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3 Best Practices for Surviving an Audit as a DME Supplier

3 Best Practices for Surviving an Audit as a DME Supplier

3 Best Practices for Surviving an Audit as a DME Supplier

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We’ve all seen the headlines. A few bad actors committing fraud have increased the scrutiny of the DME market, creating a mountain of pain and paperwork for the rest of the industry. The prevalence and the cost of fraud has led to an increase in audits, from Comprehensive Error Rate Testing (or CERT) audits to Medical Necessity Audits to Recovery Audits contracted by the Centers for Medicare and Medicaid Services (CMS).

And those are just the audits from one government agency. The expectation is that audits from all commercial insurers will increase going forward. Today, going through payer audits is an everyday part of doing business for DME suppliers.

Mountains of Paper Compound the Risk

The nature of healthcare in the U.S. means piles of paperwork – from invoices to payments, medical records to insurance forms, workers comp to authorizations. If you run a DME, you’re no doubt handling a high volume of incoming and outgoing correspondence related to your claims processing.

That volume and variety compounds the risk of audits, because it means a DME company has to find the proverbial needle in the haystack when asked to show proof.

“The healthcare industry has an amazing amount of complexity in how it documents not only the medical treatments, but payments for those treatments,” said John Koch, COO and co-founder of MediStreams, a leading provider of remittance, reconciliation, and payment automation solutions. “We’ve talked to DMEs who lost money simply because they couldn’t quickly find the information they needed to process a claim, and others who have lost money because they couldn’t respond to an audit in time.”

Best Practices to Streamline Paperwork and Strengthen Compliance

The good news is that the challenges associated with both managing paperwork and responding to audits can be addressed through the same best practices – practices that maximize resources and revenue, while preparing any DME provider for an audit.

Problem 1

Responding to an audit takes time and expertise. How can you best prepare so it’s not a last-minute scramble?

Best Practice 1

Develop a compliance program, even if you can’t staff the role. In smaller DMEs, leaders wear many hats – one of them should be compliance. If you’re a larger DME, it could be someone’s full-time job. A good starting point for what to include in your program is this list of seven essential requirements of an effective compliance program from the Department of Health and Human Services Office of the Inspector General.

Problem 2

When a DME provider is audited for a specific product (an oxygen concentrator, for example), Medicare will hold payment until the company can show 10 examples of the product being audited. The longer it takes to find those examples, the longer it takes to get paid.

Best Practice 2

Digitize your documents in a system that has indexing capabilities (not just online storage). With data categorization, you can immediately locate examples to speed up payment.

Problem 3

Recovery Audit Contractor (RAC) and Target, Probe & Educate (TPE) audits are two types of CMS audits that require a response within 45 days. If you fail to respond within that period, Medicare won’t pay the claim – even if it was accurate and valid.

Best Practice 3

Invest in a system that automates the receipt of paper mail and email, making it easy to upload each type, store it, sort it, and index it (known as paper EOB conversion). The faster you know you’ve been notified, the faster you can respond.

Article by John Koch, COO and co-founder of MediStreams.

To learn more about how you can accelerate payments and reduce audit risks, visit MediStreams today.


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