and is responsible for meeting response deadlines.

Get results

After collecting the necessary documents for your response, it's imperative that you assemble a "fool proof" response package. Good charts don't always equate to good results. Having a tight response package can noticeably decrease the number of error findings. Remember, you are not the only supplier being audited, and auditors must review hundreds of charts on any given day. If your package is haphazardly thrown together, the auditor won't spend a great deal of time searching for a way to pay your claim.

When putting your package together, get to the point in as few words as possible. Assume the reader doesn't want to read. A "fool proof" package will include a short cover letter or table of contents that systematically addresses each of the requested items (as bulleted in the original development request from the auditor), along with pertinent dates and key evidence that is documented in each of the attachments. This strategy may seem simple, but it works. hme

Andrea Stark is a Medicare consultant and reimbursement specialist for medical equipment suppliers and pharmacies. She founded MiraVista LLC after working for the Region C DMERC, and now provides consulting and education services throughout the country. Reach her at andrea@miravistallc.com or 803-462-9959.