The art of defending against contractor audits

To punch holes in Medicare audits, you need to know the rules.

I’d like to write today about the sheer absurdity of how these Recovery Audit Contractor (RAC), Area Program Integrity Contractor (ZPIC), Medicare Administrative Contractor (MAC) and other types audits are held against health care providers. When an auditor requests documents from a vendor and finds that the vendor owes a million dollars in alleged underpayments, I would expect the auditor to appear before an independent tribunal to defend their findings. However, for so many of these calls from health insurance providers, the auditor does not.

In my opinion, if the entity claiming you owe the government money does not show up for the hearing, the supplier should automatically prevail. A basic legal concept is that the accused must be able to confront his accuser.

I’ve had depositions for the past two weeks in a case involving an opioid treatment program. The two main accusers were Optum and ID Medicaid. During Optum’s impeachment, they testified that Optum failed to audit the facility. When ID Medicaid was filed, it argued that Optum had performed the audit at issue.

When no one can vouch for the veracity of an audit, it is ridiculous to force the supplier to reimburse anything. Listeners cannot hide behind smoke and mirrors. Auditors must attest to the veracity of their audits.

To punch holes in Medicare audits, you need to know the rules. You wouldn’t play chess without knowing the rules. Various auditors have disparate review periods, i.e. the period during which the auditor is allowed to go back and investigate a claim. For example, RACs may only look back three years, while ZPICs have no specific look-back period (although I would say the older the claim the less likely it is to recover).

When appealing the result of a MAC or RAC audit, suppliers need to have a specific reason for challenging the auditors’ decisions. Simply being dissatisfied or having generalized complaints about the process is not enough. Here are some examples of potential grounds for challenging a MAC or RAC decision on appeal:

  • Enforcement, if unenforceable Medicare billing rules were used;
  • Misinterpretation of applicable Medicare billing rules;
  • Use of unreliable audit methodologies;
  • Failure to seek expert advice;
  • Disregard relevant information disclosed by the supplier; and
  • Exceeding the scope of authority of the MAC or RAC.

It’s imperative that you arm yourself to defend a Medicare audit, but if the auditor fails to show up at any stage of the litigation, you must call foul and win on a technicality.

Note on programming: Listen to Knicole Emanuel’s live RAC report every Monday on Monitor Monday, 10 Eastern.

About John Tuttle

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