It's 2024. Are you ready for your Medicare Claims Audit? The 7 Best Ways to be Prepared.

Medicare audits for physical therapy practices are commonly referred to as Medicare "Medical Reviews" or "Medicare Claims Reviews".  These audits are conducted to ensure that the services provided and billed to Medicare meet the necessary coverage and medical necessity requirements. There are several types of audits and reviews that can take place, including:

1. Comprehensive Error Rate Testing (CERT) Program:  This program measures the accuracy of Medicare fee-for-service payments.

2. Medicare Administrative Contractor (MAC) Reviews:  MACs conduct pre-payment and post-payment reviews to ensure compliance with Medicare requirements.

3. Targeted Probe and Educate TPE Audit:  Another name for a (TPE) audit is a "Probe and Educate" audit. This type of audit is designed to focus on specific providers or suppliers who have high claim error rates, with the goal of reducing improper payments through targeted education and feedback.
    
   • »»» Is a TPE audit considered a CERT or MAC audit?
    

   A Targeted Probe and Educate (TPE) audit is considered a type of Medicare Administrative Contractor (MAC) audit. It is conducted by MACs to review claims for accuracy and compliance, with a focus on educating providers to prevent future errors. The TPE audit process involves selecting providers based on data analysis, conducting a limited number of claim reviews, providing education and feedback, and then re-reviewing claims to ensure improvement.

4. Recovery Audit Contractor (RAC) Audits: RACs identify and correct improper payments made on claims for healthcare services.

5. Zone Program Integrity Contractor (ZPIC) Audits: ZPICs focus on detecting and preventing fraud, waste, and abuse in Medicare.

6. Supplemental Medical Review Contractor (SMRC) Audits: SMRCs perform medical reviews to lower improper payment rates.

These audits involve a detailed examination of medical records, billing documentation, and other pertinent information to verify the accuracy and appropriateness of the services billed to Medicare.

What types of penalties can be imposed if my practice has violations on a Medicare Audit?

Penalties for non-compliance discovered during Medicare audits can vary widely based on the nature and extent of the violations. Here are the general types of penalties and their ranges:

1. Overpayment Recoupment:

   • If the audit determines that Medicare overpaid for services, the provider must repay the overpaid amount. This can include interest accrued from the date of overpayment.

2. Civil Monetary Penalties (CMPs):

   • CMPs can be imposed for violations such as fraudulent billing or failing to comply with Medicare rules. Penalties can range from a few thousand dollars to tens of thousands of dollars per violation. For example, knowingly submitting false claims can result in penalties of up to $22,927 per false claim (adjusted annually for inflation).

3. Exclusion from Medicare:

   • Providers found guilty of severe violations, such as fraud, may be excluded from participating in Medicare and other federal healthcare programs. This exclusion can be temporary or permanent, depending on the severity of the misconduct.

4. Criminal Penalties:

   • In cases of intentional fraud, criminal charges can be brought against providers. Convictions can result in fines, restitution, and imprisonment. Criminal fines can be substantial, often reaching hundreds of thousands of dollars, and prison sentences can extend up to several years.

5. Recoupment and Suspension of Payments:

   • Medicare may withhold future payments to recoup overpayments or may suspend payments if there is credible evidence of fraud.

6. Corrective Action Plans (CAPs):

   • Providers may be required to submit and adhere to CAPs to correct identified issues. Failure to comply with CAPs can lead to further penalties.

The exact penalties depend on the specific findings of the audit and the provider’s history of compliance or non-compliance.

How Do I Prepare for a Medicare Audit/Review?

Preparing for a Medicare review involves several steps to ensure that your physical therapy practice is compliant with Medicare regulations and that your documentation and billing processes are accurate. Here are seven(7) key steps to prepare effectively:

1. Understand Medicare Requirements:

• Familiarize with Guidelines: Stay updated on Medicare policies, Local Coverage Determinations (LCDs), and National Coverage Determinations (NCDs) specific to physical therapy.
• Continuing Education: Regularly attend workshops, webinars, and training sessions related to Medicare compliance.

2. Maintain Accurate and Thorough Documentation:

• Comprehensive Records: Ensure that all patient records are complete, legible, and include detailed notes on diagnoses, treatment plans, progress notes, and outcomes.
• Justify Medical Necessity: Clearly document the medical necessity of treatments provided. Each service billed to Medicare should be justified with corresponding clinical notes.
• Treatment Plans: Include clear goals, measurable outcomes, and specific treatment modalities in patient treatment plans.

3. Conduct Regular Internal Audits:

• Self-Audits: Periodically review a sample of your own claims and documentation to ensure they meet Medicare standards.
• Peer Reviews: Have other clinicians review your documentation and billing practices to identify any areas needing improvement.

4. Implement Strong Billing Practices:

• Accurate Coding: Use correct and specific CPT and ICD-10 codes. Ensure that the codes accurately reflect the services provided and the patient's condition.
• Timely Billing: Submit claims promptly and ensure they are free of errors.
• Verify Eligibility: Regularly verify patients' Medicare eligibility and coverage.

5. Develop a Compliance Program:

• Compliance Officer: Appoint a compliance officer or team responsible for ensuring adherence to Medicare regulations.
• Policies and Procedures: Develop and implement written policies and procedures for compliance.
• Training: Regularly train staff on Medicare requirements, proper documentation, and billing practices.

6. Prepare for the Audit Process:

• Organize Records: Keep all patient records, billing documents, and communication with Medicare easily accessible and well-organized.
• Response Plan: Have a plan in place for responding to audit requests, including designated staff to handle communications and provide requested information promptly.
• Legal and Professional Advice: Consider consulting with healthcare compliance experts or legal professionals specializing in Medicare regulations.

7. Monitor and Respond to Updates:

• Stay Informed: Subscribe to Medicare newsletters, join professional associations, and monitor updates from CMS (Centers for Medicare & Medicaid Services).
• Adapt Practices: Adjust your documentation and billing practices as necessary to remain compliant with any changes in Medicare policies.

By following these steps, you can ensure that your practice is well-prepared for a Medicare review and minimize the risk of non-compliance and associated penalties.

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