We survive an audit, so can you

Tuesday, November 23, 2010

Just after the July 4 holiday, Rx Stat Inc. started getting letters from a ZPIC auditor. We thought we were safe. We don't cut corners with paperwork, and we only bill items after all of the required documentation is collected.

We have been in business for 14 years and, compared to other DME companies, we use a lot of technology. We maintain all of our patient information in a custom-built computer database, and we document all patient and physician contact in that database. We belong to AAHomecare, The VGM Group, The MED Group, the Florida Association of Medical Equipment Suppliers and multiple pharmacy organizations. I read all the trade magazines and know many industry consultants personally. We have Brown & Fortunato on retainer and attend CMS meetings and conference calls regularly.

 Still, we were wrong about being safe.

We thankfully survived the audit, but it was the most difficult time of my entire business and personal life. After 90-plus days of zero income, Rx Stat was released from its audit. Here are a few suggestions that will allow you to stay in business when those ZPIC letters start coming.

Build a cash cushion that will allow you to keep your doors open for at least three months with zero income. When you are audited, your cash flow stops until you are released. If you get released, it will still take months to collect the money you are owed. Most companies that get audited lay off all their employees and stop taking new business. This destroys your business reputation and hurts your future referrals.

Ask for chart notes with each order. The auditors will review the charts for proof that the doctor has charted the continued use and need of the prescribed equipment. It does not matter that "no one else asks for this paperwork." You must have chart notes and they must mention the equipment. This was our biggest reason for denials. If the doctor does not chart well, teach them. If they refuse, you are foolish to accept future business. You will get denied and recouped. Ask for the chart notes before you get audited. If you wait, you will not know if the doctor charts correctly. You only have 30 days from the date of the letter to respond to the ZPIC request for additional documentation and you do not want to waste time chasing chart notes. Every chart note must be legibly signed by the physician that wrote it. If it is not signed, it must be attested. No signature means denial.

If the LCD says you need a specific piece of documentation, you better have it. There are no exceptions.

Hire a consultant to perform internal chart audits. We thought our internal review process was very good, but it never hurts to have an extra set of eyes.

Do not lose your temper with the auditors. They are doing a job and they get paid to find reasons to deny your claims. It does not matter to them that you are about to lay off your entire staff. They do not care if you will go bankrupt. They answer to the OIG, FBI and CMS and are looking to find companies that are committing fraud and abuse. If you get a partial pre-pay audit and you do not respond with good documentation in a timely fashion, you will most likely go to 100% pre-pay audit on all of your claims and it will be very hard to survive.

I suggest you be prepared, because it is not a case of if, but when, you will be audited.

Sam Jarczynski is president and owner of RxStat in St. Petersburg, Fla.