Medical Insurance Audits
Receiving a request from an insurance carrier can be stressful and cause you to fear a possible insurance audit. Physicians often ask if there is a way for them to simply avoid being audited by the insurance carriers. Unfortunately, this is not generally possible. The simple answer is no.
The cause for an audit varies greatly. Some physicians become targets for an audit because they are performing certain procedures or are billing certain CPT codes at a higher rate than the average amongst their peers. These physicians are considered the outliers. In other situations insurance carriers will randomly, or through various internal reasons, decide to perform audits for certain CPT codes. In these situations, the reason for the audit has nothing to do with the physician or the physician’s practice. These audits may occur simply because the insurance carrier notices a spike in a certain CPT code. Due to the nature of medical billing, it is difficult for a physician to discern what CPT codes his colleagues in the field are billing. Physicians may be frequenting the same CPT code unknowingly, thus causing the insurance carrier to prompt an audit. This may occur through no fault or reason against the individual physician.
It is unlikely for a physician to avoid an insurance audit altogether. However, one of the best offensive strategies a physician may undertake is to periodically have their billing and record keeping practices reviewed by a certified professional coder. A certified professional coder will be able to ensure billing accuracy, and to make sure that there is proper record keeping. This defensive strategy is not particular expensive, and worth the cost in the long run. It is a useful offensive tool for physicians to protect themselves in the event of an audit.
Providers may fear that a request from an insurance carrier for patient charts will result in the insurance carrier performing a post payment audit. To this, it is important to note that there are several different possible types of audits that an insurance carrier performs.
Insurance carriers and Medicaid and Medicare administrators are required under federal statues to perform routine data mining audits. To this, many providers receive post payment audits. It is difficult to ascertain from the records request what sort of audit the insurance carrier wishes to undertake. It is possible that for post payment audits to be performed even when the letter may imply that the audit request is for routine quality control and/or data mining. A letter of this sort may be worded in a way, in order to avoid too close an inspection of the letter by the physician. Regardless of the sort of request, it does not change a physician’s obligation to respond to the insurance carrier’s request. However, it is important for the physician to ascertain the reason for the request, as this may affect how the physician may approach the possible audit process.
What should you do if you receive a request to produce records to an insurance carrier
If you receive a request for production of documents, the question is whether you should comply. Many physicians may want to simply ignore the request, and choose not to comply. That may not be always the best solution. A physician may be under certain professional responsibilities upon receiving the insurance carrier’s request. For example, there are times when an insurance carrier’s request for a patient’s medical records may conflict with the physician’s duty of doctor-patient confidentiality. That could present a dilemma to physicians who treat individuals with delicate health issues, such as viral STDs, mental health issues, or drug issues to turn over patient files to an insurance carrier. Due to issues such as the ones mentioned, it is important that physicians do not respond to insurance carrier requests without thought and consultation.
Physicians should consult the insurance carrier participation agreement in order to figure out whether, and how the physician should comply with the insurance carrier’s request. Some of the more recent agreements may contain clauses that appear as blanket authorization to the carrier to request and obtain records from the physician that are members of the carrier’s program. A closer look at these clauses show that these agreements may not make such demands on the physician that it becomes unduly burdensome to the physician. There are situations where physicians may not turn over patient’s records without direct authorization from the patient. This occurs for non-participating physicians. To turn over a patient’s records without the patient’s direct authorization would be a violation of the patient’s right to privacy.
Another issue that may be relevant is the likelihood of criminal or civil charges filed against the physician as the result of the audit. Although this is not a very common scenario, it may occur, and the physician should be wary about disclosing any information that could be used against him or her in litigation.
Therefore, it is vital for physicians to consult an experienced attorney to help navigate the waters between complying with an insurance carrier’s request and maintaining a patient’s right to privacy.
Demand for fee refund
Physicians may also receive a demand to refund fees for medical services rendered from the insurance carrier. The best defense approach in these matters varies depending on the practice and the nature of the audit/request from the insurance carrier. Firstly, the physician should try to decipher the reason for the refund demand from the insurance carrier. Secondly, the physicians should compile their own records to determine whether the correct amount has been demanded. The aforementioned two steps with help the physician attack the refund demand from the insurance provider.
Sometimes, an insurance carrier will extrapolate the results of their audit through a universe of patients. An insurance carrier may request to review a sample of patient records and extrapolate their findings over a six-years period. Insurance carriers balk at the six-years period, because the law states a two-years period.
Under Insurance Law §3224(b)(2), an insurance carrier is limited to seek repayment for a claim for a period of two-years after the payment has been made. This is permissible unless the physician has engaged in fraud or abusive billing practices. The 2010 amendment has provided some guidance on what is considered abusive billing. According to the 2010 amendment abusive billing is defined as: “a billing practice which results in the submission of claims that are not consistent with sound fiscal business or medical practices, at such frequency to reflect a consistent course of conduct.” This definition leaves a lot of room for debate. The terms used are broad and open for interpretation. Most insurance carriers form a very broad definition of what constitutes abusive billing practices. Furthermore, New York case law dictates that extrapolation is permissible, as long as it is based upon a statistically specified sample for the extrapolation.
If you or your practice are subject to an insurance company document request, audit, or demand for fee refunds, contact experienced New York insurance attorneys at Norman Spencer Law Group PC. We have successfully represented numerous clients in all sorts of private insurance matters as well as Medicaid and Medicare audits. Call us today to set up your consultation.