Audits

It doesn’t matter whether you are being audited for the first time or you’ve been the unlucky subject of multiple audits, an audit can be stressful and overwhelming.

An audit may reveal an accidental, yet significant, coding error. While you or your coder didn’t intend to incorrectly bill Medicare, and you truly believed that you had followed every step perfectly, somewhere along the line there was a mistake. Even though you had the best of intentions, that audit can be costly to your practice.

There are actually four types of audits

There are four different types of Medicare contractors that are responsible for auditing records, claims, and payments. While each type of contractor can use different methods to conduct the appeals, they all must be compliant with Medicare guidelines for medical review, denials, appeals, and payment recovery.

Medicare Administrative Contractors (MACs): MACs process and pay claims for Medicare Part A and Part B services, but they can also perform audits. They focus on prepayment audits, catching mistakes before you get the incorrect payment amount.

Zone Program Integrity Contractors (ZPICs): The primary role of a ZPIC is to investigate suspected fraud and abuse. They can provide support and information to law enforcement if the justice system should be involved. 

Comprehensive Error Rate Testing (CERT): CERTs monitor the claims adjudication outcome. They assess whether MACs are paying claims properly and identify areas that may be particularly vulnerable to payment errors. Because they’re not auditing the claim itself — just how MAC handles the claim — physicians don’t need to be alerted of these audits.

Recovery Audit Contractors (RACs): RACs detect and correct improper payments that have already been made. They also identify areas where there are often high error rates — that is, the places where the most dollars are at stake — and provide the Centers for Medicare & Medicaid Services (CMS) with tools for preventing future overpayments or underpayments. 

Additionally, RACs conduct medical necessity audits. They determine whether your clinical documentation supports the claim you submitted. 

While you may run into any of these groups or audits, the most common type of audit you’re going to face is a RAC audit.

You need to notify your MAC if you notice errors during a self-audit

You have decided to be proactive and do a self-audit and find that you submitted a claim with an error.

If this happens, you need to contact your local Medicare Administrative Contractor (MAC) right away to determine which information needs to be submitted to correct the error.

There are two types of self-audit corrections:

• Claims-based corrections are used for single claims. If required claim information is included along with the amount of the improper payment, the claim will be adjusted by the claim processing contractor. The MAC will be aware of the adjustment, but the refund doesn’t preclude future reviews. They can still come back and perform an audit.

• Extrapolation corrections use a sample of multiple claims. You estimate how much was paid in error for all similar claims in a specific period. A claim-processing contractor will either accept or deny the extrapolation. If accepted, those claims identified will be excluded from MAC review.

CMS expects you to submit a corrective payment refund discovered during a self-audit within at least 60 days.

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