Staying Prepared: Planning for Medicare and Commercial Payer Audits

Patricia Krueger, RPh
Practice Administrator, Oncology & Hematology Specialists, PA
Denville, NJ

An Interview with Patricia Krueger, RPh, Practice Administrator, Oncology & Hematology Specialists, Denville, NJ

Payer audits have become an inevitable fact of life for today’s oncology practices. Until a few years ago, the majority of audits were conducted by government agencies, such as Medicare, Medicaid, or their contractors. In recent years, however, encouraged by federal and state agencies’ successful payment recoupment efforts, national and regional commercial payers have increased their audits of medical practices and hospitals. To better understand Medicare and commercial payer audits, Innovations in Oncology ManagementTM spoke with Patricia Krueger, RPh, a community-based practice administrator based in Denville, NJ. Ms Krueger discussed her oncology practice’s experience with government and private auditors and provided practical advice on preparing for and successfully navigating the payer audit process.

Q: What is your practice’s approach to payer audits?

Patricia Krueger (PK): In our practice, all audit notifications must come to my desk first to make sure that we understand the nature and the purpose of the audit, as well as to identify the auditing body.

There are many different types of audits, including Medicare audits, commercial payer audits, pharmacy audits, and medical audits. Some audits are systematic, and others are specific to certain claims. Many of the audits are conducted by third parties; therefore, it is important to know who the contractor represents.

Q: What are auditors typically looking for?

PK: Patient-specific claims audits typically scrutinize medical necessity documentation. The larger, systematic audits look for documentation that relates to coding, especially for evaluation and management (E/M) codes and current procedural terminology codes.

In one of our Medicare audits, the contractor who was conducting the audit asked to see the schedule of each of the doctors. We have an electronic medical record (EMR) system, and were required to provide the electronic schedule. For every physician extender, the auditors wanted to confirm that the doctor who signed off on the prescription was physically in the office seeing the patients. That was a critical part of the audit, because we have several physician assistants working under the physician’s license; the doctors had to verify that they were present and sign off on them electronically. We had to attach the doctor’s schedule to each audit code.

Q: Have you had any particularly challenging audits?

PK: We had one audit where the auditor required all the nursing notes for certain patients receiving intravenous chemotherapy. That was a very cumbersome audit, because we had to document all the start and stop times of intravenous chemotherapy. The auditors wanted to make sure that we were billing appropriately for chemotherapy administration times. Pulling together the documentation was challenging.

Q: Have you retained legal counsel because of an audit?

PK: No, we have not. We are an independent practice, and legal representation is very expensive. However, we have used an experienced consultant to provide advice regarding audit processes and procedures; she has been very helpful to our practice.

Q: Has there been any upside to the audits?

PK: As a matter of fact, a few of the outside contractors commented that, in some cases, our E/M coding was overly conservative, and we could have upcoded and still have been compliant. That feedback was very helpful to me from a business perspective, because we learned that we might be “leaving money on the table” in some circumstances.

Q: How would you describe the commercial audits?

PK: There are 2 types of commercial audits. Random claims-specific audits are conducted to ensure that the proper medical necessity documentation has been provided for a service or a procedure. We customarily bill the next day after a patient is seen and receive an explanation of benefits (EOB) notification approximately 10 to 14 days after the date of service. Occasionally, we will see that the payer has determined a zero payment in the EOB, even if the patient is an active member who is eligible for benefits. When we receive these EOBs, we do not wait for a letter asking for medical documentation. Instead, we proactively call the payer and ask for the reason for the zero payment. By being proactive, we can provide the documentation quickly and avoid lengthy payment delays. After they receive the requested documentation, the payers usually pay fairly quickly.

We also get retrospective audits (ie, postpayment audits) from some of our payers, and the look-back period can be up to 18 months. Because of the high volume of audits, we have instituted a policy that allows 1 auditor monthly. Sometimes audits are delayed by 6 months to a year, but we feel it is necessary to minimize disruption and the uncompensated use of office time and resources. So far, our local payers have abided by this policy.

Q: How do commercial payers notify you about these postpayment audits?

PK: We receive notification letters. Because we receive a copious amount of mail from our payers, it is important to carefully review all correspondence received from payers in order to avoid missing an audit request.

Q: In a systematic audit, how many medical records do your commercial payers usually request?

PK: Our commercial payers typically request approximately 20 to 25 patient records, sometimes more. In the past, when we had paper medical records, it was a problem because we had to retrieve the records from storage. It is easier with an EMR system, but the records still need to be printed and collated.

Q: As the practice administrator, what steps do you take in response to an audit notification?

PK: We assign responsibility to a single point person––one of the managers in the office. The point person is responsible for direct contact with the auditor; he sits next to the auditor while he or she is in the office. He is experienced in commercial audits, knows the rules, and understands what the auditors are looking for from the practice. The auditors are not allowed to roam around the office or navigate our EMR system. In case any issues arise, we try to schedule the onsite visit on a day when I am in the office as well.

Q: Have you seen an increase in commercial payer audits in the past year or 2?

PK: The commercial audits have been steady, but we have not experienced a noticeable increase in the past year or so.

Q: How are Medicare audits different from commercial audits?

PK: Approximately 55% of our patient population has Medicare coverage, so we take these audits very seriously. It is important to understand and to follow Medicare guidelines; the guidelines can be complicated, and they often change. The medical necessity criteria are different for each drug or procedure. With the increase in personalized medicine, many drugs have diagnostic requirements now, too.

Commercial payers often use Medicare guidelines as a template for their auditing efforts, but Medicare guidelines are usually more restrictive than commercial payer guidelines. Therefore, we make sure that we include the documentation required by Medicare in our EMR system. By following Medicare requirements for all of our patients, we rarely experience an issue with our commercial payers.

Q: What does your practice do to remain in a state of readiness for audits?

PK: We are proactive––our practice is compliant and we follow the guidelines. Having a solid EMR system makes all the difference in the world, because it self-directs the way that we document an office visit. Various templates are available for all the information that we need to document in the EMR, including patient’s medical history, physical examinations, E/M codes, previous diagnostic testing, and patient care plans. The templates are helpful because all we need to do is to make sure that everything is documented. The template for E/M services has been especially important in ensuring that we are prepared for audits.

In addition to the EMR system, we make sure that all the nurses and physician assistants are fully trained and up to date. Training is an ongoing process, because requirements change, and we need to make sure that the clinical staff are staying compliant.

Q: Before we close, are there any other insights you would like to share with your peers?

PK: To recap, the onus is on the provider to know the rules and the regulations for proper coding and billing, as well as for the meaningful use of an EMR system. Ignorance of the rules is not an acceptable excuse for noncompliant coding or billing when an audit takes place.

Physicians and the clinical staff are clinically focused; therefore, it is the responsibility of the practice administrator and the sup- port staff to take the lead in ensuring that everyone understands the Medicare guidelines, based on current requirements for meaningful use and documentation. You must also be cognizant that the requirements, especially from Medicare, are not static; they constantly change.

It is a substantial burden to dedicate busy staff members to audits, but there is no other option. However, if you follow the guidelines, keep your staff trained, and maintain a state of readi- ness, you should feel confident and comfortable in responding to any type of audit.

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