By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law
Guests dropping by unannounced can be a stressful experience for any surprised host. Many would agree that the worst unannounced visitor of all, is the insurance plan auditor. This unannounced “guest” is looking to scrutinize your office policies, patient records, and billing files to uncover evidence of practices worthy of disciplinary action or large monetary recoveries.
Optometrists and ophthalmologists have very different audit experiences in comparison to other types of health care professionals. Third party payers, typically Vision Service Plan (VSP), perform the audits of vision care practices. Third party payers have recently increased the frequency of such audits.
Although in this blog we are speaking in reference to one particular plan, Vision Service Plan, these comments apply to all health insurers and plans and not just the one. Below is what you need to know to prepare yourself and your practice.
Two Different Types of Audits.
Like most health care audits, the objective of audits is to identify lapses in compliance with industry rules and regulations in areas such as billing, filing, and general business practices. Unlike for some governmental payors, vision plans will commonly perform routine audits to ensure quality control as well as compliance with billing procedures and documentation requirements. Eventually the auditing company will review each doctor about once every five years, as suggested by the National Committee for Quality Assurance Standards. Rules change frequently without warning, so it’s critical to stay up to date on the latest compliance rules and regulations, as well as any changes or amendments to your contracts.
Audits can take place in two very distinct formats. The most common audit is the routine quality control audit. A practitioner will be asked to submit a small number of randomly selected patient records. These records will be reviewed by the Quality Control Unit (or similar division) that will issue a report of the audit results. If issues are noted in the audit, the results may require the health provider to propose and submit a corrective action plan (CAP) identifying the necessary corrections required to address issues noted in the audit. These audits can be expected from time to time for just about all practicing optometrists and ophthalmologists.
The second type of audit is typically ordered when major patterns of inconsistency or billing irregularities are noted in an initial quality control audit. A “targeted audit” may be performed by the plan’s “special investigations unit/SIU” or similar unit, and is almost always unannounced. The SIU investigator will usually show up at an office and request on the average 30 to 50 records. These records are not randomly selected, but rather, are related to one or more areas of interest or irregularity. These audits are conducted to obtain evidence of suspected violations when it is already believed that rules are being broken.
How to Avoid Negative Audit Results.
A targeted audit can be triggered by a multitude of red flags. Disgruntled present or former employees who make a complaint, patients who make a complaint, or even a complaint made by a competitor can lead to a surprise in-office visit from an investigator. In addition, many questionable billing patterns noted by an auditor during a routine quality control audit can initiate further investigation.
Billing for services and products at a rate higher than surrounding area doctors, or at a rate higher than you traditionally have charged, are both red flags. Billing for a comprehensive eye exam and a routine exam on or near the same date will also stick out as potential fraud. Billing for more expensive products than you have in inventory may also cause you problems.
Auditors, in both a quality control audit and targeted audit, focus their scrutiny on the history, examinations, and medical decision-making parts of a patient record. For a doctor, it is beneficial to clearly and completely record the reason for a patient’s visit, their symptoms, and past health history.
Verify that you have recorded any and all tests and exams that were performed during the appointment. Auditors will argue that if you didn’t write it down, it didn’t happen. From our experience, the most poorly documented section of a patient’s record is the medical decision at the conclusion of an exam. It is very crucial to provide detailed statements in addition to a final diagnosis at the time of the patients visit. This will show the auditor you gave sufficient consideration during the exam to conclude a diagnosis. The more documentation you have the better and the more defensible those records are in an audit. The number one reason an audit may have a negative outcome is due to missing or insufficient documentation.
The Auditor is Knocking at the Door. Now What?
During an audit, the single most important action you can take is to agreeably provide the auditor with all complete records related to their requests. The less you argue and defend yourself, the better. A common mistake doctors make during an audit is not providing copies of all relevant information and keeping an exact copy for themselves. Relevant information includes any and all information you have on a patient related to the services and materials provided. Do not make assumptions when it comes to what information the auditor needs. Give the auditor copies of everything.
If you cannot locate necessary files required for the investigation, ask the auditor for a time extension and put this permission in writing. Do your best to locate these missing files. Patient charts you cannot find during an unannounced audit will be considered over billed. Also, ask the auditor for a copy of the list of patient records that were audited. Keeping track of what you provided the auditor is also important in legally protecting yourself.
The Aftermath of an Audit: What to Expect.
The results of your audit will be mailed to you in a letter. The letter may state that you passsed the audit with flying colors and do not owe the plan anything. The letter may ask for a refund of amounts determined to have been overpaid. The letter may give notice that the plan is terminating your provider agreement. The letter may state both of the immediately foregoing, requesting repayment and terminating your contract.
In any event, we strongly recommend that you review any such audit results immediately with an experienced health care lawyer.
You may be offered the option of a consent decree or a corrective action plan (CAP). The CAP was discussed above and is also rather self-explanatory. In a consent decree, you may be given a probationary time period in which the plan may decide to terminate you or not. In this time frame, you are also eligible for additional audits billable to you.
The letter will also explain the process of appealing the audit’s findings under the section called “Fair Hearing Plan” or “Hearing Rights.” You will only have a short period of time to file an appeal should you so desire, usually 30 days or less. During this process, if the audit letter demands a repayment, the plan will usually immediately start withholding these from any funds the plan owes you.
An appeal will be conducted through an internal peer review hearing before a panel appointed by the plan. Often this will be called the “Quality Control Panel” or the “Ad Hoc Committee” or some similar name. Records of the audit will be reviewed once again and you will have the opportunity to provide evidence and your own records in support of your defense. The board, consisting of three individuals selected by the plan, has the authority to overrule the initial ruling. They may revise the restitution owed, repeal the termination, or initiate another form of disciplinary punishment. It is extremely difficult to convince this panel for an appeal. Should you lose an appeal, you still may seek arbitration or legal action in court.
Click here to read one of my prior blogs on the audit process and its repercussions.
Don’t Wait Until It’s Too Late.
Ideally, it is best to have an attorney familiar with you and your business available before any audit is initiated. An experienced health law attorney armed with knowledge of industry laws can be critical in successfully surviving the audit process. If the action taken against you is considered to be adverse “peer review action” taken by a health care plan, it may be reported to the National Practitioner Data Bank (NPDB). If so, this remains on your professional file for life (actually only 50 years). You may also be reported to your state the board of optometry or licensing agency, which can lead to disciplinary action against your license. Securing a health law attorney who is familiar with the process is invaluable when considering the potential harm a negative insurance plan audit can cause.
Contact Health Law Attorneys Experienced in Handling Payer Audits, Investigations and other Legal Proceedings.
The Health Law Firm’s attorneys routinely represent ophthalmologists, optometrists or other health professionals in payer investigations, audits and recovery actions. We also represent optometrists, ophthalmologists and other health providers in investigations, regulatory matters, licensing issues, litigation, inspections and audits involving the DEA, Department of Health (DOH) and other law enforcement agencies.
To contact The Health Law Firm please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.
About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.
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“The Health Law Firm” is a registered fictitious business name of George F. Indest III, P.A. – The Health Law Firm, a Florida professional service corporation, since 1999.
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