As a health care provider, you’re probably aware of the efforts by the state and federal governments to identify and recover overpayments made by the Medicare and Medicaid programs. The Medicare Modernization Act of 2003 and subsequent legislation CMS dramatically expanded CMS’ authority to detect and recover overpayments made by the Medicare and Medicaid programs. CMS has engaged a number of contractors to audit health care providers to identify and recoup overpayments. Chances are high that your facility has been or will be subject to an audit by one of the many CMS or NC Division of Medical Assistance (DMA) contractors, and the best way to come out ahead is to be prepared now.

The audit contractors use sophisticated data mining techniques to identify providers for audit, and many use statistical processes to extrapolate an overpayment amount that is exponentially higher than the overpayment identified in the sample of claims the audit contractor actually reviews. Historically, billing issues like high claim rejection rates, higher utilization than neighboring providers and unusually long lengths of stay have been red flags for auditors looking for targets. Avoiding these types of issues can help decrease the chance that your facility will trigger an auditor’s interest, but complaints from beneficiaries and utilization screens might also trigger an audit.

No matter what type of audit and auditor you face – ZPIC, RAC, MIC or other – some common principles apply to preparing and responding.

What can you do to prepare now?

What do you do when you receive notice that you are being audited?

Depending on the type of audit, the provider will have an opportunity to appeal unfavorable results. But the best defense really is a good offense when it comes to appealing audit results, so it makes sense to expend time, energy and resources now to best position your facility to avoid overpayments and to defend itself in the event of an overpayment determination.

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