Medicare Audit Issues Exploding

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By Matt Gracey

No matter the election results, one of the political “no-brainers” of 2012 and on seems to be the continued push of the government to combat Medicare fraud.  After some 30 years of crunching a wealth of internal data, The Centers for Medicare & Medicaid Services (CMS) has extensively analyzed outcome numbers and has come up with new strategies that sometimes look very onerous to the medical community.  The reality is that CMS and Congress have strategically aligned and have effectively funded an even-more-aggressive effort to decrease Medicare fraud and push their agenda of reducing costs by focusing on evidence-based medicine.

On the statewide front, with a big push for pre-payment claims audits started by First Coast Service Options (FCSO) in January of 2012, we are starting to hear many practices expressing concern over these audits and subsequent possible recoupment letters.  The fines and penalties, in addition to the time and trouble of the audits and, of course, the stress of the whole process, have many practices checking their insurance coverages for help.  In fact, a few malpractice-insurance companies’ standard policies include coverage for the expense of these audits in their regular policies, so check with your carrier or agent to see if you are already covered.  Some insurers include optional higher limits of coverage too, most of which is very inexpensive and highly recommended in this environment of increasing audit activity.

Additionally, we have found one insurer that offers coverage even for the fines and penalties, which can become quite steep.  The coverage for the fines and penalties is withdrawn if criminal activity is found, like in most insurance policies.  The even-better news is that the stand-alone coverage for such is very inexpensive, although as these audits become even more frequent we expect the coverage costs to increase as the risks increase.  From January 1, 2012 to July 1, 2012 FCSO had already performed 2,278 audits, which is a big jump from 2011. The reason is that the claims-error rate in Florida in 2010 was 12.3% for Part A and 16.4% for Part B and the target rate is 5.4%, so the Comprehensive Error Rate Testing (CERT) auditors are working overtime.  We highly recommend reviewing your insurance coverages now for these audits and contacting us if we can help.