AE July/August 2018 Vol 27 No 4 - 22

RUNNING THE PRACTICE // REIMBURSEMENT
XXXXXXX

CONDUCTING A
RETROSPECTIVE AUDIT
Mary Pat Johnson, COMT, CPC, COE, CPMA

P

ayer scrutiny of provider
claims for reimbursement
is a growing concern for
physician practices. Investigations for inaccurate and
inappropriate claim filing
have increased.
In 2014, CMS piloted a new
review strategy, Targeted Probe and
Educate (TPE), which combines
claims review with education to
help reduce error rates in claims
submissions. The program expanded in 2017 to all Medicare Administrative Contractors and will likely
grow in 2018. In TPE, there are
three possible rounds or "probe"
audits. After each round, providers
are offered individualized education
based on their results. With each
round, improvement is expected.
CMS advises that providers
"with continued high error rates ...
may be referred ... for additional
action, which may include 100%
prepay review, extrapolation, referral
to a Recovery Auditor, or other action." 1 This is congruent with the
Compliance Program Guidance for
Individual and Small Group Physician Practices2 published by the
Office of Inspector General (OIG)
in 2002: If you find an issue, you
will correct it.
OIG guidance strongly recommends practices review their

22

AE // July/Aug 18

billing practices for accuracy and
compliance. Many plans, including
Medicare Advantage Plans, already
mandate compliance plans.
So, how do you begin?
CONSIDERING TYPES OF AUDITS
Audits may be conducted prospectively or retrospectively. A prospective review is conducted before
the claims are filed. This prevents
improper claims from being submitted since, if discrepancies are
noted, the claims can be corrected
before being filed. Retrospective
audits review claims after they
have been billed and paid. The
results of retrospective reviews may
require refunding overpayments
or correcting erroneous claims. In
either case, if a systemic problem
is identified, it must be addressed.
Remember, CMS regulations
concerning prompt refunding
of overpayments, known as the
60-day rule, put fairly restrictive
timelines for refunding identified
overpayments.
Audits can be performed by an
independent party (e.g., attorney,
consultant, or accountant) or by
your staff. Internal auditors may
include physicians, billing or
medical staff, compliance officer,
or a committee. Internal audits
should follow the same protocol

as external audits and achieve the
following objectives:
* Verify provider credentials
* Validate medical necessity of
the service
* Certify the claim accuracy (CPT,
ICD-10, modifiers)
* Assess the quality of documentation
* Confirm compliance with statutes and regulations
An audit can also assess the
efficiency (or inefficiency) of your
billing systems and protocols and
identify missed opportunities.
SELECTING AN AUDIT SAMPLE
The number of claims to be audited
varies. The OIG recommends a
random sample of five to ten charts
per physician, focused on federally funded programs. Start with a
comprehensive baseline audit; follow
with focused reviews. A comprehensive review assesses a wide variety
of services provided by the practice,
typically about 1% of all claims.
Alternately, audits with narrow
scope or limited objectives focus on
a specific physician, service, office
location, subspecialty, or payer.
The OIG utilizes random number generator software to select a
sample. This may not be practical
in a physician's practice so, to
obtain a random sample, you can
establish criteria, such as



Table of Contents for the Digital Edition of AE July/August 2018 Vol 27 No 4

AE July/August 2018 Vol 27 No 4 - Cover1
AE July/August 2018 Vol 27 No 4 - Cover2
AE July/August 2018 Vol 27 No 4 - 1
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AE July/August 2018 Vol 27 No 4 - Cover3
AE July/August 2018 Vol 27 No 4 - Cover4
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