Media Center

News Publications Articles Videos
The Reprieve for Healthcare Providers Is Over: CMS to Resume Medicare Audits
July 22, 2020
Parsons Behle & Latimer Healthcare Update

 

Though dealing with the COVID-19 pandemic has been anything but a picnic for healthcare providers, one small ray of light was the fact that most Medicare audits were put on hold during that time. Now, however, the reprieve from Medicare audits is ending, even though the pandemic is not. Medicare has recently announced that beginning Aug. 3, 2020, it will resume audits by Medicare Administrative Contractors (MACs), Supplemental Medicare Recovery Contractors (SMRCs) and Recovery Audit Contractors (RACs). Audits by these contractors had been suspended as of March 30, 2020, because of the pandemic. The CMS announcement specifically states that Medicare audits will now resume “regardless of the status of the public health emergency.”

CMS conducts its medical review (i.e., audit) functions through various general and specialized contractors. MACs conduct audits of healthcare providers on both a post-payment and pre-payment review basis as part of their activities as the frontline gatekeepers for the Medicare program. By contrast, SMRCs conduct audits only as specifically assigned by CMS on specialized projects. For example, one ongoing project by the SMRC Noridian, which was suspended because of the pandemic, was Noridian’s audit of healthcare providers who prescribe diabetic shoes. Despite the fact that CMS had directed Noridian to suspend those audits and “release” payment for audited claims, Noridian has suggested that it will simply resume those audits and direct the assessment of overpayments rather than follow the specific language to “release payment” on the audited claims. Discussions with Noridian are ongoing regarding this issue.

Finally, audits conducted by RACs usually involve a relatively small number of claims and small dollar amounts. These audits are typically “desk audits,” which do not involve actual review of medical records, but rather are based on the reimbursement claim form. Of the three types of contractors discussed above, RAC auditors are unique in being paid on a “commission” basis, and their reviews are often highly subjective and arbitrary.

The most serious and extensive audits of healthcare providers are conducted by yet another category of contractors – Zone Program Integrity Contractors (ZPICs), and the newest player, Uniform Program Integrity Contractors (UPICs). These audits, which often involve hundreds of services and large extrapolated overpayments, were not officially suspended by CMS because of the pandemic and were allowed to continue going forward. In our experience, however, very few of these audits have been taking place during the pandemic. These audits are expected to also ramp up in the coming months.

If healthcare providers receive notice of an audit either through the mail or by an in-person visit, they should be aware of certain important matters. First, if providers are unable to provide medical records in the required time frame because of the pandemic, they should inform the Medicare contractor and ask for an extension of time. The CMS announcement specifically states that consideration will be given in these circumstances. Records will ultimately have to be provided, but the deadline may be extended. Second, certain types of Medicare services, particularly Durable Medical Equipment (DME), have the specific requirement of a signature on a “proof of delivery” form when the DME is delivered to the patient. The CMS announcement states that “[g]iven the nature of the pandemic and the inability to collect signatures during this time, CMS will not be enforcing the signature requirement.” Healthcare providers, however, are expected to document in the medical record the appropriate date of delivery and the fact that a signature could not be obtained because of COVID-19.

In summary, the several-month reprieve from Medicare audits by CMS contractors will shortly be ending, and providers can expect to see audit activity increase. If providers have allowed lax practices to creep into their medical record documentation and billing practices, the situation should be quickly remedied to avoid audit liability.

To discuss this or other healthcare-related matters, contact Kevin West by calling (208) 562.4908 or send an email to kwest@parsonsbehle.com

Attorneys

Practice Areas