The Entities That Audit You

Applicability:

O&P’s, DME’s, Physician Offices

The Issue:

Audits are a fact of life if you provide care to Medicare beneficiaries. But the different auditing entities perform very different functions that have profound implications. What are the differences between them and why is it important to know that information?

What You Need to Know:

There are 6 different types of Medicare auditing entities:

1. DME MACs: In addition to processing your Medicare claims, these contractors are also responsible for pre-payment and post-payment claim reviews. While they are not the only contractor who can initiate those types of audits, when they do, they focus on services with the highest improper payment rates.
2. CERT: Comprehensive Error Rate Testing is auditing to determine Medicare’s improper payment rate. An improper payment is any of the following: (a) a claim that was paid when it should have been denied; (b) a claim overpayment; and (c) a claim underpayment.
3. UPICs: Unified Program Integrity Contractors focus on the integrity of the Medicare program. They are responsible for identifying suspected fraud and referring cases to the OIG. They are not restricted in what types of claims they audit or the amounts involved.
4. RACs: Recovery Audit Contractors conduct only post-payment claim reviews to detect and correct past improper payments.
5. SMRCs: Supplemental Medical Review Contractors focus on activities to lower the improper payment rate.
6. OIG: The Office of Inspector General conducts investigations into fraud and abuse. They usually coordinate with the U.S. Attorney’s Office in criminal investigations.

What This Means for You:

The most important thing to understand is the difference between the entities responsible for investigating fraud and those engaged in more general auditing. You should be especially alarmed if you start getting audited by either UPICs or the OIG. You must treat any request from either of these entities seriously. The stakes involved with audits from them are high, since they are typically looking to establish criminal liability that could lead to suspension or expulsion from the Medicare program.

That does not mean, however, that you should treat audits from the other contractors as unimportant. If you have consistently poor audit results, you place yourself at risk of Medicare extrapolating your claim error rate retrospectively (e.g., if your claim error rate for knee orthoses is 35%, they could seek to recoup 35% of all knee orthosis payments extending back years from the audit date). Extrapolation is a powerful tool and can be financially ruinous.

So pay attention to who’s auditing you. Respond promptly. And most important of all, get your claims documentation right the first time so that you can defend audits successfully, leading these entities to turn their attention elsewhere.